Having spent most of my career working in the staffing industry, I must admit to a certain apprehension about these new hugely funded, cloud-based behemoths called “Gig Economy Platforms.”
We are suppliers and vendors to the industry, so what affects our customers also affects us.
So, who are these “upstarts” and how will their appearance shape the industry?
On some days I can see where these newer platforms may present opportunities to the industry, both large and small.
But on other days, I can envision them almost as “Invaders from Outer Space” eager to “beam-up” thousands of our client’s customers into a new, cloudy and not so nice, staffing-industry alternate reality.
“OK, slow down,” I tell myself, “let’s think this thing through.” So I decided to write down the compelling opportunities and challenges that I foresee with Gig Economy competition.
The New Gig Economy Platforms as “Friend”
Staffing companies identify client needs that can be outsourced. Then they recruit, screen, hire, train, supervise, run payroll and handle all those tedious administrative tasks; then bill the customer for their services.
Customers could always hire these employees on their own, but they choose to outsource for several good reasons.
In this entire process, these new platforms certainly can help. First, they have thousands of freelancers, representing a wide variety of skills, in one central data source — easily accessible.
If a staffing company were to view these platforms as simply a large pool of “temp workers,” each of whom would be happy to act as their sub-contractor, a lot of opportunities would open up.
Because these platforms operate on a global scale, the prices for services can be excellent. Staffing companies can pay the platform and the freelancer and still make a good profit.
For example, a business in the USA may pay a web developer $100 an hour or more. Someone in India, Pakistan, or the Philippines, with equal skills, would be happy to do the same work for $20 an hour.
The platforms also provide services that include freelancer profiles, work history, ratings, a communication platform, secure payment utilities, and record keeping.
There are problems like language barriers, vetting, and sometimes quality. But the platforms have an interest in making things right. They ensure the work is satisfactory or the freelancer does not get paid, and, the freelancers themselves have an interest in keeping their ratings high.
So, there may be room to foster ideas and create relationships between the traditional staffing model and these Gig Economy platforms.
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The Gig Economy Platforms as “Foes”
Most everyone has heard of “Uber”, the web-based, cloud platform that provides a new kind of Taxi service. I never considered Uber to be a staffing company competitor Uber announced its “Uber Works” app, which enables people to find opportunities in customer service, cooking, cleaning and manual labor.
An NBC news article put it this way: “Uber Works can help businesses reduce scheduling headaches, weather seasonal variations, and staff up for unexpected demand” — core elements of the staffing industry.
So here we would have one of these overnight companies operating in virtually every city in the US but now selling the services of their underutilized drivers directly to other businesses who may need part time or occasional workers.
With massive amounts of data, capital and the latest technology at their disposal, it certainly seems that these gig economy companies have the potential to at least shake the industry.
If Uber can do this, so can a lot of the other cloud-based national and international platforms.
I see these newer gig economy platforms as simply staffing companies using newer technologies to penetrate and grow market opportunities.
What we must all keep in mind is that as technology continues to modernize and shape our industry; so must our applications and procedures.
