Why e-platforms are a force to reckon with
By Andrew Karpie
Years ago, job boards, and then vendor management systems, changed the way staﬃng ﬁrms do business. Now it’s clear that was just the beginning of a more fundamental development: “electronic platforms” are now a force causing disruptions, and promising new opportunities, in the staﬃng industry.
Generally speaking, platforms enable useful interactions and transactions among diﬀerent parties. A good example of a “physical platform” is a shopping mall. An “electronic platform” performs the same intermediary functions, but is based on information technology capabilities (for example, Amazon.com). “E-platforms” can radically transform physical processes and the form and substance of economic interactions, transactions and relation- ships, thus frequently altering or transforming whole industries.
For some time now, e-platforms have been insinuating themselves into the staﬃng industry in a variety of ways: ﬁrst as job boards, then as vendor management systems. Finally, social networks have recently taken center stage, presumably expanding the ways in which talent can be cultivated and engaged.
While staﬃng ﬁrms have adjusted to working with job boards, VMS has signiﬁcantly disrupted the way staﬃng ﬁrms conduct business. Platforms like oDesk and Elance, moreover, even eliminate staﬃng ﬁrms from the equation, putting buyers in direct contact with talent. These platforms also provide the added value of “virtual workplaces” for many types of work.
New Forms of Work
E-platforms are not only altering the established talent supply chain; they are also radically transforming the forms and nature of contingent work engagements into something approaching “Talent as a Service” (TaaS) or “talent on-demand utilities.” Furthermore, by supporting social dynamics and communications, e-platforms are also making possible entirely new forms of contingent work (e.g., crowdsourcing, or collaborative problem-solving by virtually connected talent and expertise, incented by the possibility of contingent rewards that are much higher than average salary or wage compensation).
Whether aﬀecting the speciﬁc relationships between buyers and sellers of contingent labor or the way in which contingent work is organized, carried out and compensated, it is clear that e-platforms — as exchange platforms, social platforms or both — have been and will continue to signiﬁcantly trans- form the staﬃng industry and many (if not most) of the ﬁrms in it.
Change and Opportunity
While seen by staﬃng ﬁrms as a wide range of disparate developments, there is really an underlying unity for these many diﬀerent developments: the emergence of e-platform as an economic structure and a powerful force driving industry transformation and innovation, potential disruption and opportunity.
In addition to bringing potentially disruptive or even value-destructive change and innovation to business relationships and practices, e-platforms can also open up new opportunities to deﬁne and expand markets, service oﬀerings, revenue sources, et al. Correspondingly, an increasing body of research is showing that platform models are valued more highly as assets than non-platform models (for example: Outsell found that a $100 million information services company that generates 25 percent of revenue from platform services has a valuation of $62 million higher than a company that does not have platform services).
No wonder forward-looking staﬃng ﬁrms have begun to take clear account of e-platforms in the planning, conduct and positioning of their businesses.
E-platforms are real and coming home to roost in the staﬃng industry. In planning and conducting business, most staﬃng ﬁrms will need to take account of the strategic signiﬁcance of e-platform business models, both outside and inside of a ﬁrm’s boundaries.
Even if, as in retail (with Amazon), the industry transformation may not be total (after all, there are still shopping malls), it will be signiﬁcant and eventually pervasive. The adoption of “platform thinking” and understanding of e-platforms may very well become a necessary condition for survival in the 21st century contingent staﬃng businesses.
Andrew Karpie is a research analyst at Staffing Industry Analysts. He can be reached at email@example.com.