In a series last year, we set out to explore the digital evolution of the contingent workforce supply chain — a specific area of the services procurement world that, dare we say, has been getting hot.
We began tracing a line from the vendor management system (VMS)-dominated atmosphere starting over 15 years ago up to the more recent technology-enabled platforms such as Work Intermediation Platforms (WIPs).
Related: Join me and Jason Busch for a free webinar next week on 2017 Tech Trends and what they mean for contingent workforce practitioners.
But as we know, launching into heady discussions on the topic may be rough without laying down some simple definitions first. For that reason, we want to give services procurement practitioners a bit of a primer on three basic categories — marketplaces, service providers and private pools/networks — and examples of WIPs that fall into each (or more than one) of them.
Whoa, What’s a WIP Again? Here’s a Super Quick Review
First, let’s just quickly define WIPs. While well-known platforms such as Amazon, Uber and Airbnb have arisen in the retail, transportation and hospitality areas, tech-enabled platform businesses, functioning as new intermediaries between demand for and supply of work/services, have been proliferating. Spend Matters refers to these platforms as work intermediation platforms (WIPs).
These platforms have been able to engage workforce populations that have not been previously accessible (e.g., talent in other countries). They have created new efficient ways of executing work arrangements (direct sourcing to electronic payment); performance and fulfillment of work/services (e.g., online end-to-end); and new models of engaging workers (e.g., crowdsourcing).
After 10 years, WIPs are still at a very early stage of development. However, such a rate of maturation and acceptance is not atypical for technology-driven innovation. In our view, many WIPs around today will evolve to be successful, and new WIPs will emerge with successful formulas and models right out of the gate.
So, WIP Category #1: Examples of Marketplaces
The above platforms basically fit the marketplace model (and Upwork would also fall into Private Pools/Networks), but there are variations. So let's dig into them, shall we?
C-level executives, hiring managers, HR professionals, procurement directors and contingent workforce management practitioners at top-performing companies are recognizing that the way of engaging and leveraging talent is changing. They realize that ongoing high performance and competitive advantage require an entirely new approach to meeting their organization's needs for specialized, knowledge (i.e., business) talent — one that supersedes traditional work arrangements (e.g., “permanent” employment, stalwart consulting firms, staffing agencies) and organizational models.
In Part 1 of this three-part series, we address organizations’ changing requirements for how work is delivered, executed and managed in an increasingly digitized and networked business environment.
Officially launched this week, AllWork is a work platform that enables consumer brands to place brand/product freelancer specialists into assignments at stores of any number of different retail businesses. From our perspective, AllWork is a truly instructive example of how digital work platforms can and will enable completely new ways of arranging work.
Accenture recently joined McKinsey (“A Labor Market that Works: Connecting Talent with Opportunity,” 2015) and Deloitte (“Global Human Capital Trends 2016 — The new organization: Different by design”) with its own report that directly addresses online work platforms (which go by a number of names). The Accenture report, “Workforce Marketplace: Invent your own future,” is trend No. 3 of 5 in the company’s more comprehensive “2017 Vision Trends: Technology for People.”
President Donald Trump recently said, “Now, we’re going to have regulation, and it’ll be just as strong and just as good and just as protective of the people as the regulation we have right now. The problem with the regulation that we have right now is that you can’t do anything… I have people that tell me that they have more people working on regulations than they have doing product.”
So considering the evolving and heavily regulated labor market, how should we read these tea leaves?
When the idea and prototypes of what was called the Freelancer Management System (FMS) appeared at the end of 2013, it was met with much excitement and interest, which continued well through 2014 and 2015. Though propped up into 2016, FMS — after a long struggle with confusion, rebuttal and lack of adoption in the market — finally succumbed, quietly and without much notice. Scarcely a tear was shed, and barely a whisper was heard, not even from investors who poured millions of dollars into their progeny.
The emergence and expansion of the so-called gig-economy (the non-employee, project and task-based segment of the labor market) has opened up challenges for both businesses and workers.
Businesses previously vigilant about the classification and other compliance risks that come with self-employed, 1099s/independent contractors (ICs) are now faced with the dilemma of how to work with the growing population of much-needed talent that prefers self-employment and independence. And self-employed workers and micro-businesses are also facing the challenge of how to “make independence work” without the “support services” that employees never have to think about.
In December, Spend Matters covered SAP Fieldglass’ launch of its new product, SAP Fieldglass Flex. The new offering is effectively a VMS designed specifically for mid-sized organizations. Existing enterprise VMS solutions have tended to be too complex and costly for mid-sized businesses. And although some enterprise VMS solutions may have achieved some limited penetration in the mid-market, we believe none has been (1) designed from the ground-up specifically for this purpose, (2) benefited from best practices knowledge of a leading enterprise VMS and (3) had the support of one of the largest global software players. Given the above, we thought it was important to go a bit deeper into understanding Flex and were able to have a conversation with Rob Brimm, President of SAP Fieldglass, to gather more details about the product.
President-elect Trump has wasted no time intrepidly wading into numerous policy areas. One notable area of action has been federal spending, where his frequent pledges to cut costs from federal programs has made him seem more like the chief procurement officer of the United States (CPOTUS). Beyond federal spending, however, we as analysts of the contingent workforce and services procurement space have a far more specific question we’d like to address: How will Trump deal with the gig economy?
Will 2017 be the year when digital-platform-intermediated work is ushered into the enterprise by procurement? That is the question.
It has been nearly five years since I began my labor of love, i.e., research and analysis of technology-based platforms that intermediate work. These digital platforms allow business users to work with specific employees or purchase and consume services of a platform-based or more traditional service provider.
Up to this time, these platforms (of which there are now hundreds worldwide) have been off the radar of procurement practitioners, considered novelties or, at the most, piloted. In the meantime, increasing numbers of internal business users have been accessing these platforms without procurement visibility and control.
What? A work intermediation platform (WIP) based on blockchain, that now much talked-about distributed ledger system?
Chronobank.io is aiming at “making a fundamental difference in the way people find and are rewarded for their labor, decentralizing the process and moving it outside the framework of traditional financial institutions.” Chronobank.io is focused on short-term work in labor categories like “e-commerce, cleaning, warehousing, industrial, building and various forms of freelancing.”
TalentWave is a third-party independent workforce compliance and engagement service/solution provider. As a provider within the workforce supply chain, its core function is to ensure that organizations remain in legal compliance when engaging independent workers –– through Employment of Record (EOR)/Payrolling, Agent of Record (AOR) and other services. While these kinds of services/solutions are materially provided by a limited number of large staffing conglomerates (like Kelly and Randstad), TalentWave is one of a larger number of independent/non-captive providers in this evolving and increasingly important space.
This Spend Matters PRO vendor snapshot provides facts and expert analysis to help buying organizations make informed decisions about whether they need a solution like TalentWave as an alternative for or complement to their organizations’ incumbent solutions for organizing, managing and assigning work to their own “affiliated” workers. Part 1 of our analysis provides a company background and detailed solution overview, as well as a summary recommended fit suggestion for when organizations should consider TalentWave. The rest of this multi-part research brief covers product strengths and weaknesses, competitor and SWOT analysis, user selection guides, and insider evaluation and selection considerations.