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Online staffing's trend toward enterprise use continues with Elance offering

September 24 2013

The trend in online staffing and service providers targeting the enterprise market continues. Elance, one of the largest online staffing firms, announced today it's rolling out an offering for enterprise-level users called "Private Talent Cloud."

“Elance's Private Talent Cloud is consistent with an emerging trend: more online platform players, such as Work Market and others, starting to address the mid-large enterprise market, not just small businesses,” said Andrew Karpie, affiliate analyst at Staffing Industry Analysts.

“It is more challenging to penetrate and serve the enterprise segment, and it's also the space where there can be more competition for share with traditional staffing," Karpie said. "Up to this point, online (virtual) workers and their services have remained outside the boundaries of the existing contingent workforce supply chain processes (VMS, MSP, etc.). If the Elance offering can make a major breakthrough into the enterprise segment, then online (virtual) workers — talent-as-a-service — may be more difficult to ignore from the standpoint of contingent workforce management in some larger enterprises.”

Private Talent Cloud provides a special access portal for building and managing private talent pools. Prior to Private Talent Cloud, all Elance users on the labor-demand-side used the same standard Elance process and interface to hire freelancers.

“Now, through the Private Talent Cloud, managing your extended workforce is as easy as managing your social network,” said Fabio Rosati, CEO of Elance. “Hiring managers can engage with the best external talent in real time, gaining access to the resources they need to win the war for talent while retaining enterprise-level visibility and control.”

The online staffing provider has been developing the service for the past 18 months and has a couple of dozen customers using it pre-launch.

“We supplement our core team with a network of talented freelancers from around the world, which can be a lot to manage,” said Julie Clarenbach, editorial manager at The Motley Fool. “Our Private Talent Cloud has dramatically improved how we manage and pay our freelance network — plus, we’re keeping our best talent more productive which makes us more competitive.”

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Staffing Industry Analysts

Jon Osborne 09/27/2013 01:57 pm

Staffing Industry Analysts posts its policy of objectivity on this website, and we live by it. “We provide practical, actionable, forward-thinking advice to help our clients develop their business and consistently treat them with the utmost respect, honesty and care. In our role as advisors we maintain strict confidentiality. We deliver research and editorial judgments that are completely objective and independent of financial considerations.”

That said, when something occurs that is newsworthy—whether it is comfortable to talk about or not—we will report on it. The item above is a case in point.

Last year we had forecast global online staffing growth in 2013 and 2014 at 40 percent per year. Based on the performance of companies we are following, we just revised those forecasts upward to 60% in 2013 and 70% in 2014. At the same time the rate of origination of these firms is increasing. In the period 2004-2009, about six such firms were created per year. Since that time, the rate has increased to over eight per year. And that’s just counting those we have identified. A year ago we thought there were 50 online staffing firms. By the time we completed our list this year, we counted 67. After the list was published we found two more.

Up until this announcement, all that was just interesting, as an unconventional opportunity, but not of particular urgency—for the most part online staffing firms served smaller clients, but did not constitute much of a competitive challenge to traditional staffing. That just changed. For the first time, with this announcement, a major online staffing firm is going after the large company market. And that is worth reporting on.

I realize that among many staffing firms, online staffing is often seen simply as an unwelcome competitive threat, the latest technological gorgon to rise out of the sea—there was VMS, and job boards, and now this. When will it end? The answer is that it won’t end. Staffing is fundamentally an intermediary business—matching talent to those in need of talent. To the degree that costs of that intermediary business can be automated, that automation will happen because automation is cheaper. That doesn’t mean that the people side of things will disappear, but it does mean that anything done today with branches and people will be challenged by online substitutes.

The good news is that staffing firms are on the ground floor. Online staffing, despite its spectacular growth, still only constitutes a small part of the overall global staffing market. There is plenty of time for traditional staffing firms to learn about these technologies and evaluate possibilities for partnership or for starting their own online staffing operation. Staffing Industry Analysts corporate members will find a great deal of research on this topic on our website in the research section.


Dan Struve 09/25/2013 11:30 pm

I concur with Michael. These type of articles appear to be paid advertisements. They should be noted as such.


Michael Weinholtz 09/25/2013 07:17 pm

Did Elance pay for this advertorial? In the past year or so, whether it's VMS/MSP or online staffing, you guys at SIA have been doing more promoting than reporting. Have you changed your mission?


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