The Contingent Workforce and Services Insider’s Hot List: July 2018

Welcome to the sixth edition of Spend Matters’ monthly feature, “The Contingent Workforce and Services Insider’s Hot List,” available to Plus and PRO subscribers.

As the mercury started to rise this summer, CW/S technology and innovation took a rest in the shade. Is this a seasonal fluctuation, or has the ongoing fire burned out? Most likely the former, but this month’s Hot List turned out more warm than fiery.

Still, despite the tepidness of June, there were several developments and events that bear mentioning.

The BLS Contingent Workforce Supplement: Fake News?

There was much excitement leading up to the June 7 release of the BLS Contingent Worker Supplement (CWS) to the Current Population Survey (CPS). Why? It was the first time the supplemental survey had been conducted since 2005, when Congress defunded it. Perhaps Congress can be excused (just this once) for a lack of foresight, in this case for not anticipating the gig economy. For those who had been anticipating seeing a significant increase in the numbers of contingent workforce from 2015 to 2017, the release of the supplement was disappointing (if not shocking).

According to the BLS press release, across three different measures, contingent workers accounted for 1.3% to 3.8% of total employment in May 2017, while in 2005 contingent workforce as percent of employment ranged from 1.8% to 4.1%. In other words, there was a decrease.

How can this be? Did we overhype or did our eyes deceive us? How do we account for all of those Uber drivers who were not around in 2005? And all the talk about freelancers and gig workers?

In all likelihood, the counterintuitive finding is likely due to the supplement’s survey methodology, a sticky wicket that we will not delve into now. Suffice it to say that the survey methodology was designed — many years before 2005 — to analyze a range of different questions about the portion of the U.S. workforce engaged in what the BLS defined as “contingent and alternative work arrangements,” and the survey methodology was not changed for the 2017 supplement. The only change was the addition of four new questions related specifically to gig work; the responses to those questions will not be released until later this summer.

For those concerned about being left in the dark on the subject, there is other data and research that paints a different picture of contingent workforce trends — each though its own lens. And most of these indicate that the contingent workforce has been growing. Ultimately it all depends upon how you define and measure it. If government statistics don’t provide us with clear answers, the recently launched Gig Economy Data Hub — a partnership between The Aspen Institute’s Future of Work Initiative and Cornell University’s ILR School — may help going forward. The partnership, which has hit the ground running, states that the “Data Hub provides summaries of available data sources on the independent workforce. For each source, find the definition of independent work, the methods used, key findings, shortcomings, and links to reports and raw data, where available.” To go direct to the source, visit the Hub’s research page.

Hired Is On Fire — Again

In late June, Hired, the innovative platform for sourcing talent, announced a $30 million Series D funding round. The company, founded in 2012, has raised nearly $133 million to date. With businesses finding it ever more challenging to source and engage critical talent, many young companies with promising talent solutions are catching the attention of investors and soaking up private equity. But Hired, from our vantage point, stands out in the crowd.

In our April 2017 brief Hired: A Next-Generation, Platform-Based Staffing Supplier? we noted that “Hired is a superlative example of what I would call a next-generation, platform-based staffing supplier, an important emerging category for HR and now contingent workforce practitioners to learn about.” We also explained Hired’s entirely unique talent sourcing and engagement model, which the company continues to report as highly successful.

According to a recent Venture Beat article, “Hired said that it has seen a 300 percent year-on-year “bookings” growth, and some big-name companies already using the platform include WeWork, Dropbox, Nordstrom, Zuora and Booking.com.” CEO Patel was also quoted saying, “To date, we’ve seen a total of $57.5 billion worth of salary offers extended through Hired. This growth is a testament to the foundation we’ve set in driving the $700 billion global recruiting industry forward, and we’re not slowing down.”

Beginning in 2016, Hired had a special focus on contingent workforce (versus permanent hires), including a partnership with Beeline announced in early 2017. Since that time, however, the specific focus on contingent/contract/freelance workforce seems to have dissipated (reminding us that a check-in with Hired is long overdue).

SAP Fieldglass and SAP Ariba Rub Sticks Together

In June, we woke up to a bit of surprise. SAP Fieldglass appeared alongside SAP Ariba in Gartner’s 2018 Magic Quadrant for Procure-to-Pay Suites, as shown here:

Source: Gartner’s report licensed by SAP

For the purposes of its analysis, Gartner appears to have begun including “contingent workforce tracking and/or statement of work (SOW) service procurement” as capabilities encompassed by a Procure-to-Pay Suite. In certain ways this makes sense: a so-called VMS is a kind of procure-to-pay solution (especially, if we consider the increasing importance of spend on services versus contingent workforce).

Over the past few years, we have analyzed how the “services gap” between e-procurement and VMS solutions would inevitably be closed (e.g., as in VMS and E-Procurement: Bridging the Indirect and Services Procurement Gap). Bringing CW/S sourcing and management under a e-procurement suite umbrella is certainly a very plausible scenario — one that will likely unfold (but perhaps not the only one).

In any case, other manifestations of this happening are hard to find. Coupa may be the only instance of an e-procurement suite provider that has begun to stake a claim in this direction with Services Maestro (see our coverage: Coupa Announces First General Availability Release of Services Maestro and Coupa’s GA Release of Services Maestro: What Is It and What Does It Mean Today?). Coupa has told Spend Matters that it is starting with SOW-services spend, and has contingent workforce (staffing and independent worker) spend under serious consideration down the line.

Interestingly, at this stage Coupa has put its first foot forward not through acquisition but by building Services Maestro as a native solution on top of its spend management platform. Though the company, we believe, is in some stage of partnership with at least two VMS providers. One of them is Beeline, the largest competitor of SAP Fieldglass. Whether the Coupa-Beeline relationship could go beyond the dating stage remains to be seen. At this point, we judge the probability to be on the low side, despite Beeline’s apparent availability. But once again, all in the fullness of time.

Reading through Gartner’s report, there is barely any discussion about Fieldglass capabilities; the focus is for all intents and purposes on Ariba. While we know Ariba and SuccessFactors integrations have been under development from not long after the Fieldglass acquisition in 2014, where not clear at this time on where that integration stands today. While the pairing of SAP Ariba and Fieldglass by Gartner doubt reflects the aspiration, we’ll need to learn more about the reality at this stage of the game.

Spend Matters’ New CW/S SolutionMaps Are Almost Baked

At the end of June, we completed the research and analysis phase of the first CW/S SolutionMaps, which will be published in early September. But first, you may ask, “What are SolutionMaps?” — a fair question.

In early 2017, Spend Matters began publishing its first SolutionMaps for a range of different procurement technology solutions (e.g., e-procurement, contract management, spend analysis). SolutionMap gets its name from Spend Matters’ elegant four-quadrant diagram that shows how providers in a given solution category are rated by analysts and customers and how they compare with one another. Here is an example of a SolutionMap for Procure-to-Pay (P2P) solutions.

But Spend Matters’ SolutionMaps are more than just a pretty face. Behind these maps is an extraordinary amount of detailed, RFI-based solution research, analyst judgment and client inputs, which differentiates SolutionMaps from other research firm’s solution research. (For more details on methodology, see here). Spend Matters also is only focused on procurement technologies, while other firms spread their attention across a range of different solution categories. Another differentiator is SolutionMaps “buyer persona” perspectives. For example, the map above reflects the perspective of the Configurator, one of the five currently available personas.

One last differentiator, SolutionMaps are not static — they are updated periodically, over the course of a year, for new solution providers and changes in solutions already mapped.

As noted above, we just completed our research and solution scoring process for the first three CW/S SolutionMaps, which focus on enterprise technology solutions used by procurement or that support procurement. Rather than use the currently evolving categories such as VMS, FMS and so on, we have used solution categories by spend type: solutions for Temp Workforce (workers provided staffing firms), Contracted Services/SOW (workers/outputs delivered by corp-to-corp service providers) and Independent Contract Workers (independent consultants, freelancers, typically sourced “directly”).

Note: While SAP Ariba did participate in our Procure-to-Pay and E-Procurement SolutionMaps, Fieldglass declined to participate in this first round of CW/S SolutionMaps. Whether this was due to the new positioning of Fieldglass as part of an SAP procure-to-pay suite or some other reason remains to be seen.

In any event, while the CW/S SolutionMaps may lack sizzle now in July, you’ll want to get ready for a heatwave after Labor Day. After that, the forecast may be cloudy, but it could be hot and steamy well beyond the holiday.

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

Have a happy and safe Independence Day.