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Sharing Economics: Where are things heading for work and workers? (Part 1)

untitled (4)Things are now all abuzz about the “Sharing Economy” — so  much so that it is frequently dismissed as hype.  However, it should not be entirely.  “Sharing” may not refer to an “economy,” but rather new economic patterns and models.  These models are not mainly “communitarian”  (like precursor Napster), rather “commercial.”

“Sharing economics” refers to certain economic patterns (realizing value through exchange and/or  co-creation) that are (a) enabled by digital platforms, designed/evolved-to-purpose by entrepreneurs or organizations and are (b) supported by the following conditions:

  • There are unutilized or underutilized resources/service capacities (physical and intangible assets, human labor/talent, etc.).  Note:  subsequently, “use” is in reference to these unutilized or underutilized resources/service capacities 
  • There are agents (people and other entities, like businesses) which have the rights and the ability to transfer limited rights of use to others, through an exchange across the digital platforms
  • There are agents (people and other entities, like businesses) which have the ability to  acquire limited rights of use, through an exchange across the digital platforms, and actually affect the limited use.
  • As regards the above, there is currently or there is a high likelihood of achieving legal/regulatory harmony among consumer and commercial interests and any government authorities with jurisdiction.

When all of the above conditions are met, then potentially, viable  economic activity patterns and business models (based on sharing, as such) can arise.

And they have:  in diverse, innovative forms that would not have been imaginable before internet-supported digital platforms.

It is hard to say what patterns and models might arise in what areas of the economy, in what existing or new industries.  Discoverable, digital representations of almost any agent or unutilized or underutilized resources/service capacities (not just a person with a car, a person with living place, a person with a living place and surplus energy), sensors, smart-objects and the Internet of Things, and finally the expansion of API-accessible artificial intelligence altogether challenge our imaginations and ability to think out of the box.

Sharing–as a form of economic activity, as defined here–is in its infancy.  However, unlike the rather vague, over-hyped New Economy of the late 1990s, the new concept of sharing is based on real economic logics, driven by powerful economic forces, and demonstrating already that there are functioning manifestations that will expand.

Still, the limits of what can be economically shared are unknown. It is a new frontier.  We are only at the beginning of our exploration of what under-utilized and unutilized resources can be made subject to new models of economic exchange and value co-creation.

While modern sharing models can potentially subsume economic exchange across a broad range of resources and agents  (cloud computing infrastructures, for example), this series of blog posts is quite specifically focused on exploring how sharing models are starting to impact human work and workers as well as businesses.

One question to be addressed is: What sharing models are  impacting work and workers and businesses (i.e., -what forms they are taking already and what forms are emerging)?  In addition, playing out the evolution of the sharing economic activity over the next five and ten years, what kinds of changes in the whole structure of work, workers, and businesses might we witness as sharing models continue to evolve.

More posts to follow.

 

 

 

 

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Dealing With Our Latest Crisis — A Surplus of “New Economies” (Sharing, Peer-to-Peer, On Demand, As-a-Service, etc.)

Screenshot_44It now seems quaint and simple that during the dotcom era we only needed to try to wrap our minds around  one “new economy” (whether we were talking about Amazon, eBay, Peapod, Petfood.com, etc.).  It was all new and different;  and while it did give rise to some very successful businesses that dramatically altered whole industries/sectors and changed consumer and business behavioral patterns, it never really amounted to a whole “economy.”

The surplus of “new economies” muddle

Now, about 15 years later, with (a) ongoing digitization of the whole economy, (b) the emergence of digital platform business models (in sectors ranging from music to staffing to transportation to lodging to education to…), and (c) wide-spread changes in consumer and business behavioral patterns (supported by generational change), we are actually starting to see the emergence of a “new economy” (one that functions very differently in many ways from the one of 20 years past).

Curiously, as the outlines and features of a “new economy” are starting to actually take shape, various business marketers and “media-channeled experts” have been “informing” us about many “new economies:”

  • The Sharing Economy
  • The Freelancer or Gig Economy
  • The Peer-to-peer Economy
  • The Collaborative-Consumption Economy
  • The On Demand Economy
  • The As-a-Service Economy
  • The Access Economy
  • The Platform Economy

These different “economies” are variously defined by various commentators. And, often,  different businesses (like UBER, Elance-oDesk, Airbnb, etc) are variously described as representing one or more of these different “economies.”

Complicating matters further, the discourse that has been propagating across the media has become rather frothy, reaching an almost religious pitch (as different business marketers stake out different positions and experts argue about “what is what,” “what of it is good or bad,” and “whether such concepts such as  ‘sharing’ actually constitute economic activity“).

It seems we have reached that point in the hype cycle (such as happened with “cloud”) when words and terms are taking on a life of their own and are losing their connection to the reality at hand.

While perhaps not the main reason for this the growing confusion,  the abuse of the term “economy” is a notable thread running through and contributing to the  muddle.  Certainly, an economy does not have to be big to be an economy (e.g. a village economy). However, the way these new terms are used seems to suggest something very significant, like a whole paradigmatic shift from the old ways to the new ways (something like a “new economy,” as the term was used in the dotcom era–or even as the terms “industrial” or “knowledge economy” have been used with much more success).

Is there a better way to think about this?

Still while these terms may not describe “economies” in any really meaningful way, they do seem to be describing something.  That something, to me, seems to be something more like new consumer and business behavioral patterns; more often than not, the basis is technology that has been organized in ways that allow consumers and businesses to do things–realize value by exchange and/or co-creation–in new and often radically different ways.

There is an understandable temptation–due to the muddle now arising–to simply throw up one’s arms and dismiss all of these “new economies” terms out of hand. I am tending not to give in to that temptation.  I’d rather try to conceive of a consistent framework that will explain the recent developments within the economy as well as these new consumer and business patterns of realizing value through exchange and/or co-creation which are stimulating the creation of new terminology/descriptors.

A framework based on ICT and Platforms

The framework I’ve been thinking about is a pretty simple one.

The basis of it is ICT (information and communication technology):  ICT is increasingly being organized and deployed in ways that are supporting new consumer and business patterns for realizing value through exchange and/or co-creation (often–though not always–through new business models that entrepreneurs/investors/businesses can leverage to build valuable assets of “firms” in the classical sense).

One of the most visible and widespread ways in which ICT is being organized and deployed to these ends is what–now well-documented (and being studied)–is being referred to as a “platform” (i.e., a structure consisting of ICT that is arranged to encourage and enable “agents” –people, consumers, workers, businesses, et al–to interact, especially realize value through exchange and/or co-creation).  “Platforms,” in the way the term is now being used, tend to encourage novel and/or  “better” ways for the agents to realize value through their interactions.  Examples can range from social networks to pure online marketplaces to platforms that make available unique structures that give rise to and enable radically new interaction patterns and means of realizing value (such as when people in places need rides and can be matched with ordinary drivers with their ordinary cars who can give those people rides and have payment facilitated automatically … or when, as in crowdsourcing, a problem can be worked out by hundreds or thousands of partial contributors around the world).

ICT/Platforms as enablers of new consumer and business patterns for realizing value

In 2015, clearly platforms and other configurations of ICT (such as SaaS applications, etc.) are the main foundation for and enablers of the new consumer and business patterns for realizing value through exchange and/or co-creation.  And significantly, the  new consumer and business patterns  that can be spawned on this digital foundation are “emergent” (a set of evolving and unpredictable and often very novel outcomes). These emergent patterns of interaction for realizing value exhibit crucial features that can be identified and described.

This is where terms like “sharing” or “on-demand” begin to make sense, as descriptions of the features adhering to these novel patterns for realizing value through exchange and/or co-creation.

  • Hence, “on-demand” can refer to a pattern where some resource or service can be ordered for consumption in a relatively timely, direct, and simple way.
  • Alternatively, “sharing” can refer to a pattern where the rights to use some unutilized or underutilized resource or service capacity can be allocated to multiple agents under some limited “terms of use” (such as for certain period of time or with limitations on scope of use, etc.).
  • “Peer-to-peer” could refer to patterns of interactions  for realizing value through exchange and/or co-creation that are not hierarchical and mediated by a traditional organization or firm, but rather are lateral and largely direct and transparent between transacting parties.
  • “As-a-service” could refer to patterns where what was formerly ordered, consumed, and paid for a something bundled to a high level of scale or aggregation and cost (such that the pattern is very “lumpy”), can now be ordered, consumed, and paid for with the liquidity and other properties of a “service” (such as purchase and consume only what you need when you need it).

The potential for a taxonomy instead of a muddle

The framework for understanding new ICT/platform-based patterns for realizing value through exchange and/or co-creation could include a taxonomy of the attributes of the emergent patterns as they arise and take root (and perhaps exhibit common features).  In fact, this is what appears to have started to happen in an ad hoc way in the marketplace–a kind of wild, uncontrolled frame of reference that has shifted toward disorganization and meaninglessness,  rather than an ordered, logically-consistent, disambiguated  referential structure (a meaningful taxonomy).

It is interesting what becomes clarified, when one starts to think in terms of this ICT/platform-based framework and one begins to think about a taxonomy of features of emergent patterns of interaction for realizing value.

  • For example, it becomes clear that different patterns of realizing value can have different features in common (so, an online freelancer marketplace pattern can have features of on-demand, as-a-services, and peer-to-peer –even sharing, if an under-utilized resource is involved, such as when a worker can only find a part time job).
  • Another example of clarification: traditional concepts like renting and new concepts like sharing or collaborative consumption can be reconciled –renting has gone on for a long time and still occurs in this framework as monetary payment for something time-shared, etc.–however, where there is a difference is that the new patterns (that can include renting as a feature) are ICT/platform-based or enabled (a good illustration would be comparing traditional car rental ZipCar or the like).

It seems to me there would be much explanatory value in adopting such an ICT/platform-based framework and in developing a corresponding taxonomy of the features and emergent patterns of agent interactions for realizing value through exchange and/or co-creation.

This is a project that I have been tempted to describe, and one which I might be tempted to undertake.  In any event, I hope I have at least demonstrated why this viewpoint and such a project could be useful/valuable.  At the very least, it would rid us of the current muddle (“Our Latest Crisis — A Surplus of ‘Economies'”).

Conclusion

More and more, our economy is shifting from one where the most important underlying infrastructure is no longer simply physical, but is becoming more and more digital.  It is in this sense that a “new economy” is in fact emerging before our very eyes.  Terms like “sharing economy” or ” on-demand economy,”  etc.. trivialize and obfuscate the very important developments that are actually occurring all across the economy–as  ICT is increasingly being organized and deployed in ways–very often as “platforms”– that are enabling/supporting novel consumer and business patterns for realizing value through exchange and/or co-creation.  Interestingly, the “new economy” is actually now finally arriving, finally taking shape, after 15-20 years.  It would probably be a good idea to start “mapping out” this new world, that is unfolding before us, in a more rational way than independent, market-driven actors are now.  In fact, the leading business actors in the new, emerging  ICT/platform-based industries/sectors (and their own business interests) would be well-served by such a rational mapping  (versus the current state of discourse that poorly represents what is happening);  and those business actors should support such a project to accomplish this.

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What Intuit’s Recent Moves Around “Self-Employment” Might Signal to the Staffing Industry

images31M6D12PWhile the staffing industry has been prospering in the recent economic recovery, it might not be a bad idea to pay attention to some new signals and what they might mean.

When a company as large as Intuit starts doing something close to your sector boundaries, you might want to take note.

So what’s Intuit been up to of late?

Intuit, the $4.5 billion dollar software and services company ( owner of QuickBooks and TurboTax products used by SMBs and individuals) has taken some noteworthy steps in early 2015.

  • On January 16th, Intuit announced its launch of “QuickBooks Online Self-Employed” a new product that makes it easy for the rapidly expanding population of freelancers and independent contractors to simplify their financial lives.”  The announcement cited the growing numbers of freelancers and independent workers that is expected to grow steadily in coming years, “led by an increase in the on-demand economy, such as ride-sharing, peer-to-peer rental, project-based job platforms, and online retail platforms.”
  • On January 26th, Intuit announced its release of “a new integration for marketplaces using Stripe for payment processing, that will enable the growing number of on-demand workers – freelance drivers, delivery-people and other independent contractors – to automate tax reporting via the new QuickBooks Online Self-Employed product.”  The announcement also stated: “With this new integration, on-demand marketplaces can give their users the free benefit of having their income data flow securely into QuickBooks Online Self-Employed, so that they always have a clear picture of their tax obligations and can easily track deductions, such as business expenses and mileage.  This integration is available today to all marketplaces using the Stripe platform to pay their independent contractors. An example is HourlyNerd, an on-demand consulting platform made up of over 7000 experienced professionals, which uses the Stripe platform.”
  • And most recently, on January 28th, this announcement appeared:  “Intuit and Uber Partner to Simplify Filing Taxes for On-demand Economy Workers:  Partnership Includes Free Version of QuickBooks Self-Employed for Uber Driver Partners.”  This process is also accomplished with Intuit’s integration with Stripe.  Alex Chriss, vice president and general managers of Self-Employed Solutions at Intuit stated:  “Uber is giving hundreds of thousands of individuals a new and exciting way to earn income and many will encounter a new set of tax obligations.  We’ve set out to empower people working in the on-demand economy by giving them easy to use tools for managing business revenue and expenses. By partnering with Uber, we’re able to offer a tailor-made solution that simplifies tax time, and provides clear visibility into their income throughout the year.”

According to the press releases:  “Since launching in beta in the fall of 2014, QuickBooks Online Self-Employed has helped entrepreneurs track over $50 million in business expenses, helping them save money on their taxes and simplify their financial lives.”

Not only does this service make the “financial lives” of freelancers, gig workers, and independent professionals simpler, it also assists them in remaining compliant with tax laws applying to IC or 1099 Independent Contractors (something that will be beneficial to platform intermediaries and to whomever engages those workers to provide a service).  This new fast growing digital services ecosystem, jump-started by giant Intuit, is not likely to stop with Hourly Nerd and UBER.  Presumptively, Intuit has other online platforms for freelancers and independent workers in its sights, and is not thinking small.  In one of the announcements, it was stated that, “according to research conducted by Intuit and Emergent Research, 43 percent of the U.S. workforce will operate as a self-employed business by 2020. While self-employment can offer benefits like flexibility, it can also leave independent contractors on their own to navigate complicated legal and financial tasks like managing tax withholdings.”

By all appearances, Intuit is thinking big.

OK, so if I know Intuit, but not the staffing industry, what do I need to know about the latter?

Since the 1990s, temporary staffing agencies and their particular business model have had a growing, dominant hold on the supplying of contingent workers to businesses. Staffing agencies provided a standardized, risk-mitigated way for businesses to engage contingent workers.  Staffing agencies acted as the Employer of Record for the workers, paid them (at weekly, semi-monthly, or monthly intervals) as their employees through conventional payroll systems (frequently ADP or Paychex), and handled payroll deductions for tax withholdings, etc.).  The model has been accepted as quite safe for businesses wanting to use contingent workers and not get in potentially costly trouble with an IRS increasingly suspicious of the use of 1099 contractors (who, unlike temp agency employees, do not have payroll taxes withheld).

However, the temp staffing model is now quite mature,  dating back perhaps to the late 1940s.   And though it has been updated with automation and embedded into a kind of managed  industrial supply chain for ordering and delivering temporary workers*, it still works basically the same way:

  • A  business in need of a worker sends an order to a staffing agency (consisting of branch offices, recruiters, etc.), the staffing agency finds a suitable candidate, and the candidate (if accepted by the business) is sent to work at the business on temporary assignment.
  • The staffing agency makes a profit by marking up all of its costs to run its business (the worker, taxes, recruiters, office overheads, etc.) and charging the business that uses the worker.

While advantageous in some ways to the client businesses (i.e. risk mitigation, et al), there must be an acceptance of the staffing agency “cost structure” and “standard operating/process model.”  And it is clear that these two issues are considered challenges by client businesses, which

  1. have increasingly established “contingent workforce management programs” to control and dampen staffing supplier costs, et al, and
  2. have, in recent years, started to show an interest in other engagement models beyond the “standard agency temp model” to (a) further contain risk and cost, as with SOW models, or to (b) achieve more speed, flexibility/agility, and transaction efficiency by finding suitable ways to engage freelance or independent workers.

All of the above, and particularly the last part about looking at the engagement of freelance and independent workers, represents the beginning of a shift of attention among client businesses/ contingent workforce buyers from the “standard agency temp model” to other models of engaging contingent workers in different ways that will be beneficial to these businesses. A recent report by research and advisory firm, Ardent Partners and sponsored by Beeline, DCR Workforce, and MBO Partners, (“The State of Contingent Workforce Management: The 2014-15 Guide for Managing Non-Traditional Talent”) reveals some eye-popping data from its survey of contingent workforce buyers.  Those surveyed were asked what would they consider [an important?] source of contingent talent now in 2014 versus versus two years later in 2016.

Picture2

Overall, the Ardent Partners data seems to suggest the start of a shift in focus from “Traditional staffing suppliers/agencies” to other more direct, less heavily intermediated ways of engaging contract talent or contingent workforce. Perhaps not coincidentally, while businesses/contingent workforce buyers have started to eye other (perhaps more direct, flexible, efficient) ways of engaging contingent workers and expand their so called “extended workforces,” two other trends have been emerging:

  • Since the Great Recession, there appears to be a trend toward a larger part of the workforce being prepared or disposed to work as gig workers, freelancers, independents, self employeds… While it is not clear how much participation in this “independent workforce” is by choice or out of necessity, it appears that there are more of these kinds of work arrangements with “non-employees,” and they are expected to grow (if they can be conducted in legitimate and sustainable ways).
  • Over the past 15 years, and with accelerating growth over the last 10 years, online platforms have been appearing as new ways to support the formation and conduct of contingent work arrangements. These range from well-known names like the $1B Elance-oDesk to  new-comers like HourlyNerd (now an Intuit partner).  “Freelancer marketplace platforms” probably number nearly 200 around the world today, and growing;  and there are perhaps 100 or more types of platforms that function differently from those acting as marketplaces for freelance labor:  there are crowdsourcing platforms for micro task workers or idea generators (used by many large companies);  there are platforms like UBER that bundle contingent labor with other services and use of assets like a car;  in 2014, we saw the emergence of so-called FMS or freelancer management system being offered to client companies by Work Market, Elance-oDesk, Beeline Onforce, et al, as software platforms they could license to have visibility into and truly manage their important, ongoing relationships with the freelancers and independent workers (as private talent networks or talent clouds).

In short, these trends have been converging in past years:

  1. Businesses have been looking for ways to have more flexible, efficient, “extended” workforces, and they have started looking beyond the  “standard agency temp model” for ways of accomplishing their aims through other kinds of contingent work arrangements and different kinds of technology-based work arrangement intermediaries.
  2. The workforce at large (an increasingly globalized one) seems to be “moving forward” from the realization that the 20th century industrial employee-employee covenant is long gone, and employment in the 21st century is really “self-employment,” whether as a series of extended W2 employments with different “employers” or as an on going set of different gigs, projects, engagements as a 1099 IC or as a W2 worker payrolled by a 3rd party only for the duration of an engagement with a given client company.  In all these cases, workers must operate as independents who are responsible for managing their own human capital, their shifting sources of work and financial administration.
  3. ICT (Information and Communications Technology ) is being marshalled by certain businesses to create new technology-based ways of intermediating different kinds of contingent work arrangements.  Much of this has occurred rather visibly in the form of relatively comprehensive “two-sided platform models” (as we noted above), but this is also occurring within less monolithic architecture where different platforms and digitally-enabled service provider can come together into digital services ecosystems in which multiple players collaborate to support a  work arrangement intermediation function. 

So, then what might Intuit’s new “QuickBooks Online Self-Employed” offering and partnering moves signal to the staffing industry?

Over the past few years, the staffing industry as a whole and a large part of temp agency staffing suppliers have been on a roll, doing pretty well, and brimming with confidence and optimism about the future–so there may be a lot thinking in the industry that runs along these lines:

  • The future is looking good:  businesses are demanding more and more contingent workers and our time-tested temporary staffing model is fully-accepted as safe and reliable. Our clients know that with us they have managed risk related to co-employment, classification, tax withholdings, etc.  They know that engaging ICs and freelancers is dangerous game and will do it only in exceptional cases or when its rogue spend.
  • Sure, there’s  technology-driven change and disruption–but we’ve adapted to job boards and made them our partners (now we’re doing the same with LinkedIn). True, VMS has been challenging, but most staffing firms are working out a live-and-let-live co-existence with VMS-built programs. And now we have automated our businesses and processes to the teeth and figuring out how to use the many new technologies that will help our recruiters be more effective.
  • Online platforms, online staffing?  Yes, we’ve looked into this.  We’re aware of the Elances and oDesks, etc.–but that’s not staffing, that’s something else and really based on labor arbitrage.  And it’s not solid–compliance is a big gap that’s going to come back to haunt them. FMS, Freelancer Management Systems?  Have heard something about that, but not sure about how it relates to what we do.

I think that, with some exceptions, the above is representative of the broadest consensus of thinking in the staffing industry (at least as I have “read it” over the past few years).  In many ways, the position is a defensible one–to a large extent the above statements/positions have been true and are true.  The standard temp staffing model is going strong.  While the industry tends not to view technology strategically, it does use it and tries to come to terms with it.  Online platforms are different from staffing businesses, and perhaps (as it has appeared) they serve small businesses and deal with contingent workers that staffing firms don’t; and for most, compliance issues may not have been looked at seriously enough. However, the above consensus thinking in the staffing industry (what I’ll call “staffing dominant logic”) may become  more tenuous as we allow trends to play out the future arrive month by month, year by year.

Here are some of the issues:

  • In reality, the “standard staffing agency” model is very mature and–even with automation and some process innovation–has remained static over many years.  And client businesses–driven by competition and economics–are evolving rapidly in their thinking and needs for ways of engaging talent and contingent workforce in the build up of their blended and extended workforces.
  • The staffing industry historically has been one that responds to technology and customer needs, but has not demonstrated the competency to look forward strategically and harness new  technologies satisfy emerging customer needs and potential demand for new services and solutions.  These biases lead the industry to underestimate or not foresee coming changes in customer needs and to overlook technology as a strategic weapon of large scale innovation.
  • The staffing industry has probably not developed a deep enough understanding of emerging online platform models and what their recent appearance really reveals and where it’s all going.  The tendency has been to view online platforms as a particular thing (primarily online freelancer marketplace platforms) that function outside of existing staffing markets and have severe limitations.  Naturally, this is shortsighted for many reasons (such as, there are many different forms of platforms that can meet different needs, platforms can evolve and add compliance capabilities, etc.). Perhaps most important, however, is the failure to see that the specific, visible instances of platform businesses are really just “harnessed manifestations” of an underlying torrent of different technologies (effectively what IDC calls “Third Platform“) finding applications in and restructuring how needs can be met and business can get done. We are only beginning to get a taste of what can be accomplished technologically in intermediating work arrangements, whether by comprehensive platforms or by distributed digital services ecosystems***.  In the next 5 years, Third Platform technologies will continue to flood the staffing industry and find their own levels (optimal applications).

When you add it all up for the staffing industry, there is some vulnerability, based on the maturity of its dominant business model in which it is firmly anchored, some myopia about what the market scope of the work arrangement intermediation industry should be and where client needs are tending and expanding, reading the needs and behavioral shifts in the workforce at large, and not fully understanding technology and what it means for the future expansion and evolution of the industry over the coming years. From my perspective, this vulnerability has already been present, but limited.

  • First of all, the new innovations in how contingent work can be arranged have all tended to be happening on a relatively small scale, well outside of the boundaries of the traditional staffing business (providing capable individual contingent workers to mostly medium to small size businesses for assignments that average weeks). If one accepts that the staffing industry need only protect its market share of current forms of intermediated contingent work arrangements then one can rest easier; however, if market share of future forms of intermediated contingent work arrangements is considered, then there is more of a problem.
  • Second, the much discussed emergence of a “freelancer economy” seems to be really in its infancy and growing slowly, gated by (1) the gap in practices and processes for mid-large businesses to engage independent workers in ways that are functional on a large scale and legitimate/low risk and (2) the gap in process and institutional supports among freelancer and independent workers that enables them to function efficiently. legitimately, and sustainably. Most of the technology-based platforms visible thus far are, to a lesser or greater extent, working on these issues, but progressing gradually; FMS, which promises to help make a leap forward, at least with (1) above, is really at a seminal stage of development and proving-in.

While vulnerabilities to the existing staffing industry and its current ways of doing business have been present, for the most part they have continued to be limited.  While standard staffing models may be slow, inflexible, and transactionally costly (relative to the standards of the 21st century “On-demand Economy” ways of doing business), there have been no competitive alternatives that measure up in terms of business and compliance “legitimacy.”  The organization and “legitimization” of other means and forms of work arrangement intermediation (i.e., using technology, platforms, digital ecosystems to enable more dynamic work relationships with freelancers, etc.) has remained at a relatively small scale and has been progressing quite gradually and incrementally (even as the powerful surge in harnessing technology to drive innovative intermediation models has been driving platform businesses in labor, transportation, and lodging to engage with regulators and adapt to find legitimate paths forward, the progress has still been piecework and incremental).

However, now in January 2015, software and services giant, Intuit, enters the picture, with its “QuickBooks Online Self-Employed.”  From the staffing industry perspective, perhaps, such a development might just as well go unnoticed.  Intuit is basically a software company in the small business and consumer segments and has never had much of anything to do with staffing (except perhaps selling QuickBooks to small staffing agencies).

And if Intuit is now going to help “self-employeds,” freelancers and independent contractors with their accounting and taxes–that’s all great–but it doesn’t have much to do with what gets does staffing industry.

Right?

Or perhaps not…

In  my opinion, Intuit’s recent moves may be very significant for the staffing industry.  Here’s my rationale:

  • Intuit is a very large, competent firm that has achieved large scale success and leadership positions in a number of enormous market segments, by not only delivering excellent “compliance-related” software products, but also by executing its world class capabilities to build large, powerful digital services ecosystem. Intuit has enormous capabilities too influence the development of underserved markets and fragmented industry segments.
  • By proceeding quickly with three high-visibility partnerships (Stripe, HourlyNerd, and UBER), Intuit has clearly signaled its intentions that what it is doing is not just a product extension to pick off an adjacent or growing market segment (self-employed).  It appears to be initiating a major, strategic ecosystem play, which will allow Intuit to begin to fill in compliance and other gaps that are present in the relationships among self-employed/freelance/independent workers, online work arrangement intermediation platforms, government agencies (like tax authorities), and client businesses.  In effect, in the fragmented, informal “freelance economy” and a growing workforce ranging from gig workers to independent professionals, Intuit has the potential to become “the legitimator” and the “ecosystem keystone.”
  • In so doing, Intuit has the potential to catalyze, lead, and  accelerate the development of a legitimate, functional digital services ecosystem that will make the self-employed, freelance/independent workers more of a viable option for businesses small and large.  While this may not be a stated aim of Intuit, its support of the development of an ecosystem that enables the functioning and legitimacy of self-employed, freelance/independent workers, will support the same outcome.  Moreover, as Intuit indicates its interest in supporting  online platform-based, “on-demand” types of work arrangements, it will also be supporting the legitimization and potential acceptance of these kinds of work arrangements by businesses small and large.
  • Should this occur–even if the aim of Intuit and the ecosystem is to only intermediate these new kinds of work arrangements and not seek to take market share in traditional staffing work arrangements–there are two issues for the staffing industry:  (1) Is the staffing industry going concede the new, large future market of new kinds of work arrangements that are intermediated in non-traditional ways through a digital services ecosystem? (2) Will the advent of whole new digital services ecosystem to intermediate non-traditional work arrangements lead customers and workers to require the application of the same technologies and processes to traditional staffing arrangements, thus undermining the acceptance of those traditional models?  In any case, in all of these scenarios, there is a potential significant impact on the staffing industry.

Final thoughts…

At present, we truthfully only have a small number of signals about Intuit’s actions, plans, and intentions, so we can’t predict in any real, meaningful way where all of this will lead to.  But we can develop some potential scenarios and examine what they might mean.

Intuit’s moves may never have anything to do with the staffing industry, but we can take up the perspective of the staffing industry and ask what Intuit’s moves might signify and how they might play out.

The scenarios that emerged here are based on the belief that Intuit could accelerate the development of a functioning, legitimate digital services ecosystem that would enable businesses to quickly and efficiently access self-employed, freelancer/independent workers on routine base, without the problems that businesses face today.  If this did unfold in this way, then the vulnerabilities of staffing industry players–which we discussed (above) as limited for now–might become more serious and faster than previously expected.  How much faster is hard to predict.  How much more serious would depend and could be set out in a number of scenarios (examples:  stable bifurcation of business sourcing patterns for traditional staffing and new self-employed work arrangements, eventual disruption of traditional staffing models as new models, processes, methods come to be seen as superior, and finally an eventual  strategic envelopment of the traditional staffing industry by the new digital services ecosystem).

In the end, we are not only left gaming out scenarios and putting our imaginations into overdrive.  Rather we can look analytically at the structure of and the trends and development playing out in the staffing industry and the broader contingent workforce population and the work arrangement intermediation space today, and trying to follow them out.

In doing this, I came to the conclusion that the Intuit’s recent  moves could signal–not some sudden, never-before-imagined innovation–rather the acceleration of clear trends already in motion and which are relevant to and raise key questions and issues for staffing businesses today.

——————————————————————————–

*  Interestingly, many of the staffing companies that have grown to be very large (Adecco, Randstad, Manpower, et al) have extended their staffing agency businesses to adjacencies in the staffing supply chain (VMS, MSP, etc.) and thus are major stakeholders across this whole vertical supply chain with vested interests in it continuing to function as-is. ** Even in the fastest VMS cases it may take some days for a client business to engage a temp  worker through a staffing supplier, and the cost of supplying one usually precludes staffing agencies from being able to profitably fulfill short interval assignments

** Even in the fastest VMS cases it may take some days for a client business to engage a temp  worker through a staffing supplier, and the cost of supplying one usually precludes staffing agencies from being able to profitably fulfill short interval assignments.

*** We have become so mesmerized by the amazing achievements of platform model businesses, starting with Amazon.com, that we have lost sight of the fact that comprehensive platforms are really just “harnessed manifestations” of powerful underlying technologies, designed and harnessed in a way that allows for different populations of agents (buyers, sellers, businesses, workers, etc.) to engage in economic activity, often in novel ways.  So these “harnessed manifestations” of this torrent of technologies can come in many forms and scopes and sixes and have very different (comprehensive or specialized) foci in terms of what business activity they address.  In the online work arrangement intermediation platform space, we are accustomed to seeing comprehensive platforms that aim to do it all.  However, we are also seeing the emergence of more specialized platforms focusing on important parts of the whole work arrangement intermediation process. One area where this has been true has been the critical process of paying freelance/independent workers (see:  Mobbr, TiempoTaskzilla, et al ).  Such technology applications/specialized platforms could conceivably evolve into more comprehensive platforms or become critical complementors of other platforms or members of digital services ecosystems.

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High-impact Talent and Mature Organizations: A-players, Creatives, and Innovators

66389_1405765063846_2728478_nI recently came across three articles that caused me to think about “high-impact talent” in “mature organizations.” Each addressed a different type of potential, high-impact talent in mature organizations:  A-players, Creatives, and Innovators.  All three types might potentially play a role in bringing about successful transformation in mature organizations and businesses.

I began to wonder which of the three types might represent the most significant “high-impact” type of talent in a mature organization. While perhaps the scarcest resource, it seems Innovators might be the most generative, impactful type.

Mature Organizations

By mature organizations, I mean those that have reached a tipping point between sustainability and obsolescence, due to changing environmental conditions and lagging adaptation.  Mature organizations are by definition “set in their ways” — not necessarily in an absolute sense, but in terms of strong ingrained inertial biases.  Mature organizations exhibit this behavior, whether their successfulness still seems solid (despite gathering changes that have not been internalized) or whether they are starting to show signs of breakdown and there is some internal awareness that changes or major transformation is needed.  In effect, mature organizations have inertial tendency to keep doing what they are doing in the way they have been doing it–sometimes even when there are rising pockets of awareness of the need for change and some desire to see it happen.

High-Impact Talent in Mature Organizations

By high-impact talent in this context, I mean types of talent, integral to the organization, that can consistently influence or generate significant changes in thought and practice and thus contribute substantially to initiating a global process of positive, adaptive transformation in a mature organization.

Types of High-Impact Talent

A-Players (as covered in a recent HBR article, “The Behaviors that Define A-Players“), are probably the most beloved type of high-impact talent for mature organizations. A-players “walk on water,” and they are the real “workhorses” of the mature organization.  They produce more than anyone else, are most reliable, have transparent souls, “play well with others,” “support the mission,” and are adaptive to some amount of change (they can roll with normal organizational turbulence, or not allow it to distract, and they can be counted on to follow marching orders/take on the new assignments leadership deems important). “A-players” may be agents of incremental changes within accepted boundaries, Their value to mature organizations is to keep things afloat and be ready and willing to make a change in direction when leadership makes a path or at least the destination clear.

Creatives, a truly hard-to-define type, were recently called out in “Help Wanted–We Need a Little Help Here, People” an article by Geoffrey Moore, the author of Crossing The Chasm.  Creatives, as I see it, are those out-of-the-mainstream, cerebral types of people who routinely are thinking about things differently, come up with startlingly fresh ideas, and have a superior skill at expressing them in appealing, interesting ways.  They tend to be clustered in certain jobs that range from artistic to technical (with plenty in the middle, including marketing, et al). In many ways, they are thought of as free spirits, sporadic in performance (quite different from A-Players), and perhaps as “less important” in the managerial mindset of a mature organization.  However, Moore tries to argue that Creatives are critically needed in mature organizations…

to extend the useful life of an established franchise. Customers have committed to this enterprise and, all other things being equal, would prefer not to switch, since switching is disruptive to them and takes attention away from where it could be better spent. Moreover, there is a whole ecosystem of partners who make their living supporting the franchise, provided it can stay relevant, and they certainly don’t want to see it go away. Most importantly, the franchise itself operates at scale, which means, unlike even the coolest of start-ups, it can have a sustainable impact on a global basis today… The world needs technology, and it needs it to operate at scale. Yes, we can always invent something better, and we should. But we also need to be better stewards of what we have already built. That requires us to take risk and breaking with established conventions, and that in turn is what requires the engagement of creative talent.

Of course, Moore’s argument, that Creatives are needed in mature organizations, reveals their apparent absence (and a possible antipathy between mature organizations and Creative types).  Many of the comments posted in response to Moore’s article reveal doubts about whether (despite Moore’s well-intended prescriptions) mature organizations and Creatives really can mix blissfully and productively.  One commenter, Andy Reischer, Co Founder, RJabber, stated bluntly: “Creative people can do amazing things, but by their very nature are disruptive, unpredictable, and difficult to manage. They quickly learn to avoid the enterprise where they are not welcome. If you want them to work on your problems, then you have to embrace them.”  It seems real Creatives are a “breed-apart” that require a special kind of habitat. They may not thrive happily in mature enterprises where they and their contributions may not be well understood or fully appreciated.  And while they can have very significant impacts in mature enterprises, those events are usually specific and sporadic (e.g., a branding coup, a spectacular UX feature, etc.). It’s perhaps not surprising that creatives are often parts of agencies or are freelancers.  So while business expert Geoffrey Moore makes the prescriptive claim that Creatives should be “high-impact talent” in mature organizations, how things really are seems to be more complex.  It is not even clear that for most mature organizations Creatives are considered high-impact talent.  When rank-ordered against A-Players, A-Players will survive the cut any day (unless that specific Creative talent is engaged in what is currently a critical project). Creative talent that tend to remain for long periods in mature organizations do so not because of their superior creativity, but because they are low cost producers of quasi-creative outputs that support business-as-usual. Real top-performing Creatives will be engaged occasionally when their services are needed to achieve a certain result, but they are not viewed, internal to an organization, as integral agents of or participants in change. Indeed, Creatives may only rarely qualify as high impact talent in mature organizations according to our definition.

Innovators are perhaps the least visible and scarcest, but the most significant and needed type of high impact talent for mature organizations.  While A-Players and Creatives are well-known types of talent to management in mature businesses (though not equally recognized as “high impact”), Innovators as a talent type are not typically a part of the management consciousness (neither thought of in terms of roles that are critical to the ongoing success of the organization nor, as noted below, bright blips on the talent acquisition or talent management radar of HR).  Despite their importance, one could almost say Innovators might “not compute” for mature organizations.  However, an excellent article, “The Innovator’s DNA–Do organizations have the talent in place to drive competitive advantage?” recently published in Talent Management magazine drew on research published in 2012 by member-based research and advisory firm Corporate Executive Board Co., or CEB and  goes a long way in explaining what Innovators are, why they are important, and how organizations should address them. Here are some curated excerpts from the article:

Innovators are scarce:

Innovative Industries Based on these behaviors and 2012 analysis of 2.7 million people in CEB’s global talent database, only 1 in 17 — or 5.9 percent — of graduates, professionals and managers globally have the needed set of competencies to be a true innovator. ……

Out of 17 sectors, the technology industry is able to attract and acquire the strongest supply of innovator talent. Other industries ranking high on the scale include professional services, food, beverages and tobacco, and retail and consumer goods. The public sector ranks in the middle. Industries with weaker bench strength for innovators include oil and gas, engineering, telecommunications and banking. The issue in these sectors, the research suggests, is that they do not have a clear lens on the people component of innovation and the methods in place to identify those with the talents needed to deliver effective innovation.

Identifying Innovators requires new thinking:

To find true innovators, talent managers need to first know what they are looking for — what are the behaviors that characterize an innovator? Then once they know whom to look for, they need to know where to look for them — is the talent readily available in their location? While these questions are important to all business leaders, human resources and talent management both play an important role in identifying and cultivating the type of talent required to produce innovation. When asked to think of innovations in recent years, many people think of Apple Inc.’s products and its former CEO Steve Jobs — a man who reached iconic status and has been labeled as an innovator. Yet Jobs would have more than likely pointed out that effective innovation calls for more than just coming up with new ideas.

What are Innovators and what they do;

Effective innovators need the intellectual capability to see new possibilities and the analytical skills to interpret and translate market and customer data into specific offerings. They must be able to focus on goals, yet also persist in the face of failures and make quick turns in thinking. They need to be skilled at articulating needs and persuading, influencing and selling ideas to others. It is also critical that they work collaboratively and manage through potential conflict.

Innovation is more than just being creative and intelligent. But what are the talents that mark the true innovator?

CEB conducted research in an attempt to answer that question. Overall, the work points to two key clusters of behavior that drive innovation.

The first, focus and insight, addresses the individual’s ability to bring ideas together and pinpoint important information from disparate data sources. This cluster also emphasizes the importance of a person’s willingness to take calculated risks, persistence to achieve goals and ability to link solutions to clear customer needs.

The second cluster of behaviors focuses on networking and collaboration, which is about more than just how a team collaborates to achieve a shared purpose and outcome. The behaviors in this cluster include listening, consulting and proactively communicating with important stakeholders across a business. CEB research shows that true innovators not only leverage networks effectively to capture information and identify those with insight, resources and influence, but they can also sell their ideas to gain the support and funding they need, as well as work through potential conflict.

 What organizations should do to host innovators:

To drive more innovation, firms should foster a culture of idea creation from the top of the business. Talent management professionals have an important role to play in re-engineering HR recruiting processes and development practices to surface and engage innovation potential in the workforce. To do this, they should focus on three vital contributions. First, it’s critical that HR teams understand not only the technical skills and knowledge required for a role, but also the behaviors that drive effective innovation — like focus and insight, and the ability to persuade and mobilize internal networks. …. . Second, HR teams need to have a strong knowledge of the bench strength of key “innovator talent.” Knowing where there are innovation gaps and surpluses is critical when acquiring new employees. ….. Third, using talent intelligence to help the broader organization create teams with a blend of innovator talents is significant.

Innovator talents are rare, yet teams who excel at five or more behavioral markers are 50 percent more effective, CEB research suggests. By using talent intelligence, HR teams can build teams of complementary innovator strengths and guide the manager on how to manage across those talents. Doing so will increase the likelihood that the investment and effort placed in innovation will pay off. For many organizations, team mobilization balancing complementary behaviors within teams may be the quickest way to drive innovation. Planning for “innovation teams” allows organizations to get immediate returns from mixing and matching capabilities, even as they embark on longer-to-pay-off efforts to hire and build innovation skills. As companies around the world seek to adapt, evolve and grow with fewer resources, the ability to innovate is imperative. Getting the people part of the innovation equation right is a critical factor in determining whether organizations innovate successfully or not. It’s not surprising that true innovators are less common than most companies realize. Organizations need to look at their workforce through the right lens, factoring in the rounded skills and behavioral traits necessary to deliver innovation in today’s business environment.

[Once again, the full article can be read at “The Innovator’s DNA–Do organizations have the talent in place to drive competitive advantage?” ]

While the “Innovator’s DNA” article does not specifically address mature organizations, it is not difficult to come to the understanding that the findings are entirely relevant — perhaps carrying a greater urgency –especially for mature organizations. In these organizations, the Innovator type of talent probably has the highest impact on generating change and initiating transformation necessary to the continued success and perhaps survival of a mature organization.

While optimal balance of Innovators and A-players may be one where there are more A-players than Innovators, it is crucial for management — well acquainted with A-Players — to not over look the necessary ingredient of Innovators in the organizational mix.

Managers in mature organizations are very capable of identifying, nurturing, and retaining A-Player types of talent.  But they need to come to understand the critical role of Innovator types of talent and the impact they can have on change and transformation necessary to the future success of the organization.  They must also create a culture and develop the competencies across the organization to understand the Innovator type of talent, be able to identify and recruit that talent, and to adjust the culture and practices to integrate that talent into the organization as a recognized critical resource that will drive the organization’s future success.

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Has Social Networking Really Grown Up? Looking Back Ten Years

dbef621e-2602-446c-b156-8c873c5b0af6.jpgEvery new year, analysts, bloggers, and sundry pundits often recount what has happened over the last year or hazard extrapolations for the next year–both typically exercises in intellectual laziness.  In keeping with that tradition of holiday laxity, I thought I would indulge myself in a similar exercise, but with a slight twist.

Social networks are now commonplace and have become a fundamental part of the fabric of our social, economic, and political life.  They have altered world events and power structures and are raising critical new questions about our identities, about our privacy, and about who owns the rights to our own “personal big data.”

But 10 years ago, in 2004, things were quite a bit different. Social networks were entirely new, and most people either didn’t have the term “social network” in their vocabularies or they were trying to wrap their minds around what they were and what they might be capable of.

Back in the summer of 2004, I was in this second category:  aware of social networks, sensing their importance, but unsure of what to make of them. My response was to organize an evening symposium and moderate an expert panel on the subject at the newly-opened Carnegie Mellon West facility in Mountain View.  A colleague of mine recently reminded me of this, and I was able to dig out the invitation blurb for the event:

Networks of social relationships have always been present as fundamental conduits and organizers of human life (largely as “background mechanisms”). In recent years, new information technology and scientific understanding have begun to enable, enhance, and proliferate “social networks” in new forms and in different areas of private and public life. Both “for-profit” and “non-profit” entities are now leveraging new social network technology and theory to create and deploy innovative “social networks” in the domains of social interaction, commercial activity, and political/civic engagement. We are only beginning to understand the changes that may be in store for us in how we relate and interact socially as private individuals, how we pursue our commercial and professional interests as business people, and how we exercise our rights and prerogatives as citizens. Join our panel of experts for a discussion of this exciting new phenomenon and its potential implications as a disruptive and/or integrative force in the social, commercial, and political/civic spheres. Panel: Ben Smith, Founder/CEO, Spoke Software, Inc. MBA, 1993, Tepper School Danah Boyd, PhD Candidate, SIMS/Social Networks, UC Berkeley Mark Pincus, CEO/Founder, Tribe.net Reid Hoffman, CEO/Founder, Linked-in, Inc. Steven Herzberg, Chairman/Founder, Votewatch Moderator: Andrew Karpie, MS, 1984, Heinz School Date/Time: Thursday – July 22, 2004 – 6:30-8:30PM Location: Carnegie-Mellon West Campus – NASA Ames, Mountain View Free to CMU alumni, faculty and students; $5.00 contribution required for non-CMU guests. 

In 2004, Mark Zuckerberg had just launched the Harvard version of Facebook out of his dorm room, but was not on anyone’s radar.  Reid Hoffman had launched professional network LinkedIn in competition with Spoke launched by Ben Smith.  The most popular social networks were those like Myspace or like Tribe launched by Marc Pincus. At this time, the commercial application of social networks was unclear and surrounded by skepticism (LinkedIn had not yet launched any talent management offerings), and the application of social networks in the domain of politics was truly difficult to imagine.

In 2004, social networks were–to most who even knew about them–not much more than novelties, social hang-outs for hipsters, maybe ways of keeping connected with colleagues (vCard–created by big businesses in 1996–was also popular then, but never caught on).  Naturally, the conclusions drawn by the panel in the symposium were much more optimistic about the future role of social networking in society.

Now, just 10 years later, it’s hard to even think about our world and lives without including some key  aspects that have been touched, changed, transformed by so-called “social.”  The impact of social networks has turned out to be both “integrative” and “disruptive” to an extent and  scale that would have exceeded even perhaps all but the most visionary views of that time.

And now in 2014, the “social revolution,” no longer in its infancy, is probably no further along than adolescence–a long way from maturity. Interestingly, even now ten years later, “social” (like an adolescent) is still in what anthropologists would call a “liminal” phase.  It is still hard to grasp and define what it really is, what its boundaries are, how it fits into to everything else or how it might in the future.  Mobile and online marketplaces, for example, are technology-based phenomenon that are much easier to delineate. But “social”–perhaps because of what it is–the nexus of the complexity of dynamic human relationships–remains elusive in this respect.

From my standpoint, I feel like I can suggest neither definitions not prognostications.  To me, “social” is as elusive as ever.  In 2004, the idea of “social networks” was emerging (distinct online platforms in which social graph theory was being applied to join people); but now in 2014 we have the unbounded concept of “social” which seems to permeate potentially anything (social commerce, social recruiting, etc.).  “Social” has shifted from being a “technological thing” to becoming an established dimension of how the world works.  Accordingly I find I have as little an idea now as I did in 2004 about the future evolution and impacts of “social.”  And I find this strange, uncanny.

It makes me wonder, with all of the current discussion about the emergence of AI and (according to Stephen Hawkings) its dangers, about the coming superiority of computer-based cognition, about Ray Kurzweil’s questionable “remix” of the term “singularity,” etc., what kind of world we have entered into in the first part of the 21st Century.

As a school boy in the latter half of the 20th Century, I remember watching Walter Cronkite narrate the weekly show entitled “The 21st Century,” which portrayed the coming 21st Century as a period when “Man” would wield his powerful tools of science and technology to conquer new frontiers and solve many of the world’s problems (which indeed has been happening in significant ways). But technology in the 21st century has turned out to be much different:  it has much more to do with information that we expected, and it turns out that it has rapidly entered into an unexpected “intimacy” with humans (which can arouse feelings of comfort and empowerment, ambivalence, or discomfort and concern OR all three together).

“Social” is perhaps the first application of technology that has crossed the line from technology being a “tool” that we grasp and command to technology being something more like an “intimate companion.”  So perhaps the reason the technological phenomenon of “social” is so difficult to grasp, “get a handle on,” define, predict, etc. is precisely because of the “intimate” nature of our relationship to it (the distance between the once “objective” tool and ourselves has disappeared–ironically, we have no “social distance” with “social” technology). And in the greater scheme of things, perhaps this experience with “social” technology was the first sign of a more fundamental shift in the relationship  between humans and technology in the 21st century.

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Video of the December 2014 Online Staffing/Human Cloud Platform Meet-up Event (Hosted by Elance-oDesk, Video by CXC Global)

download (1)Sometimes it’s just necessary to build new bridges — for example, between people who need to have work done and other people who want to provide that work.  “Online staffing and other human cloud platforms” are about building those bridges.  And many of those new bridges, connecting people and work, are being built right here in San Francisco.

“Spotlight on the SF Online Work Platform Epicenter” was held on December 9th 2014 – featuring these SF-based leading online work platform companies (reverse alpha order) and speakers:

Visual.ly  –  CEO, Matt CooperScreenshot_34
Task Rabbit – VP Operations,  Ian Arthurs
Gigwalk –  CTO, Matt Crampton
E-O – Director Enterprise Marketing, Lauren Schulte
CrowdFlower — Founder/CEO, Lucas Biewald

CLICK HERE – WATCH THE FULL SESSION VIDEO NOW

The focus of this MeetUp and the speakers was to highlight the diverse SF Bay Area community of Online Work Platform companies. In terms of numbers of companies and diversity of innovators, the SF Bay Area is clearly the global epicenter for this new, expanding space. We gathered a great set of speakers (from a representative sample of work platform companies) who each in turn spoke briefly about the journey of their businesses to date, where they are today, and what they think lies ahead–followed by discussion/Q&A.

CLICK HERE – WATCH THE FULL SESSION VIDEO NOW

 

 

 

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My slant on “How You Can Prepare For The Future Of Work Today” – Forbes interview of SAP’s Mike Ettling

Forbes author Dan Schawbel recently interviewed Mike Ettling, the President, HR Line of Business, for SAP/SucessFactors, published in the article: “Mike Ettling: How You Can Prepare For The Future Of Work Today?” 

The following excerpts were my favorite/curated Ettling quotes:

To me, the future of work is going to be a highly diverse workforce, looking for flexibility and an environment that encourages and supports collaboration, where lifelong learners can all be teachers and students at the same time. Already we also see companies are relying much more heavily on contingent workers and specialists. By identifying and better understanding workforce realities, we can be much more specific in how we can help HR get beyond our current challenges and meet the future head on.”

“Companies need the resources to really change their cultures and promote continuous learning, where everyone is both a student and a teacher. It starts at the top – executives need to understand that developing talent doesn’t have to mean bringing in people from outside the organization: give people easy access to learning resources, from anywhere; provide a social platform for collaborative learning and development; give people programs where they can track their progress; and allow people to take advantage of the MOOC model that’s started to change our higher education system. That’s how skills should be developed to address the needs of both leadership and employees based on what they are saying and what we are seeing.”

“We view the incredible growth of the contingent workforce – that is, anyone not on the full-time payroll – to be the single largest workforce transformation happening today. This is because the contingent workforce goes beyond just freelancers; it encompasses agencies, contractors, seasonal help in retail, and part-time developers of large technology projects. It’s advantageous to companies because they can staff up or down to address real-time needs, and they have access to specialists for specific projects. From an economic perspective, it makes companies more competitive and profitable. … From an employee perspective, one impact we cannot ignore is benefits. As more workers become contingents, additional safety nets will have to be developed to make sure they receive comparable benefits to traditional employees. Contingent workers are over one third of the total workforce population – that’s millions of people. Their impact cannot be ignored and the benefits will eventually catch up to their influence. On the flip side, this type of fluid work allows people to develop new skills, become experts in their communities, and adapt work to their lifestyles, working more or less as they need.”

“We now know that the era of the traditional workforce and the company loyalist is over. It appears that executives have met this trend of shorter job tenures by placing more value in employee loyalty. However, rather than placing more emphasis on length of employment alone, leaders must listen to their employees’ needs and desires – competitive compensation, suitable benefits, training, mentorship, etc. – and work to develop a mutually beneficial relationship. Leaders who take the necessary steps to encourage loyalty will find themselves surrounded by employees dedicated to them and the company’s success.”

My observation:  All of this is spot on.  However, a conclusion that was not drawn out explicitly is that the loyalty bond will need to be extended not just to “permanent full-time employees” (even when permanent means “tours of duty”), but to contingent, independent workers as well.  “Degree of affiliation” is the term I find myself using more often…  How persistent, bi-laterally value-creating, mutually accommodating,  trusting and transparent, richly communicative, etc.. is the relationship between an organization and a worker?  All of these components of positive vs. negative “affiliation” (or loyalty vs. disloyalty) can exist across all kinds of work arrangements and labor contracts (whether at-will employment contract, seasonal or part-time employment contract, or independent contract agreement/SOW, etc.).  But whatever you want to call it, and however you conceptualize, it’s something that organizations will also have to achieve with a workforce that is in part independent and on-the-move, contingent.

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ONLINE WORK ARRANGEMENT PLATFORMS — HOW THEY ARE CHANGING THE WAY CONTINGENT WORKFORCE IS SOURCED, ENGAGED, AND MANAGED

OWAPI realized I had never published the slides from my presentation at HR.com Talent Acquisition  Forum (San Francisco-January 27, 2014), even though they provided a nice simple encapsulation of how platforms are transforming contingent work arrangements. 

Seemed like the information is still months later. For those interested, please find the slides in a pdf by clicking here:  2014 HRCOM Pres

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The FMS (Freelancer Management System): What Is It? And Why Now?

Screenshot_27This white paper, which I wrote for OnForce in early 2014, provides an overview of the emerging type of solution that will allow organizations to support an increasingly independent, digitally networked, and plug-n-play workforce that is becoming a critical part of the new  “total talent management, “blended/extended workforce” world.

The white paper can be accessed at this link: Freelancer_Management_Whitepaper_2014.pdf    (click this link, then scroll down).

Note:  OnForce uses the term FMS or Freelancer Management System to describe this kind of solution, and the term has also been used by other providers.   I have recently begun to use an alternative term IWMS (Independent Workforce Management Solution), preferring to avoid the term “freelancer” and its various connotations.  However, in any case, we are all referring to the same set of developments.

 

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My recent SIA research report on “Crowdsourcing” types of platforms

Crowdsourcing-Platforms_mediumMy recent research report, “Crowdsourcing Platforms — Mapping the Advanced Frontier of the Human Cloud Platform Landscape,” was published at Staffing Industry Analysts (SIA). The report describes attributes and cites examples of these platforms and also identifies the characteristics and dimensions of the segment space.

Summary/Excerpt from the Report Introduction follows here:

“Crowdsourcing” has become a widely used term with a wide range of meanings. For our purposes, it refers to an online platform-based process of inviting and engaging numerous paid online workers from a dispersed, often massive, labor population to each perform a quite narrowly defined/scoped unit of work, which, when collected and processed further by the platform, will lead to an expected value added outcome for the client.

Within the SIA Human Cloud platform lexicon, Crowdsourcing represents a group of platforms that, although sometimes having some shared characteristics, are fairly distinct from Online Staffing and Online Services platforms. They also seem to represent some of the most innovative models for organizing certain kinds of work and workers on a contingent basis, with technology continuing to press on the frontier of what can be done.

Being on the edge of innovation, Crowdsourcing platforms exhibit considerable variation, but for now seem to separate into two main models which we have defined as Distributed Microtask Processing Platforms and Challenge/Contest Platforms.

Still experimental and evolving, Crowdsourcing platforms represent extreme forms of innovation in how contingent workers can be engaged and work can be done.  There is definitely a place for these kinds of platforms in the globally networked, 21st Century, information-based/service economy, although it is difficult to predict the extent and form it might take. For the near term, we expect the Crowdsourcing segment to continue on a steady, but not explosive, path of investment, innovation, and growth.

This report is available to SIA members at http://www.staffingindustry.com/site_member/Research-Publications/Research-Topics/Region-Europe/Crowdsourcing-Platforms

 

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Independence Day? Uber, ICs, and the Two-Sides of 21st Century “Online Work Arrangement Platforms” (SIA blog post)

carJuly 4, 2014.  It’s Independence Day here in the U.S., so coincidentally a very convenient context for writing this post about work, laws, independence, and the protection of rights of diverging stakeholders in our society and economy.

For those of us who have been studying 21st century “online work arrangement intermediation platforms” (Online Staffing, Crowdsourcing, Online Services platforms, etc.), there has been no doubt that two-sided “car ride” platform businesses like Uber and Lyft are in fact a kind of “work arrangement intermediation platform” like the various online labor platforms we have been calling attention to (for example, 2014 Online Staffing Platform Landscape: Can More Be Better? ). “Online work arrangement intermediation platforms” are simply digital platforms that enable the arrangement of work engagements/episodes between buyers and suppliers of labor services—but there are many dimensions to a “work arrangement,” including (as we know in the staffing industry) if and how existing laws may apply.

Two-sided online/digital platform businesses did not really exist before the internet, so we are still trying (often struggling) to figure out how existing laws apply to these platforms and what new laws may be needed (“data privacy” and “data ownership” are good examples of where legal chasms have opened up in the platform world). In fact, online/digital platform business models tend to introduce new, unprecedented ways of doing things that not only challenge and change traditional industry business practices, but also can directly or subtly challenge legal and regulatory concepts and frameworks potentially leading to the court actions and/or changes in government policy. Such business and legal turbulence is certainly present around changing work arrangements, where there is a thicket of existing state and federal laws and regulations and diverging economic stakeholder interests.

Follow this link to continue reading the blog post at SIA.

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Hot and Cool: The Next Online Staffing/Human Cloud Meet-Up: Eve, June 25th, San Francisco

PairsThis will be the last MeetUp for the summer months.  We have a great panel, a great host and venue, and really relevant theme.  As usual, reception and networking will be from 5:30-6:30PM, with panel discussion from 6:30-7:30PM.  To join us, follow this link.

The panel discussion/theme planned:  How “digital technology and platforms” are changing the way “knowledge work/expertise-based work” can be organized across businesses and knowledge workers.  Many implications across the expanding knowledge economy–new kinds of knowledge work as well as traditional knowledge work, like medicine and law, etc.

The panel is currently taking shape as follows:

• Debbie Cohen, VP, Chief of People at Mozilla Corporation

• Jennings Staley, M.D., Founder and CEO of Freelance Physician

• Susan Stucky, PhD, Researcher of structure of work;  former IBM Research/Almaden

• Sugath Warnakulasuriya, PhD,  Co-Founder and former CEO of 10EQS; former EDS/HP, McKinsey

BTW, prior MeetUp videos can be seen here: https://www.youtube.com/channel/UCaWauBOWWYaAte5RbdFQGcg

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Will Chinese “witkey” online labor services platforms expand beyond China?

witkeySome time ago, I highlighted some other research on this subject of “witkey” platforms, which parallel the emerging online labor platforms (like Elance-oDesk, freelancer.com, et al) outside of China. The platforms in China appear to be very fast-growing, but transparency can sometimes be a challenge.

I recently captured some data from the China website of the largest witkey platform Zhubajie (Pig Network), which asserted these claims about the platform’s transactional dimensions (presumably over the past year and since getting started):

Pignet2

Screenshot_22

The “Reward Amount” of 1.6B Yuan (apparently over the past year) would be about 100M dollars.

In the world of online labor services platforms, there is almost a complete split in coverage between China and the rest of the world.  China’s witkey platforms remain almost completely insular within China. Alexa web traffic data (number of site visitors) show that while 94% of the Zhubajie platform’s traffic originates in China (only 6 % outside of China), the China-originating traffic of the Elance and oDesk platforms is less than 1%.  Remember:  that is all traffic, both buyers and sellers of labor service.

An Aalto University student, Weimu You, has recently published a Masters thesis, which is now available online and can be found through this link: “The business model and foreign market entry model choice of crowdsourcing service providers: a case study of a multinational witkey service provider.”  Information Systems Science, Master’s thesis. Weimu You, 2014.  Though anonymized, You’s case study seems to me to be based on Zhubajie, which has been attempting to expand beyond its insular China market.  One of the tactics, according to one of the interviews in the study, is to leverage the very high number of Chinese bi-lingual college students attending universities in the US and Canada as a way to connect the platform into these English speaking markets.

In my own interview of a Zhubajie executive last year, I heard a bit about some novel–and I have to say, innovative, impressive–ideas for how the platform could generate North America-to-China traffic and transactions.

There does appear to be some vision there.  IDG Venture Partners apparently invested at least $10M in Zhubajie in 2011, and there were murmurs of an IPO in 3 years (a forecast deferred in 2013 by the company for another 2-3 years). Since my own 2013 conversations, I haven’t seen any kind of evidence of expansion in North America or heard any news about Zhubajie developments.  But Zhubajie traffic originating in the US now stands at 1.3% of the platform’s total traffic (the largest non-China origination zone).

How long will it take for witkey platforms to expand significantly beyond China, and how will they do it?  That is the question that student Weimu You has been correctly considering.

 

 

 

 

 

 

 

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Video of Panel Discussion, “The Free Agent Enterprise” – 4/28, Online Staffing/Human Cloud MeetUp

Zf4oWBBakQJp1thsXzunITl72eJkfbmt4t8yenImKBXEejxNn4ZJNZ2ss5Ku7CxtOn April 28, 2014, we held the fourth Online Staffing/Human Cloud Platforms MeetUp event, generously hosted by Akraya, Inc. in Sunnyvale, CA.

The video of the informative panel discussion can be viewed here.

The Panel:

• Peter Cannone: CEO at OnForce

• Matt Cooper: Vice President, Enterprise Services at Elance-oDesk

• Steve King: Partner at Emergent Research

• Kelley Steven-Waiss:  Senior Vice President, Worldwide Human  Resources at Extreme Networks

——————————————————-

Subject: “The Coming Convergence of Technology/Online Work Platforms,  “Soft-boundary” Organizations/Enterprises, and an Expanding Freelance/Independent Workforce”

The realization of the “permanent employee” economy (of the industrial scale firm) seemed to have peaked some time in the late 20th century. Over the past 20 years, information technology–and over the past 10 years or so, online platforms–have increasingly entered into the intermediation of work arrangements, potentially enabling more dynamic, transparent, fluid and flexible labor markets. As technology makes new kinds of work arrangements possible, organizations and workforce (within prevailing legal, tax, and institutional/normative structures) are in the process of testing, adapting, adopting new ways to arrange and get work done.

That is where we are in 2014.  There have always been–especially in certain labor market segments–freelancers, independent workers and contractors performing work for organizations, but they tended to be considered “ancillary” to the “permanent employee” workforce and labor economy.  But now, shorter, more variable, more specialized work arrangements are being seen as being fundamentally important for organizations–and more and more workers are at least beginning to seek to adapt to and  embrace the idea of freelance/independent careers.  Technology is both a key catalyst and driver in this evolution

Our panel will represent different facets of the coming convergence of technology/platforms, evolving organizations/enterprises, and changing workforce.  We will be discussing the current state of developments in how technology/online platforms can support variable, shorter, more specialized work arrangements between  organizations/enterprises and freelancer/independent workers.  We will also discuss how this might evolve in coming years and where it might take us.

Once again, the video of the informative panel discussion can be viewed here.

The Online Staffing/Human Cloud Platform MeetUp site can be accessed here.

 

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“T2T (Task-to-Talent): How Technology is Driving a New Contingent Work Arrangement Paradigm” (White Paper)

T2TI recently was commissioned by OnForce to write a white paper on the subject the of “short-assignment/limited task” work engagements and technology/online work platforms. The white paper entitled “T2T (Task-to-Talent):  How Technology is Driving a New Contingent Work Arrangement Paradigm” can be read here Task-to-Talent-WhitePaper.

The trend toward more and more contingent work arrangements seems to be established as a way of doing business.  Along side current modes of arranging and managing contingent work (a work arrangement paradigm I call Personnel Staffing–delivering talented/skilled persons to the work), now cumulative communication and information technology (CIT) is enabling a new way of arranging work in shorter intervals.   It is now possible to execute a single contingent work arrangement (paid) transaction that is performed in matter of seconds (a very thought provoking observation).

This is a complex phenomenon, the surface of which is only scratched in this white paper.  What is clear, however, is that “short/assignment/limited task,” specialized work engagements are increasing as they are transacted across an increasing number and types of “online work arrangement intermediation platforms.”  As these engagements continue to proliferate as standard ways of getting work done, I suggest that we are seeing the emergence of new “contingent work arrangement paradigm” along side the now established Personnel Staffing paradigm.

The introduction of the white paper is repeated here:

Today, in 2014, we seem to be crossing a threshold into a new world of work and work arrangements. This does not, by any means, signify the end of longer term employment of workers by organizations, but it does seem to mean that organizations and workers will be exploring and engaging in new kinds of work arrangements.

There are drivers on both the demand and supply sides of the labor market leading to an increase in “contingent” work arrangements that involve specific work performed over a limited interval. Contingent (non-employment) work arrangements (between organizations and agency temps, consultants, contractors, freelancers, etc.) are not new, but they are becoming more pervasive in more organizations and industries across the economy. They are also evolving and technology is playing an increasingly significant role in all of this.

In the past few decades, technology applications have had major influence on organizations’ acquisition and management of employees and, mostly in the last decade, on contingent workforce supply chain management, which enables controlled procurement and consumption of various kinds of contingent workers. However, almost all contingent work arrangements handled through managed services providers (MSPs) and system tools (VMS) have applied to agency temps who are engaged over intervals ranging from about a week to months at a time.

Certainly, organizations have long been engaging non-employee workers for more specific and much shorter-interval activities. However, this has almost always been occurring in time-consuming, ad hoc ways, without established intermediate systems that enable efficient and cost-effective control over this type of work engagement. But in today’s dynamic, digitally driven economy, some organizations are discovering technology that delivers higher levels of efficiency, agility, and performance, giving them a strategic advantage in executing and managing smaller units of work performed by non-employee workers.

We are seeing the emergence of a new work arrangement paradigm based on digital work arrangement intermediation platforms that enable populations of qualified workers to perform shorter, more specialized activities on a larger scale than can be accomplished today. This “work arrangement paradigm” we are calling “Task-to-Talent” (or “T2T”).

The white paper can be accessed here: Task-to-Talent-WhitePaper.

 

 

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“The Free-Agent Enterprise?” Next MeetUp Eve of April 28th Sunnyvale, CA

faeOn the evening of April 18th, we’ll be holding the next MeetUp of the SF Bay Area Online Staffing/Human Cloud Platform Group.  We have a fantastic program and panel lined up (more details below). To register and join us, follow this link.

If you want to have an idea of what these Meet-Ups are like, watch this video.

Details of the 4/28 are as follows:

Summary:

This MeetUp panel will discuss the current state and future of freelance/independent workforce,  online work platforms, and how enterprises will get work done.  See more details below.

Panel:

• Peter Cannone: CEO at OnForce

• Matt Cooper: VP, Enterprise & International at Elance/oDesk

• Steve King: Partner at Emergent Research

• Kelley Steven-Waiss:  Senior Vice President, Worldwide Human  Resources at Extreme Networks

——————————————————-

Subject: “The Coming Convergence of Technology/Online Work Platforms,  “Soft-boundary” Organizations/Enterprises, and an Expanding Freelance/Independent Workforce”

The realization of the “permanent employee” economy (of the industrial scale firm) seemed to have peaked some time in the late 20th century. Over the past 20 years, information technology–and over the past 10 years or so, online platforms–have increasingly entered into the intermediation of work arrangements, potentially enabling more dynamic, transparent, fluid and flexible labor markets. As technology makes new kinds of work arrangements possible, organizations and workforce (within prevailing legal, tax, and institutional/normative structures) are in the process of testing, adapting, adopting new ways to arrange and get work done.

That is where we are in 2014.  There have always been–especially in certain labor market segments–freelancers, independent workers and contractors performing work for organizations, but they tended to be considered “ancillary” to the “permanent employee” workforce and labor economy.  But now, shorter, more variable, more specialized work arrangements are being seen as being fundamentally important for organizations–and more and more workers are at least beginning to seek to adapt to and  embrace the idea of freelance/independent careers.  Technology is both a key catalyst and driver in this evolution

Our panel will represent different facets of the coming convergence of technology/platforms, evolving organizations/enterprises, and changing workforce.  We will be discussing the current state of developments in how technology/online platforms can support variable, shorter, more specialized work arrangements between  organizations/enterprises and freelancer/independent workers.  We will also discuss how this might evolve in coming years and where it might take us.

 

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Overview Video- Now Avaliable (1/14 Bay Area Online Staffing/Human Cloud MeetUp)

MeetuppicThe overview video of the January 2014 MeetUp is now available. The video documents highlights of the January MeetUp and gives viewers a good idea of what this group’s MeetUps are like.

The MeetUp panel featured Matt Cooper of oDesk, Gene Zaino of MBO Partners, and Jeff Wald of Work Market.  We discussed what is happening in the platform category Online Staffing, what’s developing/changing. and where things are headed.

Another MeetUp on “start-ups” in human cloud platform space was held in March.  It featured a panel of 5 start-up founders/CEOs.  Video footage from this MeetUp will soon be available.

The next MeetUp will be held in Sunnyvale on Monday evening April 28th.  The MeetUp focus will be “The Coming Convergence of Technology/Online Work Platforms,  “Soft-boundary” Organizations/Enterprises, and an Expanding Freelance/Independent Workforce”.  See the MeetUp site and join! http://www.meetup.com/Bay-Area-Online-Staffing-Human-Cloud-Cloud-Labor-Platforms/

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Branching Out – How Four Staffing Firms Are Responding to Online Staffing Platforms (my recent SIA article)

hybridOver the past two years, Staffing Industry Analysts has been studying the emerging phenomenon we have called online staffing — the intermediation of a work arrangement that is performed across an online platform, whether that work arrangement is between a small business and online freelancer (e.g., Elance) or between a larger business and an onsite contractor (e.g., Work Market).

A number of staffing firms are now responding to these platforms, a few of which are highlighted here. In each case, the firms are proving to be early “responders” rather than “adopters,” pursuing various thoughtful strategies and approaches to create unique talent management solutions that coexist within or transform their existing business models and serve clients better.    

Continue Reading Complete Article in Staffing Industry Review

 

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“Making Waves — The StartUps” >> Next Online Staffing/Human Cloud Platform Group Meet-Up: Tues Eve 3/25 in San Francisco Financial District

Screenshot_13When it comes to online work platforms, we have been seeing waves of development and investment.  One of the first major waves may have crested recently with the IPO of freelancer.com and the merger of the two global online freelance platform giants, Elance and oDesk.  But in the past few years, we have seen new waves taking shape as a range of different kinds of start-ups–with different perspectives on and models for addressing the market(s)–have appeared in the space.  And we all know that the biggest wins in new industries often does not come from the “first-movers” but often from the fast (and not-so-fast) followers.

So this MeetUp will focus on some of those companies so that we can hear what they are about, how they are different, what it’s like to be “catching a wave” at this stage of evolution in the space, and what the future of the space looks like to an early-stage entrepreneur.

We have a great panel lined-up, founders of  four young online work platform companies (each with a unique perspective and model):

  • Mattias Guilotte of Coworks
  • Pramod Raheja of MyStaffNow
  • Brendon/Branson Bollinger of PRSONA
  • Jason Chicola of REV
  • Yong Kim of Wonolo

I am looking forward to a very interesting talk with these representatives of new companies pushing further online work platform innovation.

To join the MeetUp Group and/or register for this MeetUp, follow this link.

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Is business intelligence and decision-making still in the dark ages? Where is your business at?

imagesCAJWIFIRA great blog post at MIT Sloan Review (“The Science of Managing Black Swans“) makes one wonder if business intelligence and decision-making are still in the dark ages.   Excellent post suggests what lies ahead in how businesses will be able to analyze their environments (internal and external) to assess long-tail risks (and, I guess, opportunities too!):

EXCERPT FROM POST:

“In his research, Kenett lays out a maturity ladder of risk-management practices:

  1. Intuitive – no formal methods used.
  2. Qualitative – risk assessments are based on expert opinions
  3. Quantitative – some data is collected and used to derive Key Risk Indicators.
  4. Semantic – unstructured data, like logbooks or blogs reflecting user experience, is analyzed.
  5. Integrated – data from various sources is integrated into a coherent risk management system.

“Many organizations are at level 1 or 2,” writes Kenett. “Going up the ladder is both a management and technological challenge.” It’s when organizations are able to combine the third and fourth rungs — a combo of quantitative and semantic data — to get the final rung of data integration that unexpected risk is best managed.

Kenett, who is also chairman and chief executive officer of the data analytics firm KPA Group, suggests that operational risk management is a function of the complexity of the business and the environment in which the business operates. “As a consequence, the more complexity increases, the higher is the need for integrating internal and external data sources, and filtering external data according to internal rules and definitions.”

READ THE FULL POST HERE

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“Engaging the 21st Century Independent Professional Workforce – MBO Partners — Developing a New Work-Arrangement Intermediation Ecosystem”

Screenshot_8I recently did a paper on how MBO Partners is positioning itself to address the 21st century requirements for intermediating “work arrangements” between high skilled, highly paid “independent professionals” and the enterprise organizations that will increasingly require their services.

The paper is well summarized in the MBO blog post, which I have republished part of below.  Follow this link to read the full post, where a download link for the white paper can be found.

Excerpt from post:

This paper covers three main trends:

(1) organizations changing use of labor/talent and evolving work arrangements,

(2) workers’ changing perspectives, needs and preferences, and evolving work arrangements, and

(3) new digital platforms/ecosystems enabling the prior.

In addition, it establishes how MBO Partners is leading the establishment of an innovative engagement enablement platform and a digital-service ecosystem that will meet the growing support needs of independent professionals and the enterprises/other organizations that wish to do business with them.

A work market once largely driven by traditional employer-employee relationships has evolved to include alternative work arrangements. In the mid 20th century, an entire industry sector has emerged to meet the needs of organizations (largely by borrowing the linear industrial age procurement processes) that need to source and procure non-traditional labor, such as temporary and independent workers as well as workers who choose a non-employee work arrangement. This industry sector includes vendor management systems, managed service providers,  Independent Contractor Engagement service providers, temporary staffing suppliers and professional services firms.

Until recently, the contingent workforce has traditionally been viewed with a singular lens with functional systems and solutions largely focused on efficient procurement and management. However, in the 21st Century there is a growing population of highly skilled knowledge workers that deliver their expertise and services to organizations by contract work arrangements. This growing class of independent professionals has illuminated the limitations of traditional engagement methods and has stimulated the development of an emerging digital ecosystem of work arrangement intermediaries to support these limitations.

MBO Partners has been identified as uniquely positioned to be a keystone in this ecosystem, to serve the 21st century population of independent professionals as well as the managers and organizations who need the services of these professionals.

To read the full paper, click here.

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Great event! Online Staffing Platforms–How’s It All Changing?

BfHnz7gCcAA4iNCYesterday evening, the Bay Area Online Staffing and Human Cloud/Cloud Labor Platform MeetUp Group held it’s second MeetUp, hosted generously by oDesk in Redwood City. This event’s panel discussion focused on “online staffing platforms,”  how they are changing, and where they are heading.

I was thrilled to moderate a first-rate panel:  from left to right:  Gene Zaino (MBO Partners), Jeff Wald (Work Market),  Matt Cooper (oDesk), Andrew Karpie (The Research Platform).  With a panel like this, amazing things just happen, new insights get formulated and brought to light.  Fortunately, some video highlights from the session will be available in the coming weeks.  I want to thank the panelists, once again.

We also had another amazingly engaged and very diverse crowd of attendees, professionals from many different related domains and places.

The  Bay Area Online Staffing and Human Cloud/Cloud Labor Platform MeetUp Group was formed late last year as way for professionals with a serious direct interest in online work platforms to meetup, exchange information and ideas, and network.  It is a non-profit, vendor-independent professional affiliation group that now is meeting every 1-2 months in the San Francisco Bay Area.  Membership in this group is restricted those with serious, direct professional interest in the subject.

This MeetUp group also has an online community/LinkedIn group Online Staffing & Human Cloud / Cloud Labor Platforms.  Membership in this group is open.

 

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1/28/2014 Eve, Redwood City, CA– MeetUp: “Online Staffing” In 2014–What’s Changing?

OnlineLaborThis month’s MeetUp will be hosted at the oDesk HQ facility.  Our panel will consist of Gene Zaino of MBO Partners, Jeff Wald of Work Market, and Matt Cooper of oDesk. The networking reception will begin around 5:30PM, followed by the panel discussion.

To register for the MeetUp Group and then RSVP for the event, follow this link.

This MeetUp panel discussion will focus specifically on “online staffing platforms” (platforms that–in contrast to crowdsourcing and other human cloud platforms–clearly establish a 1-1 “work arrangement” relationship between a specific work user/payer and a specific work provider/payee). Platform companies like oDesk and Elance made “online staffing platforms” almost household words by bringing millions of small businesses and millions of global online freelancers.  But “online staffing” has been evolving rapidly in the past couple of years.  Not only can “work performed online” be enabled by these platforms, work that is performed “onsite” can also be. In addition, we are starting to see that larger enterprises can also be served (not just small businesses).  As this happens, “online staffing models” begin to cross over into the traditional staffing markets of companies like Kelly, Manpower and many others.  Our panel discussion is going to focus on what has been happening in this very interesting zone of intersection, what the panelists’ businesses are doing there, and what kind of expectations can be formed for the future.

MBO and Work Market announced an important partnership:  http://www.prweb.com/releases/2013/9/prweb11105021.htm

Work Market also recently announced this deal with SAP:  http://www.prweb.com/releases/2014/01/prweb11469237.htm#!

oDesk announced a partnership with the eponymous “staffing firm” Kelly (http://www.marketwatch.com/story/kelly-servicesr-and-odeskr-announce-alliance-a-first-between-a-workforce-solutions-company-and-an-online-work-platform-2013-12-12) and more recently, a planned merger with Elance (http://finance.yahoo.com/news/elance-odesk-announce-merger-181500402.html;_ylt=A0SO80jhJ7VSKnYAHvFXNyoA;_ylu=X3oDMTBxa3YwODBiBHNlYwNzYwRjb2xvA2dxMQR2dGlkAzIwMl8x

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“The Work Market-SAP Deal: What Does It Really Mean (for Staffing)?” [my recent SIA blog post]

WMSAPWork Market recently announced a deal with global enterprise software giant SAP. This deal not only indicates that large enterprises are reaching out and engaging with online staffing platforms to access needed talent, it also demonstrates that there are many new ways in which this can be happening (especially as enterprises more and more adopt flexible, extended workforce models). It also shows that online staffing platform businesses can maneuver and position themselves in agile ways to provide innovative, advanced contingent workforce staffing solutions for 21st century businesses.  …… 

… The Work Market-SAP deal is a “big deal” for a number of reasons, some which may seem obvious and others not. But perhaps its major significance for me is that it is a further demonstration of how online staffing platforms can engender completely new kinds of enterprise workforce management solutions (especially in the new world of extended enterprises and different kinds of extended workforces). It is an indicator of how different kinds of differently configured workforce management solutions will be created using online platforms and digital service ecosystems–created in different combinations by the successful enterprises of the future, the emerging platform providers, and the innovative players in what refer as the “staffing industry” today. The extent to which “staffing industry” players will be critical components in these combinations will depend upon the strategies they are executing now and in the next several years. 2020 is not that far way!  

To read the full post, click here.

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Online staffing revenue could reach $46 billion in 2020 (Staffing Industry Analysts)

imagesCAZ2IYSSA Staffing Industry Analysts news item summarized my recent 2020 forecast as follows:

Online staffing spend could reach as high as $46 billion by 2020, according to a new report by Staffing Industry Analysts. The number represents an “aggressive, but possible” forecast.

The most conservative forecast in the report has online staffing spend growing to $16 billion by 2020. However, the report also makes a “quite plausible” forecast of $23 billion that is well within reach of the online staffing segment.

The full article, which provides some further summarization from the forecast report, can be read here:  http://www.staffingindustry.com/Research-Publications/Daily-News/Online-staffing-revenue-could-reach-46-billion-28527

 

 

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Online Staffing & Human Cloud / Cloud Labor Platforms | LinkedIn

OnlineLaborThis group is focused on bringing together HR, Contingent Workforce Procurement, Staffing Industry and any other Professionals, Academics and Students, and anyone else who may be interested developing insight into and understanding of this emerging area.

See more and/or join http://www.linkedin.com/groups/Online-Staffing-Human-Cloud-Cloud-6520357/about

 

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oDesk and Elance Merger: The Next Era of Online Staffing Begins (my recent post at SIA)

PairsThe news is out:  Elance and oDesk have taken the plunge.  The planned merger, along with prior events in 2013, strongly indicate that the long-emergent online staffing industry is shifting up a gear (or two?).

“In [a] broader, longer-range, strategic context, it becomes clear that it makes sense that the groups of investors in oDesk and Elance rethink continuing to pour resources into two — only seemingly competing — prototypical freelancer marketplace platforms. oDesk and Elance have already both won that competition, and now another bigger, more important game is starting with a whole set of different opportunities, competitors, and partners, etc..”

In my blog post, I provide my perspective that leads me to the above conclusion.   Read the full post.

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Kelly, oDesk and the “Hybridization” of Staffing in 2013 (my recent post at SIA)

hybrid

“The recently announced partnership between Kelly and oDesk is not just an isolated landmark event in the staffing industry, it is a part of a whole process of evolution and transformation — one that may alter the face and landscape of the staffing industry over the next 10 years (strengthening and bringing new growth to the industry as a whole).

While the general, incremental adoption of information technology applications into staffing firms has been a major driver of improved staffing performance and efficiency, another set of developments has been emerging: that is what I call the “hybridization” of traditional staffing agency and online staffing platform models. This hybridization entails a variety of potential combinations of these two models.”

For some time, many thought that the two models were quite different and performed in different business segments. But we are now starting to see very different kinds of “mash-ups” of these models resulting in ways of intermediating work arrangements, and even new forms of work arrangements (such as on-demand, global freelancer-based Talent-as-a-Service or TaaS).*

As I see it, 2013 will be the year that we look back on and say: “Yes, that was when signs of hybridization in the staffing industry started to appear.”

Read more at SIA, click here.

———————————————————————————————————————

* In fact, “mash-ups” related to technology, platforms, and hybrid models are now causing us to have to think and speak differently about new and evolving“work-arrangements.”  See:  “Online Work” vs.
“Online-Intermediated Work Arrangements” – That is the Question

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Cloud Staffing Firm, PRSONA, Announces Focus on “Office White-Collar” Staffing

prsonaPRESS RELEASE:  Excerpt

PRSONA, the Cloud Staffing© company, announced today that it will be concentrating its business focus and applying its innovative online staffing platform model to meet the critical needs of small and medium sized companies to fill locally-sourced, onsite “office white collar” positions (whether temporary contractors or W2 employees).   ….   “Office White Collar” positions, which can include office administrative, customer service, tech support, and many other “essential” day-to-day business execution roles, can be subject to fluctuations and high turnover and entail the need to source and engage reliably skilled workers quickly.  Businesses have often traditionally relied on “staffing agencies” to supply these kinds of workers, who are often engaged as temporary or contract workers. PRSONA can fulfill such—high-demand and hard-to-fill–positions faster and much more economically than traditional recruiting and staffing agencies, based on its innovative Cloud Staffing© model.

Click here to read entire press release.

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freelancer.com Share Price Continues to Plummet (Dec 6th 2013)

FLN1In past week or so, the freelance.com share price has continued to decline in light trading as the company announces an initiative in Malaysia that seems to continue an apparent strategy of expanding its freelancer base in emerging markets.

In my earlier post, “Whither the freelancer.com share price?  (the week ending November 21, 2013),” I noted the initial decline:  “After a rise in share price to  $1.84 AUS this week, from a close price on opening day last Friday of $1.60 AUS, freelancer.com shares have come down to $1.62 at Thursday close in Sydney.”

In recent days, the share price has dropped as low as $1.00, with a Friday close of $1.120 AUS, representing a drop in market cap to about $480M AUS..

FLN2

The only development reported by freelancer.com in the past week or so was about this initiative in Malaysia (12/5/13), as reported by Staffing Industry Analysts:

Freelancer Limited (FLN: ASX) today announced that Freelancer International Pty  Ltd, a wholly owned subsidiary of Freelancer, has entered into a Memorandum of Understanding with the Multimedia Development Corporation (MDeC) in Malaysia in order to generate additional income for low income households under the Government’s Digital Malaysia initiative.

freelancer.com seems to continue to pursue a strategy of tapping labor forces in emerging economies.  It will be interesting to see next week how investors respond after digesting this news.

 

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“Online Work” vs. “Online-Intermediated Work Arrangements” – That is the Question

OnlineLaborThe world of work, staffing, etc. has become more and more complex in past years and more and more complicated to talk about.  This post tries to bring a little bit of clarification to at least two terms. Discussing the different meanings of just two terms, I think, may bring some additional clarity to others (or at least provoke some further thought).

So where is the complication coming from?

In a recent post, What Is “Work Arrangement Intermediation (WAI)?” And How Is It Changing?, I discussed a trend that has been observable for a few decades now:  more and more “work arrangements” (both “permanent” and “contingent” ones) are being intermediated – in some manner or to some degree–by 3rd party entities (including PEOs, staffing firms, etc.)*.

Furthermore, over the past 15 years, information technology (in the form of enterprise systems, IT-enabled processes, online marketplace exchanges and other platforms) has been steadily becoming a critical part of—as well as extending and expanding–that “work arrangement intermediation” (WAI) function.  Vast numbers of “work arrangements” today are at least partially intermediated through some kind of digital-online capability, ranging from job boards (like Monster, CareerBuilder, etc.) to end-to-end “online work arrangement intermediation platforms”  (like oDesk, Elance, Work Market, to name a few).

In a recent HR.com webinar, entitled “How Technology and New Online Platforms Are Driving New Forms of Contingent Work Arrangements,” I offered the following definitions:

Work Arrangement

A complete “transaction of work” between a worker who provides the work and an individual or organizations that uses and typically pays for the work. Work arrangements have many dimensions: economic, legal, structural (how long, how frequently, when and where, etc.)

Intermediation

An ongoing function wherein transactions between two or more parties are critically facilitated or enabled (as a service) by one or more other parties (aka intermediaries).  There can be entire industries or ecosystems that serve an intermediation function (e.g., retail, banking, staffing, et al)

Platform

A unified “structure” that allows different parties–often in large numbers—to interact and produce value-added outcomes for the interacting parties (and usually the “platform owner”).  Example: shopping mall. Over the past 15 years, “digital, online platforms” have begun to transform whole parts of the economy (Amazon, Priceline, Travelocity, iTunes, Ebay, AirBnB, Uber, Facebook, etc.)

Mash-up all of those things and you get “end-to-end “online work arrangement intermediation platforms.”

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So over the past 10 years or so we have been seeing more and more end-to-end “online work arrangement intermediation platforms” that digitally intermediate the whole work arrangement, end-to-end (from an organization “finding/engaging the worker” all the way to “paying the worker” when the work is done).  Pure digital (often single platform) intermediation.  Wow!

Until fairly recently, most of these “online work arrangement intermediation platforms” have enabled what are effectively “contingent” work arrangements between organizations and workers for types of “knowledge work” (software development, graphic design) that can be performed remotely by workers (often with the management of the work conducted using platform mechanism like “online work rooms,” “project milestones,” “chat and messaging,” etc.).  Over 40 firms, including oDesk, Elance, and freelancer.com, do this.

More recently, firms like Work Market, OnForce, Next Crew, and PRSONA have begun providing digital platforms that intermediate work arrangements, between organizations and workers, for work that is not performed remotely or “online,” but rather is performed “on location” wherever an organization specifies (“the office,” another location such as a where something—such as a service call– needs to be done, etc.).  Also, these work arrangements do not need to involve “knowledge work;” on the contrary, work arrangements for retail support, restaurant or event staff, etc. are can be fully enabled by these “online work arrangement intermediation platforms.”

So now we come back to the original question:  What’s the difference between “Online Work” and “Online-Intermediated Work Arrangements?”

Online Work” simply means work that can be performed “online” (so all the work can be done/completed in a remote location without the worker any time ever going anywhere).  All “online work” is therefore “remote work,” but not vice versa.  Someone could be painting glass pieces or transcribing documents and sending them by UPS to the organization they are working for—nothing “online.”  But some “remote work” (typically knowledge work) is being performed “online.”  That is, to some degree the “work process” is being intermediated (supported or enabled) by digital online tools or platforms (including email, collaboration systems like Google docs, or even more extensive platforms like Atlassian Jira or GitHub (software) or 99Design (graphics), etc.).  When “remote work” is happening this way (with the performance enabled to a significant extent by online tools and platforms), then we can call this “online work.”  To be sure, in this case there is some limited “online intermediation of the work arrangement” going on, but it is limited to supporting the “performance of the work” and is not enabling/supporting the full scope of the work arrangement (from an organization “finding/engaging the worker” all the way to “paying the worker” when the work is done).

Online-Intermediated Work Arrangements” are however specifically defined in these terms.  In this case, we are not only talking about the extent to which “the work is performed” with online enablement (per above), we are talking about the extent to which the entire “work arrangement” is enabled or intermediated by online/digital means (as opposed to traditional means).  In the most extreme form of “Online-Intermediated Work Arrangements,” the “work arrangement” is “intermediated” across an “online/digital platform” (end-to-end, from an organization “finding/engaging the worker” all the way to “paying the worker” when the work is done).

In these cases of “Online (Platform)-Intermediated Work Arrangements,” the “work arrangement” need not involve “online work” (as defined above).  Indeed, the work involved can be performed “on location,” on an organization’s site or wherever the need is—but the “work arrangement” has been “intermediated online” (i.e. across an “online platform”).  Moreover, “Online-Intermediated Work Arrangements” do not have to be “contingent” arrangements:  legal employees can be engaged via “Online Work-Arrangement Intermediation Platforms” (and we are seeing this starting to happen, though so far it is has been more common to see “contingent” (contract) workers being engaged).

One of the most interesting outcomes of the advent of “Online Work-Arrangement Intermediation Platforms” is the “innovation” of “work arrangements” that is occurring! Information technology is allowing us to re-think and reshape “work arrangements” into new forms that—it turns out—do not fit neatly into those traditional institutional and legal concepts of “employee” and “contractor” (on which so much depends, including our tax code in the US).  “Online-Intermediated Work Arrangements” are pressing the limits—technology-enabled intermediation allows for forms of work like crowdsourcing, et al.. And the line between (a) a worker’s work and (b) the technology-intermediated outcome (i.e., a platform’s service output) is becoming increasingly blurred.   In this context, we are now seeing forms of work/service-output that are being defined as Talent-as-a-Service or Workforce-as-a-Service.

Ironically, by achieving (I hope) clarification of the above terms, we are also increasing the blurriness of the future “work arrangement” picture, as suggested here:

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It’s becoming clearer that the future of “work arrangements” and “what they will be” remains unsettled and will like evolve in new ways over many years, along with generational effects, economic demands, eventual shifts in regulation, and an increasing and changing role for that part of the economy that will perform the business of “work arrangement intermediation” in the future, highly digitized world.   Clearly, we will definitely be seeing more “Online Work” and also more “Online-Intermediated Work Arrangements” (whether the work is performed “online” or not, whether it is “delivered” as the outputs of specific, identifiable workers or as the “on-demand,” perhaps bursty service outputs of crowds of networked worked across the world).  In any case, change lies ahead—how fast and how much remains to be seen.

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*  Some researchers (David Autor and others) have examined the growing “labor market intermediation” sector of the economy.  I prefer to refer to the sector as “work arrangement intermediation” (WAI) sector, as I think the focus should be on “work arrangement” intermediation, not on (some perhaps mythical) “labor market” intermediation.  If there is a “labor market,” it is certainly an “inefficient” one (except perhaps for “commodity” jobs/workers). In any case, this recent paper reasonably describes the current “intermediation” sector for “work arrangements:” “Labor Market Intermediaries and the New Paradigm for Human Resources,” Rocio Bonet , Peter Cappelli & Monika Hamori (2013) The Academy of Management Annals,7:1, 341-392, DOI: 10.1080/19416520.2013.774213

 

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(my recent SIA research report) “Who (and What) Are “The Largest” Online Staffing Platforms in 2013? Elance, freelancer.com, oDesk?”

Over just the past several years, there have been three online staffing platforms that have deliberately pursued AND achieved a global scope and a scale of serving many millions of users. They are (alphabetically ordered), Elance, freelancer.com, and oDesk.

  • These three platforms continue to pursue strategies to capture more of the potential world market for bringing together remote, online freelancers (and microfirms) and the organizations which can use their services.
  • freelancer.com took the quickest route (2009‐2013) to an IPO/liquidity event for investors, including rolling up six different freelancer platforms, while Elance and oDesk have grown organically to 2‐4 times the size of freelancer.com (gross spend on platform).

The purpose of this Staffing Industry Analysts research report is to provide insight into the largest online staffing businesses in 2013:  who they are, what they are, and how they are different.  This report presents key facts about these businesses, and it clarifies their different paths of development and current business models.

Report can be found at this link.  Requires SIA Membership.

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Online Staffing/Human Cloud Trifecta: freelancer.com, Elance and Something Else – (my recent Staffing Industry Analysts Blog Post)



Online Staffing/Human Cloud Trifecta: freelancer.com, Elance and Something Else Staffing Industry Analysts (registration) (blog) It seems that in the small emerging space of online staffing and human cloud platforms there is some new development or…


Andrew Karpie‘s insight:

Online Staffing/Human Cloud Trifecta: freelancer.com, Elance and Something Else – Staffing Industry Analysts (registration) (blog)


See on www.staffingindustry.com

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“From Contingent Labor to Workforce-As-A-Service” (My recent whitepaper developed for OnForce)

My recent whitepaper, “From Contingent Labor to Workforce-As-A-Service:  Technology and Platforms at Work –  What You need to know in 2013” examines trends and developments leading up to the emergence of “Work Arrangements 4.0.”

w40With Work Arrangements 4.0, as with Work Arrangements 3.0, there is a “technology-based platform” that intermediates the work arrangements between businesses and workers.  In 3.0, however, businesses and workers use the platform to establish and complete one-to-one work arrangements on a project basis with workers being specifically assigned work by the businesses.  In this model each project represents an individual contracted work arrangement between a business and a worker.

In the Work Arrangement 4.0 model, there is also a “technology-based platform” that intermediates the work arrangements between businesses and workers—but the platform does not simply enable a work engagement between an individual business (typically, a small business), on the one hand, and individual worker, on the other. Instead the platform delivers a “managed service” consisting of a managed workforce (i.e., Workforce-as-a-service).   We can consider this to be a distinct layer of “value-added service” provided by the platform. 

 

Complete white paper can be downloaded immediately, without cost or login, at:  https://www.onforce.com/resources#onforce_insights

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What Is “Work Arrangement Intermediation (WAI)?” And How Is It Changing?

OnlineLaborWhat is “work arrangement intermediation” or “WAI”?  In abstract economics terms, it is the intermediating mechanisms that match supply and demand in labor markets.  In more concrete terms, it’s how work arrangements get established between workers with talents, capabilities, and skills and the business/organizational entities that must have work performed (the outcome of these work arrangements can be full or part time jobs, contract gigs, crowdsourcing processes, etc. etc.).

In the not so distant past, “WAI” mechanisms consisted of word-of-mouth, personal/professional ties, newspaper classified, resumes and fax machines, staffing agencies, etc.  Needless to say, labor markets (relative to say financial trading markets) have been relatively informationally inefficient, high friction, etc.

Over the past, 13 years, digital technologies have come to play more and more of a role in “WAI.”  From late-1990s to the most recent severe recession, digitization has crept along, mostly automating traditional  labor supply change practices/processes with electronic (parsable) resumes, job boards like Monster, company career sites and applicant tracking systems (what amounted to not much more than “paving the cow path”).

But with the recession of the late 2000s, it became very clear that “WAI” mechanisms were “not doing their job.” It was also becoming clear that industry increasingly needed more flexible and variable “work arrangements” and different and rapidly changing skills, and existing “WAI” mechanisms were being pressed to enable more flexible and variable “work arrangements” and faster and more efficient matching/closing of work requirements/needs and skill/talent suppliers (workers). It also became clear that labor supply/demand challenges were not just problems of a locally dysfunctional “spot market,” but there were deficiencies of a much more global scope (especially on the supply side–in other words the adequate development of right-skilled workers through training and education processes and institutions).

In the years since the last recession, there has not only been an obviation of the above problems and shortcomings in “WAI” mechanisms, there has also been increasing (largely entrepreneurial) innovative exploitation of digital technologies (social, mobile, cloud, informatics (AI, semantic, etc), big data, et al) and new social and platform service models to attempt to address these issues/problems. One can definitely say that we are now seeing (increasingly over the past 5 years) the emergence of a broad range/growing populations of “smart service systems” in the domain of “WAI.”  These include social networks like LinkedIn, flexible work platforms like oDesk or Elance, crowdsourcing platforms like Innocentive or Lionbridge, big data aggregators like Entelo and TalentBin, testing/assessment (by doing) platforms like Gild or Smarter.  We are even seeing the focus of “WAI” expanding to smart service systems that integrate labor demand with supply up-stream (in terms of training and education).

The take-away here is that “WAI” is becoming a crucial area of emergence of digitally driven and integrated “smart service systems”–and this wave of development is still at a very early stage–not yet close to cresting on a maturity curve.  Change has already been underway for several years, but what happens in the next several years (by 2020) will be a more pervasive transformation of how work is intermediated and the forms of work that can be intermediated.  Perhaps the most serious question is the extent to which static or slowly changing labor and tax regulations will dampen this transformation (or the extent to which the economic benefits associated with digitized, smart “WAI” will hasten regulatory adaptation/change).

Comparing business paradigms | P2P Foundation

“People centered” means that control of infrastructure, access, distribution, resources, and co-governance are now on the scale of the individual person. When an individual person with this empowerment reaches their individual carrying capacity to operate, they will tend to reach out to others who are operating like them, and a connection-based network will emerge. Economic development here targets individuals operating as self-employed independents who network together. Independents, small businesses, community groups, working together, with government, higher education, and larger business are the new economic driver. The more control people have an on individual scale of infrastructure, access, distribution, resources, and governance, *and* the more connectivity there is between those people, the that more growth happens in “people centered economic development”.

When control of infrastructure, access, distribution, resources, and co-governance are now on the scale of the individual person, a new way of coopertive co-managing of existing resources, and surpluses of production tends to emerge. That new way of co-managing is known as “Resource Sharing”.”

Source: blog.p2pfoundation.net