CWS 3.0: June 11, 2014

Print

Online staffing is the new frontier: CW managers’ interest rises sharply

Use of online staffing firms may be uncharted territory for many contingent workforce managers, but it’s changing. A survey of contingent workforce buyers found a sudden jump in plans to use online staffing. Ten percent of contingent workforce buyers planned to use online staffing in the next two years; that’s a jump from a similar survey in 2013 when only 3 percent planned to use online staffing over the next two years.

Online staffing is defined as an online platform that enables specific hirers and specific workers to enter into, complete and transact work arrangements.

The survey found that only 4 percent of CW managers use online staffing at this time. At the same time, hiring managers were much more likely than CW managers to use online staffing. Peter Cannone, CEO of online staffing firm OnForce, confirmed his company is seeing increased interest from enterprise users.

Enterprises have a growing need to bring in the appropriate skill sets on a short-term, outcome-based basis, Cannone said. And online staffing is helping drive a “highly efficient, optimized workforce and giving significant costs to the enterprise.”

OnForce allows companies to bring in talent for on-site work, and firms are using it to extend their W-2 workforces, he said. An example of on-site work might include cable television installation.

Cannone also said more workers are interested in freelance work. Many, younger people are more interested in freelance than being full-time employees, and many older people are turning to freelancing instead of fully retiring.

Elance-oDesk, one of the largest online staffing firms also reports growing interest.

Jon Diller, vice president of enterprise solutions at Elance-oDesk, cited three drivers for increased interest and adoption of online staffing among mid-market and enterprise companies:

  1. “Contingent Workforce leaders are recognizing that online staffing is the new frontier for finding the talent their organizations need and accessing them on-demand,” Diller said.  “Almost half of the world’s population is now connected to the Internet. And the people with the latest skills have essentially grown up online. Many are freelancing online even before graduating from college. Working online is the new norm. And this new breed of talent is simply not accessible through traditional staffing channels.
  2. “Beyond the ability to reach across the country or globe to find exactly the right skill at exactly the right time, the flexibility to ramp up and down as needed with a bench of pre-qualified professionals, coupled with the speed to value achievable through online staffing has captured the interest of these same leaders who must innovate just to keep pace with the changes around them. 
  3. “Our data also shows that contingent workforce leaders are increasingly dissatisfied with their current solutions for working with independent workers. These individuals cannot be managed like vendors, nor can they be managed like FTEs. Online staffing provides the right solution to engage with this workforce efficiently and in compliance.”

Elance-oDesk reported $231 million in online work spend from the U.S. between January and May, an increase of 29 percent over the same period last year. The online staffing firm estimates total U.S. spend will reach approximately $500 million for full-year 2014 with total global spend reaching $930 million.

Another online staffing firm, Freelancer.com, had also reported quick growth recently. The firm reported 2013 net revenue rose 77 percent to AUS$18.8 million (US$16.7 million)

“We believe, that in time, it is inevitable that a global marketplace for services will emerge, that will be of a similar size and scale as global marketplaces for products like eBay, Amazon and Alibaba,” Freelancer CEO and Chairman Matt Barrie said in a press release.