There are some new kids on the staffing block: Elance, oDesk, and dozens of others. If you haven’t been paying attention to online staffing, you’d better start. The numbers show that Elance had more than 650,000 job postings in 2011 and had cumulative revenue of $500 million since it started. Its competitor, oDesk, had more than a million job postings in 2011 and its contractors earned more than $25 million through it in February 2012 alone (annualized, that would be $300 million). There are other sites like Guru, Vworker and Freelancer.com that are in a similar vein.
But preliminary findings from our recent buyer survey show that online staffing is just barely penetrating the contingent market. Imagine a world where you can get the worker of your choice via a website with minimal effort, no obligation and zero legal hassle (most online staffing companies handle the compliance issues, 1099s, year-end tax reporting, etc.). No more grappling with high mark-ups, onboarding hassles, corporate culture misfits, supplier mismanagement, etc. Wouldn’t that make your life easier? That is what online staffing in bringing to the table.
Think back to the automation of textile manufacturing in the 1800s. As a protest, the Luddites tried to break the mechanized looms that were taking away their jobs. But what the automation did was make textiles so cheap that it spawned a whole new industry, which ushered in different functions and countless jobs.
Ditto with online staffing. Sure, it will reduce the number of people doing manual sales, recruiting, etc., but in the long term, lower pricing will generate increased demand and new roles. My recommendation: that both suppliers of staffing services and their clients embrace this phenomenon. It’s going to go a long way and staffing firms should see it as big opportunity if seized – and a threat if ignored.