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The Contingent Workforce and Services (CW/S) Insider’s Hot List: June 2019

06/03/2019 By

Welcome to the June 2019 edition of Spend Matters Insider’s Hot List, a monthly look at the contingent workforce and services (CW/S) space that’s available to PLUS and PRO subscribers. For those new to the Hot List, each edition covers the prior month’s important or interesting technology and innovation developments in the CW/S space.

In last month’s Hot List, our commentary included Uber’s IPO, Shiftgig’s pivot, Moonlighting’s funding round and its use of blockchain, and EY’s ongoing expansion of its own freelance platform.

When it comes to new developments, May was something of a frenetic month in the CW/S space. So, to take it all in and provide a sense of the breadth of developments, this month, we’ll be presenting a somewhat greater number of developments than usual, while letting those developments speak more for themselves. Understanding each of the developments in themselves is certainly useful, but appreciating the whole of the parts may be at least as valuable.

Online work/services platforms capitalize like crazy

Capitalization of a range of work/services platform types (whether coming from private equity firms or IPOs) has been going crazy, over the past year (think Upwork IPO last fall) and more so over the course of 2019 into May. Perhaps we should not be surprised that most of the capital is going into B2C, true gig platform companies (in March, Lyft raised $2.34 billion in its IPO on a valuation of $24.3 billion), but B2B is getting its share, (in April, Wonolo raised $13 million, bringing Wonolo’s total funding to $25 million).

Here’s a brief roundup of what’s been going on just in May 2019:

  • Uber, the ride-hailing platform, raised more than $8 billion on a valuation of $84.2 billion
  • Deliveroo, a food delivery platform, raised $575 million in a funding round led by Amazon (bringing total funding to date to $1.53 billion).
  • Doordash, a food delivery platform, raised $600 million Series G financing on a valuation of $12.6 billion (this followed a funding round of $400 million in February)
  • Fiverr, the online marketplace for digital creative services, announced it is going public.

In the next section, we mention a few other platforms that have announced new funding events in May. It’s an active scene, and investment dollars just keep pouring into work/services platforms, leaving us with two big questions: (1) Will the faucet ever get turned off? (2) And more importantly, will any of these companies ever turn a profit?

Hot, hot, hot: On-demand staffing in the hospitality/events segment

In our last Hot List, we reported on Shiftgig’s pivot to a technology provider and the sale of its online staffing operations to two hospitality/event staffing firms (which will continue to use Shiftgig’s technology platform). And this past month, there were clear signs of rising digitization and the use of online platforms to transform the fast-paced, ever-changing, commodity labor market.

  • Instawork, a Silicon Valley-based, on-demand staffing app for gig workers and hospitality businesses, announced in late May that it has secured $18 million in new funding. To date, Instawork has received total funding of $28 million since its founding in 2015. According to the press release, Instawork (which is available on Android and iPhone devices in English and Spanish, currently operates in San Francisco, L.A. and San Diego. It is also launching in greater Phoenix by the end of June and has plans to launch in Las Vegas and Chicago this summer. Instawork claims to be the largest hospitality gig marketplace in the United States (which may be partly due to Shiftgig having recently divested its online staffing operations covering 14 major U.S. cities).
  • Indeed (the online job site, wholly owned by global player Recruit Inc.), announced last month that it had “signed an agreement to acquire Syft, a leading recruiting platform for the hospitality, event and light industrial sectors in the UK. The press release reported that “Syft is a leading recruiting platform in the UK that enables hospitality and industrial businesses to hire flexible and part-time staff. Jobseekers go through a compliant on-boarding process and get access to thousands of shifts daily. They also enjoy employee benefits such as pensions, holiday pay and sick pay, as well as perks and above-industry average pay.
  • Adecco, one of the largest staffing conglomerates in the world, announced in its early May Q1 2019 earning presentation that Adia (its mobile-first, end-to-end platform for employers looking for temporary staff for short assignments in the hospitality/event industry) was continuing to mature. According to the report, Adia has been achieving a customer satisfaction rating, NPS > 30 and >30% fully zero touch candidate experience. Adecco reported in its 2018 Annual Report that Adia, which was created in a partnership with Infosys in 2017, was now “delivering 10x improvements for users,” noting that “candidate on-boarding in the U.S. takes two minutes, compared to 25-30 minutes for a traditional staffing business.” It was also reported that Adia was achieving combined (client and worker) Net Promoter Scores, of 30% to 50%, which are “consistently higher than traditional staffing businesses. Adia operates in Switzerland, the UK and the U.S.
  • Another platform player in the hospitality/event staffing space, Jitjatjo, an on-demand staffing platform focused on the service and hospitality industries, announced earlier this year that it had raised $11 million in Series A funding. Launched in 2016 Jijato is now operating in New York City and Chicago, but plans to expand in 2018. Other platforms include BlueCrew, Qwick, Workn, Roto, Catapult, et al.

As we said: hot, hot, hot — with both start-ups and staffing corporates in the ring. From our perspective, hospitality and event staffing (where commodity jobs, speed and efficiency reign), certainly lends itself to on-demand platform models. It’s possible that this may be the staffing segment where online platforms have the soonest and most substantial effect.

The worker classification world war rages on

Worker classification “world war” rages on across at least three continents. This is certainly a major barrier in further optimizing how businesses source and use human capital (labor, workers, talent — call it what you will). As demand outstrips supply in many labor market segments, this issue becomes much more urgent. The U.S. economy is effectively at full employment, and inadequate supply is not only impacting U.S. companies, it’s also going to be constraining the growth of the economy (which could have serious and possibly unpredictable repercussions).

Here’s a taste of the bitter fighting taking place in May:

On the one side

According to a recent article published in Law Intelligence, Recent guidance from the Department of Labor’s (DOL’s) Wage and Hour Division (WHD) and the National Labor Relations Board (NLRB) “each authored guidance declaring certain workers in the gig economy independent contractors.” The article interprets these policy shift as “a push by the current administration toward classifying gig economy workers as independent contractors under federal workplace laws.” The WHD analyzed whether workers for an unnamed “virtual marketplace company” (VMC) are employees or independent contractors under the Fair Labor Standards Act (FLSA) and found “economic dependence” on businesses as “the touchstone of employee versus independent contractor status and evaluated the nature of the relationship using the existing six-factor test.”

In May, the article also reported, “the NLRB published its own advice memorandum dated April 16, in which it declared a group of Uber drivers (seeking unionization) to be independent contractors under the National Labor Relations Act (NLRA) and citing the Super Shuttle case, determined that the drivers have “significant opportunities for economic gain and, ultimately, entrepreneurial independence” The “NLRB opined that the drivers were properly classified as independent contractors and therefore not eligible to unionize under the NLRA.”

On the other side

According to an article published in VOX, the California State Assembly passed a bill that could give Uber and Lyft drivers basic labor protections for the first time. The article reported that the bill “would make it harder for companies to label workers as independent contractors instead of employees, a common practice that has allowed businesses to skirt state and federal labor laws.” The law will come up before the Senate but is likely to pass.

It was reported that “hundreds of thousands of independent contractors in California, ranging from Uber and Amazon drivers to manicurists and exotic dancers, would likely become employees under the bill.” That will mean “these workers would suddenly get labor protections and benefits that all employees get, such as unemployment insurance, health care subsidies, paid parental leave, overtime pay, workers’ compensation, and a guaranteed $12 minimum hourly wage.”

According to the article, the bill instructs businesses to use the “ABC test” to figure out whether a worker is an employee. To hire an independent contractor, businesses must prove that A, B and C apply to the worker (who must A. be free from the company’s control, B. doing work that isn’t central to the company’s business, and C. have an independent business in that industry).

There you have it: Further evidence that, in the U.S. at least, the classification issue is far from being solved, and the on-going process of government regulations and judicial rulings (at any level of government or the courts) may be making matters worse. Ending the Worker Classification is not likely to occur anytime soon, and workers, hiring businesses and innovative businesses should hunker down.

And elsewhere … technology-driven innovation continues in spite of it all

While worker classification complexities and demand-side reservations continue to create a drag on widespread and large-scale adoption by larger organizations , technology providers continue to develop and launch various kinds of innovative solutions seemingly every month.  What follows are some that we learned of during the month of May:

From Holland with love … or was it Russia, after all?

Perhaps suggesting that other kinds of (non-classification) compliance problems can be solved, BDaily reports the UK launch of Netherlands-based Flime.  The article states that Flime is “a new online, automated management service for businesses that use contractors and freelancers “offers a new cloud-based service that enables businesses to organize and manage their freelance suppliers seamlessly, as though they were in-house staff. It ensures all finance processes are fully compliant with tax legislation and business regulations and any of the administration associated with freelance work is minimized.”

According to the article, ensures that freelancers’ invoices are 100% tax compliant, any stored freelancer data adheres to the new GDPR regulations and businesses and contractors alike can benefit by operating an instant, effective, hassle-free, cross-border payroll. Interestingly, the article also notes that “ has enjoyed significant success with its innovative platform in Russia, and now has its sights firmly set on growing market share throughout Western Europe.” Can we assume that a platform that has been tested in Russia should be bulletproof?

Are blockchain freelancer platforms here to stay?

In the ongoing invasion of blockchain into the world of online freelancer marketplaces (which have been following consistently in the Hot List), we briefly note at least two developments in May within the emerging blockchain-based human capital ecosystem:

Pssst … Moonlighting and HireVibes got something going on

Blockchain News reported that the on-demand, blockchain-based freelance platform Moonlighting (covered in earlier Hot Lists) announced its “first blockchain partnership with HireVibes, a blockchain jobs platform that incentivizes freelance, contract and permanent hiring via cryptocurrencies.” HireVibes will be one of the first platforms to have access to Moonlighting’s 720,000 freelancer profiles. It describes itself, in its “light paper, as a platform that connects jobseekers, employers and recruiters on a new job search platform … based on the EOS blockchain” and improves “the hiring process by leveraging peer referrals to fill open positions, creating a fair incentive model with and giving to a worthy charity everytime a role is filled through HireVibes.”  Getting some good vibes from HireVibes.

BountyOx has other ideas

We came across a unique platform called BountyOx in a May article published by According to the article, “BountyOx connects companies to a network of tens of thousands of freelancers [who receive] cryptocurrency payments for completed work. These tasks, known in the crypto space as bounties, can be as simple as [writing a post] about a company on a personal social media page or as complex as completing coding or graphic design work.”

BountyOx appears to be more of a crowdsourcing platform than a freelancer marketplace. The BountyOx website FAQ notes that “BountyOx has many use-cases that can be applied today, these include online marketing, software development and/or quality assurance, security audits and consulting for business processes improvements, design competitions, whatever that a company would require outside of traditional freelance approaches.”

“Bounties can be posted for both small tasks and large tasks alike, and hosts can allow a fixed number of submissions for each bounty or an unlimited number of submissions. BountyOx does not provide contract or full time positions but rather enables hosts to post tasks that anyone can complete without prior approval. Unlike traditional freelance platforms where one person is hired to perform a task. Instead, BountyOx enables many people to be hired to perform a single task.”

BountyOx CEO, Angelo Adam, was quoted In the article as saying: “Essentially, the company posts a job and any freelancer can submit work which meets the job description requirements and receive compensation for completing that work.” Adam continued: “It’s a little bit different than most platforms like Fiverr. Those platforms are formatted where the freelancer posts their services and they are approached by a company that seeks to hire them on an individual basis. Our platform offers a form of work engagement where the company posts the job, and it’s open for as many people to complete the work, and whoever finishes the work receives the compensation.”

We’re all still human … even contingent workers … right?

That seems to be the talk that a San Francisco-based start-up is walking. Founded in 2016, Sense announced that it had launched a new product (called Messaging) and had also raised $13.5 million in Series B funding bringing the enterprise-ready company’s total funding to $23.5 million.

In the press release, Sense describes itself as “the leading contractor engagement platform that enables staffing agencies and recruiters to personalize their interactions with contractors at every stage of the employment cycle.” It is further stated that “Sense works with over 200 clients, integrates with 15 leading ATS platforms and is working with six of the top staffing agencies in the U.S., including Adecco and Apex Systems.”

According to the press release, Sense has been working with staffing firms to “increase redeployment and achieve real-time insight into a contractor’s engagement throughout the employment cycle.” And it has “engaged with over 20 million candidates in the U.S., since the company in late 2017.”

It is rightly noted that “as the balance of the labor market shifts toward contingent workers, facilitating a positive hiring and work experience has become key for both businesses and recruiters.” And, more than any other factor, communicating information at the right moment and on the proper channel has become a defining element of success, and the best communications tool for recruiters has been found to be text messaging.

The announcement stated that a new product, “Sense Messaging, allows recruiters to seamlessly and personally communicate with candidates by SMS and WhatsApp while accessing contextual information from Sense Engage, the company’s consolidated communication and analytics platform,” along with the staffing firm’s Applicant Tracking System.

“By establishing and quantifying these hyper-personalized relationships with their candidates,” the announcement continues, “staffing firms have clearer insight into not only their performance but also the quality of their placements, referrals and repeat interactions at scale.”

“Redeploying candidates to multiple contracts is one of the least achieved but most valuable growth strategies for staffing agencies. And according to the company while up to this time only around 5% of talent is redeployed after the first contract, Sense Messaging increases redeployment rates by up to 20%.” The company has reported that “during Messaging’s three-month testing period, more than 50 Sense customers adopted the solution to improve their agency’s business performance, recruiter efficiency, and the overall candidate experience.”

Rob Lowry, executive vice president of Apex Systems, was quoted as saying: “In the war for talent, Sense’s solution addresses the most pressing need in the staffing industry — improving contractor engagement and redeployment rates. Sense’s combination of a people-first approach and strong analytics has definitely given us an edge.”

Joyce Russell, president of Adecco Group U.S. Foundation, said: “Sense helps transform the Staffing Industry to move beyond a transactional mindset and move toward a goal of building true lasting relationships with their talent.”

From our perspective, that seems important, given this picture:

According to this study by ClearlyRated, CareerBuilder and the American Staffing Association, the overall staffing employee Net Promoter Score in the U.S. fell from 51% in 2011 to 35% (a loss of 16 basis points or a decline of 31%). Looks like the industry is “getting the message.”

So that brings the June 2019 installment of the Contingent Workforce Insider’s Hot List to a close. We plan to be back with more in June. In the meantime, remember: When you’re hot you’re hot, when you’re not you’re not.