The Staffing Software Metamorphosis: Eat or be Eaten

In a 2011 Wall Street Journal article, “Why Software Is Eating the World,” Marc Andreessen, who runs Silicon Valley-based venture capital firm Andreessen Horowitz, laid out the case documenting how software (really, more broadly, information and communication technology or ICT) is ingesting large parts of the economy (and its many industries) and turning it into something else. The 20^th century industrial-driven, physical asset-based, supply chain-connected (product dominant logic) economy has been mutating into a 21^st century digitally-driven, information-based, ecosystem-integrated (service dominant logic) economy. Deloitte’s “Thriving in a world of ecosystems” offers a comprehensive, insightful perspective on the new economy of digital businesses, ecosystems, and platforms that is emerging.

Regardless of your views on Uber, Airbnb, Elance-oDesk, the legal/regulatory challenges or the questions about whether humans will win the race with the machines, I believe whatever sector of the economy or business you are in today, you deny these trends at your own peril.

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With respect to staffing, the questions we should all be asking are: “How is software or ICT eating staffing?” “How fast is it eating staffing?” “And, finally, what does it mean to me?” Fortunately, many of the businesses in the staffing supply chain comprehend the inevitability of what lies ahead, are asking these questions, and are forming positions and moving forward.

Snacking on Staffing
Here’s how ICT is snacking on staffing:

• It’s saturating (marinating) staffing by (and challenging it to choose from and selectively adopt) myriad kinds of technology solutions addressing the human capital management life-cycle,
• It’s garnishing (and possibly swallowing) new technology-based “staffing models” (like online work marketplaces, freelancer management systems, et al) that are precursors to a coming “digital human capital ecosystem.”

With respect to the current generation of firms laboring away in the staffing supply chain, between the sampling going on internally and the banquet being set externally, the food chain is in an active state.

Smorgasbord
To get a taste of the extent of what’s cooking in the kitchen, look at a graphical map produced by incubator Talent Tech Labs, representing what it calls the Talent Acquisition Technology Ecosystem.

Some staffing businesses — large and small — are stepping up to the challenge of adopting new technologies to further optimize their operational processes or even transform them (or, at the extreme, developing entirely new kinds of staffing services). Some that come to mind are Zenith Talent (with its crowd recruiting model for VMS recs), iTeam (recently partnered with IQNavigator), Cerius Interim Executives (CV Match), Freelance Physician, and other staffing firms starting to use a range of technology solutions that can optimize and transform current operating and business models (such as NextCrew). In addition, businesses like MBO Partners or Synergy are moving down this path, embracing technology as a way to do business differently. Interestingly, various larger staffing firms are untightening their belts and chowing down — the prey becoming the predator:

• Randstad’s Innovation Fund made several major technology investments, including in online work platform companies Gigwalk and Twago.
• Adecco’s Beeline acquired the freelancer management system (FMS) platform Onforce last year.
• Recently, Japan-based staffing firm Recruit made investments in two different online work platform companies, Gengo and 99Designs, and earlier was the acquirer of Indeed. Recruit (recently profiled by SIA’s David Francis) is an interesting (maybe, for some, unsettling) case of a staffing business that provides a real example of software eating staffing! Today the fifth largest staffing firm in the world, Recruit actually started as a software and information services business (and still is, in part) and found its way into traditional staffing through its various job board businesses.

So when it comes to answering how software or ICT is eating staffing, it becomes clear there are many ways to cook that goose. And note: I’ve only made passing mention of the beast lurking in the corner (LinkedIn), or those other exotic, exogenous species, online work platforms (Elance-oDesk, Work Market, et al), that have potential to eat up large chunks of the contingent workforce marketplace that most traditional staffing businesses will likely never get a taste of.

Feeding Frenzy in the Future?
Let’s face it, guys and gals, the handwriting’s on the wall. In other words, some of us are on the menu —even if many of us are uncomfortable thinking about it, let alone dealing with it.

Leveraging more and more ICT is an increasing requirement to perform in the current staffing supply chain and the emerging “human capital digital ecosystem.” To me, this is a foregone conclusion. Going forward, the correct thing to do is to ask and think: “How can I take advantage of these technologies to not only optimize current processes, but also to transform them — even to the point of creating new services (recruiting into and/or curating talent pools, for example)?” or “How can we blend people and technology in new ways to function more efficiently or effectively — or to delight and benefit customers (including workers and ecosystem partners) in new ways?”

Yes, software is eating staffing, but the converse is also true, staffing is eating software. “Eat or be eaten” may be the new caveat circulating in the staffing industry, separating the lions from the sheep. In fact, those firms that do not eat software and increase their consumption of it risk extinction. And those staffing businesses that eat software and increase their consumption of it, while becoming connoisseurs and great chefs, will thrive.

What do you believe? Comment below.

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