David vs. Goliath of Staffing Industry

Getting what you want through on-demand mobile apps has now become ubiquitous and mandatory. And, yes, “Uber” is now a verb. Behind these mobile apps are largely startups, many of which have turned into multi-billion dollar businesses, often valued higher than the traditional incumbents. For example, Airbnb is now worth more than Hilton and Hyatt combined.

So, how are traditional businesses and incumbents responding to these startups? Let’s create “me-too” mobile apps. The question is – are they as good?

Many incumbents believe that they could create their own “apps” faster and better. In fact, they have far more financial and human capital resources than startups do. So, theoretically, they could easily produce something even better. Yet, incumbents are still failing at fending off these “apps.” Why?

It’s because incumbents are viewing them as just “tools,” and missing the need for fundamental changes to their business model, processes and company culture that need to happen simultaneously with the technology evolution. Slapping an app on top of the same, existing infrastructure does not result in transformation.

We are seeing the same dynamics in the staffing industry which has largely remained the same for decades – still highly opaque and inefficient. And it’s ripe for disruption.

As a result, over the past few years, we have seen startups entering the space, aiming to provide more transparency and efficiency for both job requestors and job seekers. They are bringing technology and business model innovation to transform the staffing industry in a way that companies and workers are connected in the most rapid, flexible, and cost effective way.

In response, some large staffing companies have recently introduced their own “apps”. For example, Adecco, one of the largest staffing companies in the world, announced the introduction of Adia. It’s marketed as a “mobile-first, cloud-based, end-to-end platform” to request temporary staff. In addition, TrueBlue launched JOBSTACK, the “mobile app for placing orders and dispatching workers.” Its goal is for workers to pick and choose jobs, and companies to request workers all via the mobile app.

On the outset, it sounds similar to what many digital staffing startups currently offer.  However, key issues still remain. 

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Let’s start with the potential problems with adoption of its new digital platform among its customers. What’s in it for them to use this new system when all they had to do was just to pick up the phone? How will it reduce their operational cost? How will it interact with other HR systems they have in place?

Further, think about how account managers would introduce and roll this out to customers. How would account managers train customers to use the new platform? Would account managers have sufficient knowledge of the platform to properly do the demo and address all the questions?

Finally, what about the perspectives of recruiters? Will the new app change the way recruiters source new candidates? How can recruiters still maintain personal touches with workers? How would recruiters address the worker related issues as well as the App related issues?

In contrast with the above model, digital staffing startups approach this conundrum in multiple different ways. In particular, the technology product itself is a key differentiator for startups – the name of the game is to create a product experience so intuitive and intelligent that customers and workers can just click and forget. For instance, imagine a platform that indicates the probability of getting jobs filled based on location, start time and availability of workers through machine learning. And it also tells how reliably workers will perform at the job. Imagine a platform that automatically sends the Uber carpool to workers traveling to the same job. Imagine a platform that simply updates time and attendance without workers ever having to touch a time card. Sounds futuristic, but digital staffing startups are already launching these features.

It’s still early days of digital transformation in the staffing industry, and it remains to be seen what kind of impact technology and mobile platform will have on the overall industry. However, one thing is for sure: With large staffing companies’ foray into the digital staffing space, the industry transformation is gaining real momentum, and the inflection point will likely come sooner than many pundits predicted. During this time, the battle between David and Goliath is surely one thing you do not want to miss.

MORE: 3 Ways Tech Can Help Recruit Contingent Workers

Yong Kim

Yong Kim
Yong Kim is the co-founder and CEO of San Francisco-based on-demand staffing firm Wonolo.

Yong Kim
Yong Kim is the co-founder and CEO of San Francisco-based on-demand staffing firm Wonolo.

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