The Contingent Workforce and Services (CW/S) Insider’s Hot List: April 2018

Welcome to the third edition of “The Contingent Workforce and Services Insider’s Hot List,” a Spend Matters monthly feature available to Plus and PRO subscribers. In the depths of the evolving and expanding contingent workforce and services (CW/S) space, innovations and emerging practices may be brewing but escape observation. To shed some light, at the top of every month, we select, summarize and provide some brief commentary on noteworthy developments that have recently appeared on our radar.

In March we saw a warming trend, with a steady stream of steamy new developments. These ranged from those in the established core of the CW/S space to those on the bleeding edge. In this edition of the Hot List, we’ll cover the whole spectrum.

Hot Off the Presses

Wildfire? Or Slow Burn?

Over the past five years, various established, core CW/S technology and service solution providers have begun to respond to changes in the CW/S market and the proliferation of new technologies, in particular direct sourcing independent contract workers (e.g., freelancers), holistic workforce management, transformative digitization and new types of digital platform-based intermediaries and service providers.  The movement of core, established CW/S players — such as SAP Fieldglass, Beeline and MBO Partners — in launching new solutions and forming cooperative relationships with innovative digital providers seems to indicate that new developments and even paradigm shifts in the space are gaining steam.

SAP Fieldglass Digital Network

In early March, SAP Fieldglass announced its launch of what it is calling the Digital Network. According to SAP Fieldglass, the Digital Network provides a new way for client businesses to “find, hire and manage an array of workforce channels, such as freelancers, contingent workers, statement-of-work consultants and permanent employees.” As we stated in our coverage, the Digital Network will provide enterprises with an end-to-end, digitally integrated, multichannel sourcing and engagement process, including access to third-party digital platforms and other solutions.

SAP Fieldglass also identified 11 initial Digital Network partners: Catalant, freelance.de, Genesys Talent, MBO Partners, Shiftgig, TalentNet, TalonFMS, The Data Incubator, twago, WorkMarket and DocuSign, the latter represented in the form of SAP Signature Management. Additional partnerships are expected in the future.

For additional analysis, check out our recent article, SAP Fieldglass Introduces its Digital Network to Support Multichannel Services Sourcing and Engagement.

Randstad Sourceright

Another core, established CW/S player, Randstad Sourceright, also announced what it calls Talent Velocity, an innovative, internal talent acquisition, candidate engagement and client relationship/collaboration platform. According to Randstad, Talent Velocity brings together “AI, machine learning and predictive technologies into a single, integrated digital platform.”

Perhaps more interesting is how the solution came to be. The solution was designed and built within Randstad Sourceright’s Global Talent Innovation Center. But more important, many of the key components are solutions of companies that the Randstad Innovation Fund strategically invested in or acquired over the past several years. These include:

• Gr8 People: CRM and recruitment marketing platform
• Montage: on-demand video interviewing and scheduling software
• Wade & Wendy: AI chatbot for candidate interviews and engagement
• Twago: freelance management system (see February Hot List)
• Rolepoint: online employee referral
• Checkster: automated reference checking
• HackerRank: online talent community and assessment for programmers
• Pymetrics: gamified psychometric assessments
• Brazen: online recruiting and networking events
• Crunchr: workforce reporting and people analytics

Randstad will roll out Talent Velocity globally across most of Sourceright over the next few months.

There are number of ways to assign significance to this development. Perhaps most of all, Talent Velocity is not only a standout achievement for a core, established player in the CW/S space but even more the result of a carefully orchestrated strategic innovation effort of one of the largest global staffing solution businesses. In general, these businesses have not been known for their innovativeness and agility. While it’s said that you cannot teach an old dog new tricks, apparently that is not the case for Randstad — which, with Talent Velocity, appears to be hot dogging it.

To catch a glimpse of Talent Velocity in action, check Randstad Sourceright’s marketing video.

Randstad Innovation Fund: HackerRank

Speaking of Randstad, the Randstad Innovation Fund also invested recently in HackerRank, mentioned above in the context of Talent Velocity. Randstad participated in a $30 million Series C funding round led by JMI Equity, Khosla Ventures, Battery Ventures. and Chartline Capital Partners.

HackerRank, according to the investment announcement, is a “skills-based recruiting platform and online coding [crowdsourcing] challenge community” consisting of more than 3.4 million developers.  The company, founded in 2012, has the stated aspirational mission to “match every developer in the world to the right job by providing a technical recruiting platform that assesses developers based on actual coding skills.” A wide variety of companies (more than 1,000) use HackerRank for Work to find, evaluate and engage developers. According to the press release, “these customers include five of the top eight commercial banks, for example, as well as auto manufacturers, retailers and others.”

To be sure, Randstad is not the only company that has bought into HackerRank. Recruit Holdings, a Japan-based staffing and digital media giant, was also one of the early stage investors. In 2015, Recruit, the owner of Indeed, also invested $10 million in the online contest crowdsourcing platform 99designs, and more than $5 million in Gengo, an online translation marketplace. The company also made a bid in 2013 to acquire global online freelancer marketplace Freelancer.com, prior to its IPO.

In Other News

WorkMarket, an ADP company, Partners with Mercer

In mid-March WorkMarket, an ADP company, announced a partnership with Mercer, a global human capital and employee benefits consulting firm owned by Marsh & McLennan Companies Inc. As we reported extensively (here, here and here), WorkMarket was acquired by ADP earlier this year. Not dissimilar to WorkMarket’s relationship with Accenture, this is effectively a channel partnership for WorkMarket. It also puts another arrow in the quiver of Mercer Digital, where it joins other Mercer technology partners like ServiceNow and Workday. The WorkMarket-Mercer relationship adds another chapter to the evolving story of the melding of young digital players like WorkMarket and established, core players like Mercer, ADP and Accenture.

Paro

Leaving behind the world of the CW/S core, we look at Paro, an online marketplace or service delivery platform. Paro, founded in 2015, announced a $5 million Series A round in early March. Paro’s specialization is financial professionals (e.g., freelance bookkeepers, accountants, financial analysts and finance executives) that can be engaged to meet the financial management needs of small and medium-sized businesses (SMBs). Essentially, that means flexibility and reasonable cost. Paro also claims to accept only “2% of freelancers who apply into the network and our multi-step vetting process includes a skills assessment, interview and hands-on project.”

Paro offers business three main services:

1. Outsourced accounting and bookkeeping services
2. Outsourced financial analysis services
3. Outsourced part-time CFO services

Paro’s client engagement and delivery model starts with a free 30-minute consultation, after which Paro identifies appropriate freelancers or a team that can be used on a contingent basis. Billing is hourly.

Over the past several years, we have seen a growing number of specialized platforms emerge for content writing, translation, software development, data science and more.  Paro, as a financial management specialist targeting SMBs, has joined this crowd.

For more detail on Paro, check out its website.

Bugcrowd

Speaking of crowds, Bugcrowd recently announced a $26 million Series C funding round. This round brings Bugcrowd’s total funding to nearly $50 million since its launch in 2012.

Bugcrowd provides organizations with a crowdsourcing platform, “bug bounty” programs and a global community of tens of thousands of security researchers to identify critical software vulnerabilities. One of at least 15 crowd platform software testing providers operating today, Bugcrowd differentiates itself with its laser-sharp focus on cybersecurity (talk about hot). The company reports that an increasing number of large enterprises are engaging in bounty programs on the platform and that, after four years of continuous growth, the number of programs doubled year-over-year in 2017.

Bugcrowd is not an anomaly: crowdsourcing bounty/contest/challenge platforms — for software development, engineering, science, innovation, product development, marketing and more — are being widely used by large enterprises, and it appears adoption will continue to increase. The use of this type of crowdsourcing is becoming commonplace among larger enterprises. Check out Bugcrowd’s website — you may be in hot water and need it soon.

Here’s the Kicker

Blockchain: It’s back!

To conclude this month’s Hot List with a little sizzle, we return to blockchain. In the February Hot List, we discussed two blockchain-based human capital-related platforms: Chronobank and Jobeum. Now we have identified several more, three of which we summarize below.

Gems bills itself as the “decentralized Mechanical Turk” and describes itself as a protocol for contracting workers to perform microtasks. According to the Gems whitepaper, workers stake tokens in order to prove validity of their tasks and earn a reusable computed trust score, enhancing the cost efficiency of the network while democratizing access to scalable micro task workers. Gems had not yet launched its initial coin offering (ICO). To learn more about Gems, visit the website or read the whitepaper.

Crafty, started in Brazil, describes itself as “a decentralized and free platform with the mission to tokenize the self-employed industry and create a new and revolutionary ecosystem for the self-employed workers and their customers.” Crafty launched its minimally viable product (MVP) in April 2016 and is operating in 170 cities and towns with more than 30,000 registered users. Crafty’s ICO was launched in February 2018 and is currently at 37% of target. To learn more about Crafty, visit the website or read the whitepaper.

Coinlancer says it is “recreating the world of freelancing” with an Ethereum-based platform where freelancers and clients connect remotely through smart contracts. On Coinlancer, clients post job opportunities and workers respond, leading to a match. Payments for a job offer are made in CL token once the rules set in the smart contracts are met. Coinlancer conducted its ICO over November to December 2017 and reached about 25% of its target ($12 million of $50 million). To learn more about Coinlancer, visit the website or read the “whitepaper.”

It is still early days for blockchain startups in the CW/S solution space. The first ones started to appear only in 2017.  No doubt about it, they are bleeding edge and represent a paradigm shift. Whether they become viable models will become clearer in the next two years. At this point, it is necessary to try to understand these new models, trace the developments and see what heats up — something we at Spend Matters will be doing.

That brings the March installment of “The Contingent Workforce and Services Insider’s Hot List” to a close. We’ll be back with more in May. In the meantime, remember: when you’re hot you’re hot, when you’re not you’re not.