The Contingent Workforce and Services (CW/S) Insider’s Hot List: August 2019
Welcome to the August 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 our 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 subjects included a partnership between SAP Fieldglass Japan and online worker platform Lancers, as well as an update on Fiverr’s post-IPO share price (now trading at more than $4 over the $21 it priced its IPO shares at). We also gave an account of different CW/S-related studies that were available in June (our summer reading list), and we also took a look at crowdsourcing and how the federal government is using it.
During July, many parts of the U.S. and other parts of the world experienced heat waves. While we won’t claim that these abnormally high temperatures were caused by the heat radiating from the developments in the CW/S space (“CW/S global warming”), we would say that July was a notably hot month for a broad range of areas in the CW/S landscape. So put on your sunscreen, put on a hat and let’s go!
Beeline and Avature — A marriage made in heaven?
To start with a development in a more established part of the space, Beeline (one of the largest global providers of VMS/software software solutions for managing the contingent workforce) and Avature (an established global providers of enterprise SaaS platform for talent acquisition and talent management) announced a partnership, in a somewhat tight-lipped press release.
It said “Avature and Beeline have joined forces to find new ways to move forward in the journey towards total talent management.” Avature, the press release notes, delivers innovative solutions on a global scale to optimize organizations talent acquisition and talent management strategies and is “an expert in designing people-centric staffing technology to secure top talent.” When combined with Beeline’s vendor management system, the announcement asserted, “this partnership provides all of the ingredients needed to deliver holistic management of permanent and contingent talent across the enterprise.”
Beeline CEO Doug Leeby was quoted as saying: “Beeline is committed to helping our global clients on their journey to total workforce optimization. That journey requires capturing all workers in the appropriate system and then integrating the data to enable strategic and tactical decision making.”
The announcement also stated that “Avature and Beeline are already in discussion with customers, in particular those in the global consulting space who are working at the forefront to solve this challenge.”
Reading the tea leaves, this seems to be something of a strategic partnership to help organizations “unlock a total talent vision.” The only detail mentioned was about the focus on customers “in the global consulting space.” And there are no details about how the two technology solutions will support a path to total talent, or what the methodology would be. But Beeline and Avature are established and well-regarded global companies, so I’m sure they’ve thought it through and have something in mind.
Something that we may deduce is that the partnership will likely be more specifically focused (at least at first) on “total talent acquisition” (versus the more comprehensive “total talent management” vision. Total talent acquisition is about just the front end of the worker sourcing/engagement, which is widely believed to be a largely common process of sourcing both permanent and contingent workers. Since businesses tend to have two separate processes, bringing them together could result in more efficiency and a more inclusive and agile sourcing practice.
Leeby has long prioritized total talent acquisition as the real place to start on the journey to total talent management (and we’ve been in complete agreement). Interestingly, the press release avoids using the latter term in favor of “total workforce optimization.”
Another motivation for this partnership may be competitive. With Coupa and SAP beginning to establish contingent workforce as an integral procurement and self-sourcing process, Beeline seems to now be leaning strategically toward the direction of talent management vs procurement. Leeby reportedly exclaimed, at the 2019 Beeline client conference: “People are not pencils.”
Avature, mostly grounded commercially in the world of permanent employee (though used by larger staffing firms), also seemed to develop a focus on being able to support the talent acquisition of contingent workers. In fact, in our February 2018 Hot List, we reported that Avature announced the general availability of its contingent workforce solution, designed to allow companies to leverage the gig economy more efficiently. The announcement stated that: “The solution, in combination with Avature’s CRM, ATS and Internal Mobility solutions, allows organizations to fully integrate contingent workforce with existing talent acquisition and talent management practices. This allows customers to develop a total talent management (TTM) perspective of their organization.”
So, for a number of reasons, the Avature-Beeline deal might be predicted to be a marriage made in heaven. We’re going to be very interested to see what this marriage spawns.
Is the gig economy over-hyped?
The National Council on Compensation Insurance (NCCI) — a relatively conservative group — seems to think the gig economy is over-hyped. Why do they care? Well, largely to understand the potential impacts of the gig economy on worker compensation insurance.
An NCCI article published in May said: “The gig economy has been touted as transforming the traditional employer/employee relationship. A shift of primary employment to gig work could significantly reduce WC exposure if gig workers are not classified as employees.” But, the article continues, “lacking data and inconsistent definitions has led to widely varying conclusions across studies on the current size and the future outlook for gig work. An analysis of self-employed workers reveals that the gig economy hasn’t taken over yet. The future of the gig economy remains uncertain and will likely be strongly influenced by court decisions and legislation around worker classification.”
But the NCCI did not simply dismiss the gig economy question. Instead it analyzed the hell out of it and published the report “Nontraditional Work Arrangements and the Gig Economy” in July. The key takeaways from the report:
Perhaps most interesting for our purposes was the fourth bullet: “The number of Americans doing electronically mediated work has tripled in the past five years, but income from this work still accounts for less than 1% of total income.”
The term “electronically mediated work” originates from the Bureau of Labor Statistics (BLS). In a BLS brief, it is defined as a type of employment arrangement in which workers:
- use a company’s website or mobile app to connect to clients or customers and obtain short jobs, projects or tasks;
- are paid by or through the company that owns the website or mobile app;
- choose when and whether to work; and
- may do these short jobs, projects, or tasks in person or online.
NCCI concludes its own report by stating:
“Self-employment and alternative work arrangements have not risen much in recent years. Both are falling as a proportion of workers’ primary jobs. Electronically mediated work is growing fast, but it currently engages fewer than 5% of U.S. workers even at the highest estimates. Studies consistently find that electronically mediated work mostly provides supplemental income and accounts for less than 1% of total income. But none of these results suggest that a significant shift away from wage and salary employment — or workers’ compensation coverage — is coming soon. … The current state of gig work is not yet a game changer.”
What does it all mean? Well, it means that many people and organizations are trying to figure it out — hype or not.
Freelancer banking continues to develop
While freelancers and gigsters may not seem that important to the NCCI, just the opposite is the case for the financial sector, which sees them as a large, high-growth market for specialized financial services. For further background on this, see my post from January called Freelancers and Fintech — Follow the Money, but for now let’s look at a few recent developments in this energetic space.
Shine gets brighter
TechCrunch reported in early July that a French startup neobank, Shine, launched two new features: (1) Shine Premium, a premium account with basic insurance coverage for freelancers, and (2) support for more types of companies using Shine Start. According to the article, “Shine is building an alternative to traditional bank accounts for freelancers. In addition to bank information and a payment card, users can register a ‘micro-company’ to start accepting freelancing jobs, create invoices, export transactions for taxes, etc.”
In January, Shine switched its pricing model to subscriptions. Every subscription comes with a simplified accounting management module; personal care team available by chat seven days a week; and invoice creation and online payments
- A Basic Shine account for a freelancer/micro-business offers a French IBAN, a prepaid MasterCard Business, support seven days a week and 20 transfers and withdrawals/month — for 3.90 €, or about $4.50, a month.
- A Shine Premium account, at 9.90 € a month, offers a freelancer/microbusiness everything in the Basic plan, plus check cashing (two free / month), accident guarantee (100 € / day in case of hospitalization), mobile insurance (covered screen repair up to 150 €) and hardware protection (doubling the manufacturer’s warranty); legal assistance (access to expert lawyers by telephone).
- Shine Start — Company Creator provides fast microenterprise entity creator and a six-month Shine Basic account for a flat fee of 34.90 €. To learn more about this specific offering, visit Shine Company Creator.
At this time, Shine is only available in France, but it provides one example of what the future of freelancer banking is.
Revolut spins faster
EU-Startups.com, an online publication focused on startups in Europe, reported in July that “London-based, Revolut, a digital banking company, has recently launched Revolut for Business, and over 120,000 freelancers, startups and SMEs have already signed up for a digital current account.” Revolut is a digital bank that caters to people and now freelancers and businesses that have the need for multi-currency accounts and payment capabilities.
Revolut was, like Shine, founded in 2015, and now reports that it has over 6 million personal banking accounts in Europe, the U.S. and on other continents and has processed over 350 million transactions. Unlike Shine, Revolut’s offering emphasized enabling customers spend and transfer money abroad with the real, interbank exchange rate.
Like Shine (you can see the pattern here …), Revolut has tiered subscription for personal bank accounts:
Now Revolut is extending those features to business customers to provide savings opportunities and additional services to freelancers and companies that do business internationally. “Revolut for Business” starts at just €7.81 / £6.99 ($8.50) for freelancers and €27.93 / £25.00 ($30.40) per month for companies — depending on the size of the business.”
According to the article, “on top of allowing businesses to hold, receive and send money in 29 currencies, Revolut eliminates foreign unfair transaction fees, letting businesses spend and transfer money in over 150 currencies at the interbank exchange rate (only 0.5% on weekends).”
In addition, EU-Startups’ reports, “Revolut for Business also offers prepaid corporate cards that can be easily issued to employees, topped up and tracked. It also allows suppliers and staff to be paid in bulk, simply by uploading a CSV file from accounting software into the account.”
Revolut for Business also provides account holders with a dashboard through which “businesses can easily monitor their accounts, cards and payments, and grant different levels of access to accountants and staff,” it was reported. “And with its Open API, businesses can integrate their bank accounts with accounting and other software including XERO, FreeAgent, Slack, Zapier, and more — simplifying and streamlining processes such as cash flow management, invoicing, payments and transaction monitoring.”
There are also other goodies that Revolut for Business account holders receive: “€2,235 / £2,000 ($2,400) worth of discounts and benefits, including a 10% discount on Apple products, a nice discount on Slack, as well as credits for Expensify, Google Adwords and much more.”
Xolo leaps higher
In July, Estonia-based Xolo (formerly LeapIN, founded in 2015) announced a $6.8 million Series A round, along with the launch of what it calls “a revolutionary form of entrepreneurship” (more on that below). The funding round was led by European venture firms Karma Ventures (Estonia), Vendep Capital (Finland) and Leap Ventures (France).
In the announcement, Xolo describes itself as “an online platform for launching and running a one-person business anywhere in the world.” The announcement also states that Xolo is a “new ‘virtual company’ service [that] will enable millions of professional freelancers to radically reduce the complexity and cost of engaging with national governments and operate in a borderless world. The service will cut the time needed to launch a freelance business from weeks to minutes.”
The company, according to the announcement, “has been offering a full suite of services for global freelancers from 2015, including an online company formation service, banking, accounting and compliance.” Now, new offerings “will bring that concept further by removing the last obstacles to launching a business.”
One of the new offerings, Xolo Go, “launches freelancing businesses in minutes, complete with dedicated bank accounts, invoicing, expense management and payouts.” The second offering, Xolo Leap, “helps launch EU-registered companies with full banking, accounting and tax compliance services based on Estonia’s e-Residency system.”
Sakari Pihlava, a partner at Vendep Capital, was quoted as saying: “Xolo is building something revolutionary — an interface between the micro-businesses and the governments that eliminate the complexity of reporting and compliance.”
Xolo’s largest markets today are Germany, Spain, France, the UK, Ukraine and Turkey.
Olopolis, Blockchain and the Decentralized Employment Organization (DEO) or Employment Cooperative
Talk about the future of work!! I stumbled upon a press release this week titled “Opolis Off-White Paper Unveiled: Preparing Workers for Their Freelance Future Using Blockchain Tech.”
OK, they got me at Opolis.
According to its own press release, Opolis published a special report that details “the financial, technical and social implications of their platform which will give freelancers access to the same quality financial automation, benefits and services typically reserved for full-time corporate employees.” Opolis sees itself building “the world’s first employment ecosystem designed to empower the ‘self-sovereign worker.’”
Opolis Founder John Paller is quoted as saying: “With so much of the current workforce considering joining the gig economy, the future of work is increasingly dynamic. Opolis was founded on the belief that existing HR tech systems and infrastructures are ill-equipped to prosper in this new reality, and as such, Opolis is building the necessary framework for the self-sovereign worker. This means gig workers will have the power to make their own decisions about the benefits they want and keep them as they switch jobs, without relying on employers.”
Paller also said: “The ’employer/employee’ relationship will be fundamentally reinvented over the next 10-20 years, and we are leading this innovation with an entirely new approach to employment that is worker-focused.”
Opolis calls its new ecosystem “The Employment Commons.” It will offer “anyone in the freelance or gig sector access to the same healthcare, insurance and financial automation as traditional full-time employees. Through a combination of legal and technical frameworks, Opolis [will align] the incentives of ecosystem players in a sustainable, user driven, network-based public utility infrastructure,” the press release states.
The press release also reported that “Opolis’ Employment Commons will feature guilds called Decentralized Employment Organizations (DEOs), where anyone self-employed can access group benefits, including:
- Crypto or State-based Currency Payroll
- Financial Automation
- Work Multiple Jobs; Receive 1 Paycheck
- Group Health Benefits
- Health Savings Accounts (HSA/FSA)
- Self-Directed Retirement with Cryptocurrency Investment Options
- Life Insurance
- Short & Long Term Disability Insurance
- Workman’s Compensation Insurance
- Unemployment Insurance
- Paid Time Off Accrual
- Automated Saving and Investing
- And more (of course).
Whether Opolis is building the real future of work or chasing a utopia will be revealed in the next 15-20 years. But if you want to learn more about the Opolis Employment Commons, you can blow your mind reading the “off-white paper” right here. Or visit the Opolis website at https://opolis.co/.
And in other news …
In case you happened to miss our July news coverage of Talmix, Fiverr, and Aon and Bunker, we’re happy to repeat them briefly now:
Talmix: On July 12, we reported in Afternoon Coffee that Talmix, the London-based independent talent sourcing/management solution, announced the launch of its Talent Passport, with the lofty goal of replacing “CVs and resumes for talent on its network, increasing the richness of data for every user.” It is intended to “combine information from multiple sources to create a single and complete view that will allow more precise and faster matching of skills to opportunities.” A brilliant idea, it may be a bit of an Everest goal (without the lines). Check out the press release to learn more.
Fiverr: Just this week, we reported that the online freelancer services platform Fiverr had announced its launch of Studios, which allows freelance workers on the Fiverr platform to self-organize a project to offer an “agency-like team.” Studios is billed as “a transformative product, offering sellers on its platform a new way to collaborate with each other.” It enables Fiverr freelancers to “join forces under one ‘Studio’ to create projects combining their different skills and experience to offer full service solutions to tackle larger and more complex assignments for businesses.” To learn more, see our article here.
Aon and Bunker: We also reported this week that Aon — a leading global professional services firm providing a broad range of risk, retirement and health solutions — and Bunker, a self-described “instant business insurance and compliance platform for independent workers and enterprises,” announced a partnership to address the compliance management needs of Aon’s growing base of “digital economy” clients. What it’s all about is a bit too complex to summarize here, so I strongly suggest you check out our article to learn more about the partnership and about Bunker.
So that brings the August 2019 installment of the Contingent Workforce Insider’s Hot List to a close. We plan to be back with more in September. In the meantime, remember: When you’re hot you’re hot, when you’re not you’re not.