SI Review: March 2012

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Wisdom of the Crowd

2012 trends to focus on community, VMS and mobile tech

By Craig Johnson

Change is in the air. For an industry that’s already evolved significantly from the “Kelly Girl” days, the future promises more change to come. So what’s in store?

For starters, we’ll see more projects being crowdsourced, more hiring in the cloud, more use of technology, more independent workers and the increased use of vendor management systems. In short, more of everything.

Crowdsourcing ranks as an emerging practice. Crowdsourcing has been used for recruiting, but it’s also a relatively new area and it remains to be seen as to whether crowdsourcing could itself be a new branch of the staffing industry.

Mobile technology is also on the rise with the use of smart phones and tablet computers becoming more wide-spread.

Along with mobility, the number of independent workers is also set to rise, with some predicting a majority of private workers in the U.S. being independent by 2020.

And in the midst of these new trends, don’t forget about vendor management systems and managed service providers — whose use is expected to continue to rise.

Crowdsourcing

Crowdsourcing is a process made possible by the Web. Companies can take a large project and break it up into tiny tasks — sometimes called “microtasking ” — which are then put out to the “crowd” of many individuals on the Web.

There are several types of tasks that can be crowdsourced:

  • Data cleanup, for example matching up business names with business websites.
  • Content generation for websites.
  • Translations.
  • Tagging and categorization — such as watching a video then analyzing what is happening in the video.
  • Ideas submissions. For example, a company looking for a logo redesign will put out the request to the crowd, which will return design ideas for the company to choose from.

People in the crowd typically work on a piecework basis that is based on each tiny task that they perform. In the case of idea submissions, only the designer of the top design would be paid.

Workers can be anywhere around the world and, generally, work on tasks that can be done on a computer.

Examples of companies that enable crowdsourcing include Clickworker.com, CrowdFlower, Amazon.com’s Mechanical Turk and DesignCrowd.com. [See sidebar below.]

Some crowdsourcing firms help clients work with Mechanical Turk while others have their own crowds.

Benefits include an ability to ramp up very quickly with the crowds able to take on very large tasks — perhaps even more quickly than could temporary workers from a staffing firm.

Cost of crowdsourcing has also been touted as advantage.

According to a study released in December by Everest Group and Lionbridge Technologies Inc., crowdsourcing could save up to 70 percent when compared to traditional business process outsourcing.

Right now, crowdsourcing is still very much new, but its supporters say it is growing.

Christian Rozsenich, CEO of crowdsourcing firm Clickworker.com Inc., says two years ago people asked what his firm was doing. Now they know what it’s about. “There’s a lot more confidence in the principle itself,” Rozsenich says. “We do see a growing demand in the industry … We still believe it’s an early adopter market at this point.”

Other crowdsourcing firms are also seeing increased visibility.

“When we started it was really, really new; our customers were mostly innovative tech companies,” says Lukas

Biewald, who founded the crowdsourcing firm CrowdFlower in 2007. “We are starting to see that we are getting more and more Fortune 500 customers. … What we are seeing is that big companies feel that it is an important part of their HR strategy.”

Biewald says he believes all Fortune 500 companies have work that can be crowdsourced.

CrowdFlower also puts on the annual CrowdConf show for crowdsourcing, which brings together executives, technologists and venture capitalists. Biewald says the conference nearly doubled in attendees to more than 500 in 2011 from the inaugural show the previous year.

Among the online tasks, crowdsourcing has also been used for recruiting. A user may notify an online community through a social networking site of the need for a specific person in hopes of getting referrals. Crowdsourcing might also help create job descriptions. The Harvard Business Review reported that Best Buy used social media to write a job description for a senior manager of emerging media marketing.

Will crowdsourcing coexist with staffing firms? It’s possible that crowdsourcing will be just another arrow in buyers’ quiver of contingent labor options.

Jim Humrichouse, president of Pinnacle Technical Resources, likens crowdsourcing to how job boards were once viewed, noting that at one time staffing firms feared job boards were competitors but now the two firms are best of friends.

“From a staffing industry standpoint, I don’t believe crowdsourcing will ever play as large a role as job boards currently do, but if it does, it will most likely become another tool for staffing firms to identify and/or provide talent,” Humrichouse says. “Firms and/or recruiters who develop expertise in the use of crowdsourcing will have a competitive advantage over those who don’t.”

Buyers use staffing firms for a variety of reasons including talent acquisition, labor force flexibility, risk mitigation, diversity goals, etc., he says. Crowdsourcing offers a different value proposition that competes with staffing in some ways but not others.

Mobile Ascendency

This year will be the “year of mobile ascendency,” according to market intelligence firm International Data Corp., with smart phones and tablet computers surpassing desktops in shipments and spending.

Such mobile devices are becoming more and more popular. And there’s an effort to make Web content more accessible to mobile devices — such as enabling job seekers to apply for a position online using their smart phones.

However, the mobile scene remains relatively new.

“There’s definitely an increase in interest in mobile devices,” says David Searns, president and CEO of the Haley Marketing Group in Williamsville, N.Y., a marketing firm serving the staffing industry.

While the number of people visiting websites via mobile devices is growing, it remains small at this time, he says — 4 percent of website traffic in 2011, up from 2 percent in 2010 across more than 200 websites monitored by the Haley Marketing Group.

And almost all the websites Haley works on now include a mobile version with simpler design and easier navigation for mobile devices, Searns says.

“The industry is definitely very aware of the need to pay attention to mobile,” he says. “It’s another way you have to deal with technology and running your staffing company.”

Leslie Vickrey, president and founder of ClearEdge Marketing in Chicago, which also works with staffing firms, says she has definitely seen companies develop websites that are smart phone and tablet friendly.

Making a website mobile friendly means not using Adobe Flash because it doesn’t work on all mobile devices. It also means testing the site on multiple platforms — smart phones, tablets and desktops across multiple browsers — to make sure it works.

“It’s just becoming more and more where companies have to take that into consideration,” Vickrey says. If someone gets to a website and he or she has difficulty accessing the content, that person will likely become frustrated and leave.

Quick Response Codes, or QR Codes, are also popping up. The QR Codes look similar to a square-shaped barcode. They appear on printed material and provide an optical prompt for smart phones to go to a specific website. But Vickrey cautions that the landing sites should be mobile-friendly. “You need to make sure what you are sending them to actually works on a phone,” she says.

Growing Independence

The number of “independent” workers, whether working through staffing firms or as independent contractors, appears to be growing as well. Companies want flexibility with their workforce, and technology is making it easier to be an independent worker.

Staffing Industry Analysts, which published this magazine, estimates that staffing employment will rise to 3.1 million in 2018. Temporary employment was 2.3 million in December 2011, according to the U.S. Bureau of Labor Statistics.

A survey of staffing buyers also found they estimated, on average, that 15 percent of their workforce was contingent in 2011, up from 11 percent in 2005.

Other estimates also point to a greater independent workforce.

MBO Partners predicts that more than half the private U.S. workforce, 70 million people, will be “independent workers” by 2020, according to its 2012 independent work preview.

MBO’s count of independent workers includes those who are on fixed-term contracts, independent consultants, those working through temporary agencies, workers on an on-call arrangement and those who own a business with fewer than five employees.

Part of what is fueling the independent workforce is technology.

“There’s more and more of this population that’s out there in the workplace and there’s more tools to find one another,” said Gene Zaino, president and CEO of MBO Partners. “There’s a lot of collaboration going on with the social networking that is really enabling a new community of skilled workers that are able to consult with clients from anywhere, anytime.”

Independent work will flourish across the generations, but organizations will turn, in greater numbers, to mature, seasoned expert workers for independent contributions in 2012, MBO Partners predicts.

Separately, a survey of independent consultants by M Squared Consulting found that 69 percent say they feel the use of a flexible workforce is a permanent change and not just a temporary response to economic conditions.

More VMS and MSP

Another trend is increased use of vendor management system and managed service providers.

Staffing Industry Analysts estimates that 83 percent of buyers will be using a VMS by the end of 2012, up from 75 percent in 2011. MSP usage will also rise, to 73 percent of buyers in 2012 from 69 percent in 2011.

Managed service is expanding and becoming more inclusive, and will enter the middle market, says Jim Lanzalotto, founder and CEO of Scanlon.Louis, a strategy and marketing provider for staffing firms.

However, the question is “can the MSPs create a product that’s profitable for them to serve the middle market?” asks Lanzalotto.

Pinnacle Technical Resources’ Humrichouse is bullish on VMS. In fact, Pinnacle acquired Provade Inc., a global provider of VMS, in the fourth quarter of last year.

“I’m of the belief that any large user of contingent labor should have a VMS system,” he says. “If you’re a big user of contingent labor spend, you’re well-served by having a VMS …. The alternative is a very manual, labor-intensive process where the lack of integration with other forms of procurement limits clients’ ability to understand, manage and optimize their spend.”

While many large users of contingent labor have a VMS in place already, the vast majority have been unable to migrate 100 percent of addressable spend into those systems, Humrichouse says, adding “the real opportunity in that sector is to move all the addressable spend into the VMS system.”

The Future

2012 and beyond brings with it a whole slew of trends. Regardless of what takes off and what doesn’t, it’s going to be a busy decade. New developments such as crowdsourcing and mobile recruiting are in their infancy. Others, such as VMS/MSP usage and an expanding flexible workforce, are already under way.

One thing the future of the staffing industry won’t be is boring.

Craig Johnson is managing editor, staffing publications, at Staffing Industry Analysts. He can be reached at cjohnson@staffingindustry.com.

[SIDEBAR]

Making It Click

Two examples of firms in the crowdsourcing marketplace include CrowdFlower and Clickworker.com Inc.

CrowdFlower
Founded: 2007
Headquarters: San Francisco

CrowdFlower founder Lukas Biewald was working at a technology firm and had a huge amount of data cleanup work to do. He thought about outsourcing the job or hiring a staffing firm, but the turnaround time was too slow. That’s when he had the idea to pay people a few dollars or a few cents for each tiny bit of work.

“It seemed like a good way to get data cleaned up quickly,” Biewald says. “I started CrowdFlower to do that for other companies.”

With crowdsourcing, customers can get tasks done quickly and they also have access to super-variable staffing, he says.

One example is a client that seeks to keep copyrighted images off its website, Biewald says. It needs people to check the images, but images are uploaded all the time and it’s difficult to determine how many images will need to be checked at a time. “Because we have this kind of almost cloud-based workforce, we can give them access to people whenever they have images come in,” he says.

The flexibility is also a benefit for workers.

“It’s kind of like the world’s most flexible way for earning money doing work,” Biewald says. “I think people just really appreciate the flexibility of the work.”

The company has had more than 2 million people come work for it. Half are in the U.S., and half are from other countries.

As for projects, CrowdFlower tends to focus on data cleanup, “because it’s a big market and also because it tends to have jobs with a clear right or wrong answer,” Biewald says.

The company hires anonymously online and clear right or wrong answers help it to develop metrics to ensure jobs are being done properly. More seasoned CrowdFlower workers are used to double check the work of new workers. Over time, the new workers earn more trust.

Clickworker.com Inc.
Founded: 2005
Headquarters: Essen, Germany

“What we offer is crowdsourcing services to companies who have a large amount of work they need accomplished in a short amount of time,” says CEO Christian Rozsenich.

Clickworker focuses on four different types of projects: content creation, translations, Internet research and tagging and categorization (such categorizing video content).

For example, a company may need 10,000 articles written on various subjects to use as website content. It would send the 10,000 topics to Clickworker, which would then send the tasks out to the crowd with different people writing the content on different topics at the same time.

Rozsenich says Clickworker offers a turn-key solution to its clients seeking to crowdsource. Clickworker does the recruiting, education, training and selection of the crowd. It also offers a level of quality.

“The client only specifies to us what is needed and specifies the input, and we do the rest,” he says.

Crowdsourcing brings costs savings, Rozsenich says. However, it also brings a very high level of flexibility in terms of workload. Unlike in outsourcing, clients don’t have to commit to a certain volume, Rozsenich says. Another benefit of crowdsourcing is very little fixed costs.

Clickworker has approximately 10,000 new/recruited clickworkers each month. The company controls the speed of growth so that the size of the crowd is in balance with the work from clients. About half are in North America. Of the other half, about 90 percent are in Central and Eastern Europe.

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