The biggest disruption to the staffing industry over the last decade was the rise of the VMS and MSP models. VMS adoption alone jumped to 79% of large firms in 2019 from just 16% back in 2006.

What’s the next biggest disruption to staffing? It’s the human cloud, said Barry Asin, president of Staffing Industry Analysts, in a keynote speech today at the Executive Forum North America in Austin, Texas.

“I think it’s going to change the way the industry runs,” Asin said.

The human cloud includes online staffing firms such as Upwork and Freelancer, crowdsourcing firms such as 99 Designs, and online services such as Uber.

Large staffing buyers have been slowly adopting the human cloud, Asin said, citing figures from SIA. Thirteen percent of large buyers used online staffing in 2016 and 2017, and that number inched up to 15% in 2018.

However, the number of large buyers considering the use of online staffing jumped to 53% in 2018 from just 21% in 2017. And the data doesn’t include online staffing work possibly being done at large firms with managers ordering outside of the contingent workforce program.

Another point: Upwork, the largest B2B online staffing firm, posted gross service volume of $449 million in the third quarter.

The human cloud, although still relatively small, is also growing at three times the rate of traditional staffing.

Buyers aren’t the only ones affected by the human cloud; the workers themselves are as well, Asin said. The number of workers classified as “taxi and limousine drivers” surged after the launch of Uber in 2011. And workers opting to drive for Uber may be the same workers that would have worked for traditional staffing firms in the past.

“I would argue in the war for talent, Uber won,” Asin said.

However, it’s likely that traditional staffing and the pure human cloud will combine in a great convergence with the two models coming together. One example Asin cites is TrueBlue Inc.’s (NYSE: TBI) online JobStack app, which is now filling 30% of its jobs.

And smaller staffing firms can also take part in the human cloud using technology providers.

Asin’s talk included the state of the industry, the skills shortage, M&A and the economy as well as the biggest potential threats and opportunities.

 Those threats include:

• Automation leading to fewer jobs
• New entrants to the industry/disruption
• An economic downturn
• Negative public perception
• Negative legal/legislative developments
• Complacency

The biggest opportunities include:

• Growing acceptance of the industry
• Escalating skills shortages/upskilling
• Solving market failures
• Growing markets
• Leveraging new technology for efficiencies
• Growing client sophistication

Executive Forum North America continues through Thursday.