Randstad Sourceright Leverages Recent Acquisition twago as FMS

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Randstad Sourceright, one of the largest, global providers of recruitment process outsourcing (RPO), managed service provider (MSP) and integrated (total) talent solutions, recently announced it will be supporting its clients with its own version of a freelancer management system (FMS). Sourceright will leverage the technology of twago, the pan-European online freelancer marketplace Randstad acquired last month for an undisclosed sum.  

While twago as a company will continue doing business as an online freelancer marketplace, the twago technology architecture and functionality will be leveraged to support Sourceright’s clients as an FMS in a white label form that expresses the client’s employer brand and allows the client to manage its own private freelancer talent pools. From Sourceright’s perspective, an effective freelancer management solution is not just a separate technology platform. It must also be integrated with VMS technology and workflows and MSP processes.  

This development comes on the heels of an announcement by Randstad Japan to leverage the technology of Gigwalk for a different kind of staffing solution that is being rolled out across Japan in coming month. (Randstad has an investment in Gigwalk.)

All of these recent developments clearly put Randstad out ahead of the pack of the largest staffing and workforce solutions businesses in terms leveraging online work intermediation platforms and integrating them into the existing staffing services and workforce solutions.

What’s It All About?

We had a chance to talk with Michel Stokvis, director of Randstad Sourceright's Center of Expertise, in order to get a more detailed understanding of this initiative.

Setting the context, Stokvis said that the use of freelancers (independent workers) — an increasingly important talent population — has been growing in all of the global regions served by Sourceright. He estimated that the average percentage of professionally skilled freelancers making up a businesses’ professional workforce falls within the 20%–30% range, with wide variance across different countries.

We discussed that businesses require some type of solution to support the sourcing and engagement of freelancers and that in the past few years there has been the emergence of FMS solutions. However, many FMS players have offered a comprehensive, stand-alone platform—something which Stokvis believes is not an effective FMS solution model because of the lack of integration with the established VMS solutions and other processes.

VMS solutions, on their own, tend not to support the real means of enabling freelancer management, having been historically focused on supplier management and sourcing of contingent workers through staffing suppliers, Stokvis suggested. However, the VMS is definitely an indispensable piece of the contingent workforce management puzzle. It is the established gateway into the enterprise and enables a range of critical business processes and workflows, such as handling of requisitions and playing a role invoice and payment processing, including integrations with enterprise financial systems. It also serves as the contingent workforce management system of record.

With VMS, there is already one indirect sourcing channel for contingent workers through staffing suppliers. Sourceright’s FMS will give clients an alternative, direct sourcing channel to freelancer talent that would not otherwise be engaged.

“When a req is released on the VMS, it will automatically be published on the FMS,” Stokvis said. “When a freelancer applies, the FMS will automatically feed the data back into the VMS, where the VMS treats the freelancer as an alternative candidate.”

Sourceright has already engaged two of the largest VMS players to establish integrations. In actual FMS implementations with large enterprise clients — one already in progress and over 10 queued up for the next few months — it will be Sourceright’s MSP that supports the attraction of talent to the FMS through a variety digital tools and processes.

According to Stokvis, benefits to clients from this integrated model “is definitely cost savings. But even more important is the leveraging of the client company’s unique employer brand to create a talent pool for creating a private talent pool of freelancers that can not only be used for one-off engagements, but also for future engagements.”

The FMS solution can also be complemented by Randstad’s and other providers’ contractor compliance services, and it is integrated with Sourceright’s TalentRadar total talent management analytics solution.

How We See It

This is another significant development — connected with online work intermediation platforms — that has come out of Randstad this year. It is indicative of what seems to be an emerging practice of staffing-related businesses (e.g., Adecco/Beeline) to incorporate and leverage platforms in their existing contingent workforce solution set. However, Randstad has made major leap this year, raising the bar for other players.

The Randstad FMS philosophy seems to be to not “start from scratch” but rather to assemble and integrate existing solution components (in fact, we have also been told that there are some components, like time tracking that already were in use at Sourceright and will be reused). Whether this reuse (and integration) strategy is the most efficient and effective strategy to realize a successful FMS solution that enterprises will adopt on a large scale remains to be seen. But it does seem promising.  

One advantage a company like Randstad possesses over standalone technology or marketplace-only FMS players is its already established client relationships with large enterprises. That seems like a significant competitive advantage that cannot be duplicated by other players, except through merger or tight partnership another similar, established staffing/workforce solution business.

Randstad has judged that the FMS sourcing channel will deliver cost savings over supply-base indirect sourcing processes. It will also give enterprise clients access to critical talent that might otherwise not be accessible. These are both highly credible claims and strong value propositions for enterprises — something that should get serious attention from contingent workforce and services procurement practitioners.

Spend Matters will definitely be monitoring, analyzing and reporting on this and other similar developments as they arise. For a big picture analysis of the ongoing digital evolution of the contingent workforce supply chain, see the five-part series that starts here: The Digital Evolution of the Contingent Workforce Supply Chain: What Does It Mean? (Part 1).

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