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

11/01/2019 By

Welcome to the November 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, subjects included several interesting partnerships, such as Workforce Logiq and Upwork as well as Beeline and TalentNet. We also covered Bullhorn’s enhanced VMS integration solution, developments in the “New Law” space as well as going-ons in the gig platform space.

From where I sit, about 20 miles south of San Francisco, “hot” is almost a dirty word, with the Kincade Fire raging about 50 miles north of here and nearly 200,000 people under evacuation orders. Hopefully without sounding cynical in this Hot List, I wonder if there is a CW/S analogy here. Even what starts as a small brush fire can turn into a conflagration and vastly alter the landscape. Perhaps it’s not that drastic for CW/S, but new developments and innovation continue to stoke change in the evolving industry.

Uber Works launches on-demand gig platform in Chicago

It happened in Chicago, and Spend Matters was there. After a year of piloting in the shadows, Uber announced on its website the official launch of Uber Works. Uber starts with a premise that challenges the traditional staffing business:

“Today, millions of Americans use staffing agencies to find work. Yet the status quo is not ideal, for workers or for businesses. Workers face rigid scheduling and opaque information about where they can pick up shifts and how much they can expect to earn. Businesses struggle to staff up to meet peak demand, and have to grapple with missed shifts and high turnover.”

As we might expect, Uber believes “a new, technology-first approach can provide faster and easier means for people to get work, while offering greater insight into the many opportunities for work that are out there — improving the experience for workers and businesses alike. … That’s why over the past year, we’ve studied and built tech solutions that can help positively impact a workers’ shift experience and eliminate bottlenecks to finding work.”

So Uber is focusing on that part of the labor market that involves sometimes unpredictable shifts and shift workers. Uber believes (benevolently, of course) “that finding work shouldn’t have to be a job in itself. For positions as diverse as being a prep cook, warehouse worker, a commercial cleaner or event staff, Uber Works aims to make it easier to find and claim a shift.”

But while Uber challenges the traditional staffing industry, it is also partnering with staffing firms. Unlike in its ride-sharing business where drivers are simply assumed to be 1099s, Uber Works “has partnered with staffing agencies, including TrueBlue, who employ, pay and handle worker benefits.” Incidentally, TrueBlue also operates a similar platform of its own.

According to a recent TrueBlue press release about its Uber deal, “TrueBlue introduced its JobStack platform to connect companies with on-demand, temporary and seasonal staff 24/7” in 2017. JobStack, which currently supports nearly 17,000 clients and fills a job every nine seconds, will “remain separate and distinct from this new Uber Works relationship.” Instead, “TrueBlue created a new business venture called PeopleWorks to serve as an employer and payroll service provider for workers booking jobs on the Uber Works app,” the press release explained. “PeopleWorks’ tech-powered back office takes care of the employees’ needs throughout the employment lifecycle, including same-day pay.”

The staffing firm TalentBurst is also partnering with Uber in a similar capacity (according to SIA). While TalentBurst may not be as “out there” as TrueBlue, TalentBurst founder and CEO Brad Talwar was reported to say that “his company serves as an employer of record. Once a worker signs up with Uber Works, TalentBurst handles the background checks, I-9s and manages all things the worker needs as a W-2 employee. TalentBurst also has internal staff that onboards the workers before they are added to the Uber Works platform. We manage anything and everything that is needed for them to complete their job successfully on the Uber platform.”

Interestingly, while Uber was piloting Uber Works in Chicago, Chicago-based Shiftgig was exiting the on-demand staffing market and pivoting to become a technology platform that staffing businesses could use to compete with the likes of Uber Works and others. To read more about Shiftgig’s restructuring (including selling its staffing operations to two staffing firms) and the company’s pivot to being just a technology solution, see a series from this year and the last story from 2018:

Oh, and BTW, is that a smokey smell in the air?

The Empire (Uber, Lyft and DoorDash) Strikes Back

A Verge article this week reported that “a group of drivers and couriers for Uber, Lyft, and DoorDash launched a new group called Protect App-Based Drivers and Services, which is aimed at passing a ballot initiative in California to counteract the effects of the state’s recently passed gig worker bill” (Assembly Bill 5, or AB-5). According to the article, “the effort is being supported by the companies [Uber, Lyft, and DoorDash], which have vowed to spend $90 million to get the measure passed in 2020.”

The article further stated that “the companies were preparing this contingency plan even before California’s governor signed the bill into law. On Aug. 29, The New York Times reported that Uber, Lyft and DoorDash would spend $90 million ($30 million each) to pass a ballot initiative that would essentially exempt them from the law. (InstaCart is also involved, but it hasn’t committed to spend any money to support its passage.)”

According to the Verge article, the proposed law being put to voters would include the following:

  • At least 120% of the minimum wage
  • $0.30 per mile for expenses such as gas and vehicle wear-and-tear
  • Health care subsidies consistent with employer contributions under the Affordable Care Act for drivers who work 15 hours a week or more
  • Occupational accident insurance to cover on-the-job injuries
  • Automobile accident and liability insurance
  • Protection against discrimination and sexual harassment
  • Recurring background checks of drivers
  • Mandatory safety training of drivers
  • Zero tolerance for alcohol and drug offenses
  • A cap on driver hours per day to prevent sleepy driving

But according to another article by TechCrunch, “Gig Workers Rising organizer and driver Edan Alva said in a statement: ‘This is yet another example of corporations and billionaires trying to exempt themselves from the democratic process by using wealth and fear tactics,” she said. “For years, these companies have refused to pay drivers fairly or treat us with respect. After working 80-hour weeks, sleeping in our cars and surviving on poverty wages, drivers organized and won support for AB-5 from both the public and lawmakers. Now, instead of obeying the law, Uber, Lyft and Doordash want to spend $90 million to avoid accountability — all while claiming it will ‘protect’ drivers. Uber and Lyft were nowhere to be found for the past many years when drivers like me needed healthcare or basic labor protections.’ ”

Apparently, this is one legal battle that is just heating up.

To learn more about AB-5 (which seemed to put the gig platform companies squarely in its sights), see our coverage:

Funding events and acquisition surge

October saw an unusually large number of funding events (Brightfield Strategies, Utmost, Science Exchange, RigUp, Coople and Fountain) and acquisitions (Bullhorn/Erecruit, Workforce Logiq/ENGAGE Talent, Premier/Medpricer). That’s over $500 million changing hands in just one month!

Analytics firm Brightfield raises $53 million series A

In early October, Brightfield — an artificial intelligence and big data analytics company that optimizes contract labor spend and program performance for employers, MSPs and staffing firms — announced a $53 million Series A round. The investment will fund the company’s market expansion and the continuing development of its platform,TDX (Talent Data Exchange). According to the company, TDX has become “a source of artificial intelligence trained by over $350 billion in labor spend from over 300 organizations across over 15 industry verticals and 100 countries.”

The company reported that TDX “is powered by the world’s largest labor data consortium of employers, staffing firms, managed service providers and talent networks.” It “ingests ongoing member data feeds on job, cost and performance data from Procurement, Finance and HR systems to record and analyze the context of job descriptions, statements of work, contracts and financial transactions between employers, suppliers and workers.”

Brightfield competes in the rate-benchmarking space with PeopleTicker, SAP Fieldglass Live Insights and HCM Talent. That said, Brightfield’s solution footprint goes beyond rate benchmarking.

Spend Matters has been covering Brightfield and TDX for several years. To read more, see:

New workforce technology provider Utmost raises $11.2 million series A

Almost out of nowhere, a new and unique technology solution for contingent workforce management has appeared on the scene. In early October, a start-up called Utmost came out of stealth mode to publicly launch what it calls (in long form) the Utmost Extended Workforce Management System. The company simultaneously announced an $11.2 series A round, led by Greylock Partners, with participation from Workday Ventures.

Among the three founders of Utmost are two former Workday executives with in-depth knowledge of the Workday platform. Clearly, Utmost Extended Workforce could complement Workday’s core HCM solution, focused on “permanent,” full and part-time employees. Now part of the Workday Software Partner Program and partner solution marketplace, Utmost is a solution integration option for any of Workday’s customers.

According to the company, Utmost Extended Workforce enables companies to gain visibility into their extended workforce and provides both managers and extended workers with “an intuitive workflow — instead of spreadsheets and siloed legacy systems — to manage onboarding and offboarding, and the entire worker lifecycle.”

But the company has also noted that Utmost Extended Workforce is envisioned as a comprehensive platform that “helps enterprises and their contingent workers — freelancers, contractors, temps, outsourced resources and consultants — to engage and seamlessly and efficiently work together.” Utmost indicated that it is “building solutions and partnerships specifically for extended workers across health, wealth and administrative services so they can better participate in this shifting economy.”

To learn more about Utmost, see our recent PRO brief, Utmost’s Extended Workforce System: What’s Behind It, What Is It and What Does It Mean for Enterprises?

R&D sourcing solution Science Exchange raises $20 million more

In mid-October, Science Exchange — a SaaS-powered marketplace that enables sourcing and management solution for outsourced research and development — has raised an additional $20 million in equity and debt financing. Since its founding in 2011, Science Exchange has raised $92.5 million, the company reported.

According to the company, the Science Exchange platform was created to remove barriers in the outsourcing process, providing individual scientists and R&D organizations “instant access to a network of pre-qualified service providers, as well as contracting, project management and reporting tools.” The platform frees scientists from the administrative tasks and delays associated with sourcing, establishing and managing service provider contracts. Science Exchange also enables organizations to consolidate R&D outsourcing spend into a single strategic relationship, driving efficiency and cost savings.

At the time of the funding event, the company reported that it serves over 100 enterprise customers in the biotech and pharmaceutical space, providing scientists at enterprise R&D companies with immediate access to over 3,000 scientific service providers including top CROs, CMOs, and academic laboratories.

Spend Matters began following Science Exchange in 2018. The company, which has a partnership with e-procurement software provider Jaggaer, was awarded a highly coveted berth in Spend Matters’ 2019 50-to-Watch list. To read more, see:

Online labor platform RigUp raises $53 million series D

In mid-October, the 5-year-old online marketplace RigUp for on-demand services and skilled labor in the energy sector announced a $300 million series D round led by Andreessen Horowitz (a16z). RigUp has raised $393 million in private equity and $30 million in debt financing since its inception.

RigUp is a “matching marketplace,” but that’s just a piece of the ecosystem-spanning platform. According to RigUp, its “platform matches contract workers with energy companies operating in the upstream, renewables, midstream, and downstream sectors looking to efficiently source and manage skilled trade labor.” And it “offers contract field workers access to the largest network of energy companies, flexible payment terms and streamlined access to partners that provide comprehensive healthcare benefits and training.”

RigUp projects $2 billion gross service volume in 2019, more than a 200% increase from 2018. According to an October 2019 company information sheet, RigUp reported it had over 300 employees and that it had registered more than 75,000 contractors and service providers across “100+ upstream, midstream, downstream and renewable service categories.” The company also reported the adoption of over 3,000 “leading independents, major producers and OFS buyers (so-called, energy industry “operators”).

Spend Matters has been covering RigUp since the March 2019 Hot Lits, in which we juxtaposed RigUp with supplier risk management company Avetta (also covered by Spend Matters).

Impressive as it is, “How deep into the market can RigUp drill?” and “When will it turn into a gusher?” Certainly legitimate questions to ask in this Age of the Unicorn and Earth, Wind and Fire.

To read more, see:

European online platform Coople raises $32 million series C

In late October, Switzerland-based Coople — a flexible on-demand human resources or “just-in-time” staffing platform founded in 2009 — announced that it had raised $32 milliion. This brings Coople’s total funding to $75 million, according to Crunchbase.

According to Coople’s announcement, the funding will further technological development and expansion in existing markets as well as the introduction in the Netherlands and another market. Coople operates in Switzerland and in the UK, where it has been since 2016.

According to the company’s website, Coople uses algorithms to match the need of employees for shift- or hour-based work with the demand of companies (in the retail, hospitality, event / promotion, commercial and logistics sectors). The company, “provides a value chain that includes a comprehensive automation of processes: planning, recruitment and onboarding as well as matching between employees and employers, checking of work requirements, administration, payroll and billing processes are part of the services.”

Today, Coople reports having around 120 employees in Zurich and London and a platform spanning over 400,000 registered, flexible workers and over 20,000 registered companies, including blue chips like ZFV Unternehmungen, Globus, Migros and Swisscom.

Gig platform Fountain raises $23 million in series B

A late October article by TechCrunch, reported that gig-platform Fountain (formerly OnboardIQ, and previously unknown to us) completed a series B round. The current round brings total investment in the company, since its founding in 2014, to $33.9 million, according to TC.

Fountain’s platform, reports TechCrunch, enables businesses to source and screen candidates for hourly employment jobs. It is also reported that the business targets two main kinds of employers: (1) ride-sharing companies, delivery platforms and home services providers and (2) food and retail businesses (such as Taco Bell, Burger King and KFC chains).

According to TechCrunch, Fountain’s “employee-hiring and contractor-vetting operations span 50 countries and 700 cities,” and “the company currently sources and processes more than 1 million inbound candidate applications each month, filling some 150,000 jobs in the process.”

Staffing software Bullhorn acquires rival Erecruit

Upstream in the contingent workforce supply chain, Bullhorn, which provides comprehensive software for staffing/recruiting agencies, acquired rival Erecruit. The terms of the acquisition have not been disclosed.

As we noted in our coverage, the acquisition represents another step in the consolidation of the providers of comprehensive (ERP-like), fit-for-purpose, SaaS solutions to staffing/recruiting firms. Bullhorn reported to us that, post acquisition, it has about 11,000 customers and over 1,000 employees globally. While the sector is vast in terms of numbers of staffing firms and there are other providers that provide similar solutions, none has the scale of Bullhorn (or a higher market share among larger staffing firms).

Bullhorn had already introduced its unified platform solution, Bullhorn One, in June of this year. Referring to it as “the first start-to-finish staffing solution,” Bullhorn tells its clients and prospects that “Bullhorn One delivers best-in-class, cloud-based staffing software for your entire business, unifying business processes from across your complete recruiting lifecycle into a single, streamlined workflow.”

Bullhorn has said it believes the acquisition of Erecruit “will help Bullhorn further enhance its vision of delivering a ‘unified’ solution to firms looking to leverage the power of automation to streamline operations and drive business growth.” But the company has not disclosed whether it is pursuing a platform unification strategy (i.e., replatforming Erecruit capabilities to Bullhorn One).

For more of our coverage of Bullhorn, see:

Workforce Logiq acquires ENGAGE Talent

At the end of October, Workforce Logiq, “a global provider of workforce management software and services to large corporations,” acquired ENGAGE Talent, a predictive analytics and AI software company. The terms of the acquisition were not disclosed.

According to the Workforce Logiq, ENGAGE Talent uses “AI predictive models with data from 40,000 external sources to deliver the most holistic and validated talent intelligence worldwide.” And companies such as Allstate, Dell, CarMax and others use ENGAGE to “improve talent acquisition, candidate engagement, competitive intelligence and labor market analytics.”

Workforce Logiq’s acquisition of ENGAGE Talent should not be thought of as an isolated event. It is part of a strategic transformation that Workforce Logiq started about a year ago from being a traditional provider of various managed services to being a next-generation, technology-enabled provider of services that address customers current and future needs in a way that traditional models and technology cannot.

For more of our coverage of Workforce Logiq, see:

Premier Inc. acquires hospital spend control solution Medpricer for $35 million

At the end of October, Medpricer, which describes itself as a provider of technology-based solution for optimizing healthcare provider savings across “purchased services” contracts, was acquired by Premier Inc., a $1.2+ billion, publicly traded healthcare improvement company. Premier paid $35 million, and the acquisition was debt financed. But other details about the deal are not currently available.

Medpricer’s spend management solution platform, mSource, uses machine learning to validate, compare and onboard purchased services suppliers; track and measure spend by category, supplier and facility, we have reported. It also benchmarks contracts terms to ensure competitive rates, set and manage specific savings targets; and manage contract compliance.”

Spend Matters has been following Medpricer for about a year, viewing it not just as a vertical niche solution but as a provider developing a unique, innovative sourcing and contract and spend management that could be a model for other vertical or horizontal solutions. We noted in January that VMS-based services source-to-pay (S2P) solutions have been around for a good number of years, and, other than Coupa’s Services Maestro (launched in January 2018), we have not detected much in the way of new enterprise S2P solutions for services spend — though maybe we have not been looking well enough.

What will become of Medpricer and mSource remains to be seen (provided it continues to be visible to us). In any case, we wish all at Medpricer well, and we hope to continue following the solution through Premier Inc.

For more of our 2019 coverage of Medpricer, see:

The Contingent Workforce and Services (CW/S) Insider’s Hot List: January 2019 (Special Focus Edition on Services)

Topcoder platform gets smarter and more productive

Topcoder, a leading crowd-based software development and data science platform (acquired by IT giant Wipro in 2016), announced the addition of new data science and AI features to the Topcoder platform.

Wipro describes Topcoder as “the world’s largest technology network and on-demand digital talent platform with more than 1.5 million developers, designers, data scientists and testers around the globe. Topcoder empowers organizations like Booz Allen Hamilton, Comcast, GE, Google, Harvard, IBM, Land O’Lakes, Microsoft, NASA, SpaceNet, U.S. Department of Energy, Zurich Insurance and more, to accelerate innovation, solve challenging business problems and tap into hard-to-find technology skills.”

The new capabilities include Native GPU Support, Container-based Solution Evaluation System Multi-layer Privacy, Security, Contest Casting and Crowd Powered Analytics.

What does it mean that platforms are adding capabilities and becoming much more sophisticated? It’s good to remind ourselves that work/services platforms are not only find-the-talent matching systems, but that many platforms are increasingly focused on getting work done to produce specific outcomes cost-effectively.

A Topcoder client, Jose Silva, emerging technologies manager for Anadarko Petroleum/AAET, was quoted as saying: “Through our open innovation program, we have been able to solve problems in a new way. AAET is tasked with incubating and implementing innovative ways of working in a changing digital landscape, and open innovation is an important part of this strategy. Access to top-tier talent, a pay-for-performance model and the ability to scale resources on-demand has delivered meaningful value to Anadarko, and we see this model as the way of the future.”

To read more about crowdsourcing and other platform models, check out:

Procurement, time to up your game?

Spend Matters collaborated with Deloitte LLP to produce its recently published 2019 Global CPO Survey. Even while confronting “fewer resources and thinner budgets,” Deloitte says, CPO’s are being asked to do more beyond “delivering sourcing-centric cost savings.” And while “many CPOs may feel like they’re ready to drown in a sea of complexity, they can still find ways to stay afloat — or even identify new opportunities to move their organizations forward.”

How? The survey “explores how CPOs can change their lens on improving core value chains and organizational resources, tap transformational digital capabilities to revolutionize procurement.”

One of four focus areas, Talent Complexity, CPOs can consider new approaches to “people, organizational models and how procurement teams execute on their business plans.” The final section of the report, “Driving the change: Addressing talent challenges to master complexity” concludes with three recommendations. The first two are:

Make talent investments that best align with the business’ key objectives. CPOs need to make sure their talent investments mirror their organization’s strategy.

Widen the talent search net. Reshaping the talent strategy can take many different forms, including training, developing channels for recruitment and shifting the approach to BPO, external support/gig workers, or supply chain managed services.

All sound advice. But it was the third of these recommendations that really captured our attention.

“Go digital: Tap new digital marketplaces to access hard-to-find talent in the gig economy. In the past several years, we’ve observed an increasing shift of knowledge workers away from traditional work arrangements toward freelance arrangements. The gig economy is no longer made up of simple tasks and on-demand delivery; it also increasingly consists of complex services and highly skilled workers, many of whom are intermediated by digital talent marketplaces. New platforms have arisen to help businesses not only find this key freelance talent but also manage interaction with them — from project scoping through to payment. So, if there’s a skill set or knowledge base (e.g., particular expertise for designing a sourcing strategy for a new category) a procurement organization sorely needs, they would do better to consider a 21st century approach.”

There, procurement! The glove has been thrown down. If you haven’t already, read the 2019 Global CPO Survey.

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