Staffing platforms are quickly appearing on the radar screen of agencies serving a multitude of industries. Like all businesses in the Covid Economy, staffing owners are quickly working to implement app-based worker deployment. But what does this really mean to the 26,000+ small/midsized agencies throughout the United States?
This type of technology is referred to in a variety of different ways: “Staffing App”, “Staffing Platform”, “On-Demand Staffing”, “Talent Marketplace”, “Curated Talent Pools”, and the list goes on.
Irrespective of what you call it, we need to start the conversation with an uncomfortable reality for staffing businesses utilizing the traditional method of deploying temporary labor. Regardless of geographic location or vertical market served, staffing platforms will soon be everywhere. As a point of comparison, Uber started in 2009 and ten years later they served 10,000 cities around the globe. Platforms that enter new industries are virtually undefeated in head to head competition with brick/mortar businesses, with incumbents usually facing a significant hit to revenue and client retention as a result of the battle.
The reasons for this disruption go far beyond the ability to communicate with workers via smartphone, although smartphone friendly connectivity of work opportunities is important given how tightly linked people are to their devices. Beyond easy notification, the competitive advantages provided by platforms go much deeper than simple text messages or push notifications to the phone of a temp worker.
Where the traditional model of quality control leaves off
One example where the long-established model of contingent staffing is at a severe disadvantage to platforms is in the form of quality control. In the conventional model, identifying top/middle/bottom performers among a group of temporary workers is usually a complex and time intensive process. It can involve constant direct client communication, never-ending surveys, sophisticated performance management software, and old-fashioned gut feelings. This burden increases with growth, as the complexity of quality control increases as more workers are deployed.
But here lies the shortcoming of the traditional model, even with robust effort: Few, if any, of the performance metrics captured pertaining to a specific worker will be disseminated in a useful way to other clients which subsequently utilize the same worker. This lack of transparency is a significant missed opportunity to create value.
Where the platform model picks up
In comparison, the platform model gets smarter and more valuable over time. This happens because integrated ratings by both sides of the platform create social currency, usually in the form of star-ratings and user reviews. Granted, the phrase “social currency” sounds like an asset of little real value, especially when we think about it from the perspective of social platforms like Facebook and Instagram. But social currency has a completely different value on other types of platforms. For example, when choosing between two equally priced sellers on a retail platform like Amazon, buyers will almost always select the seller with the better ratings and reviews. In fact, some buyers will pay a premium for the seller with higher ratings and the reassurance provided by the inherent quality control of increased social currency.
The same quality control dynamic applies to talent platforms like staffing. Top workers are identified in real time, eventually rewarding them with additional opportunities to work, repeating a virtuous cycle. It also works in reverse in a vicious cycle, where lower rated users get fewer opportunities, and eventually remove themselves from the platform. This becomes important for retention because a user’s body of work is not portable, meaning if the worker leaves the staffing platform for another company, they lose their valuable social currency. This becomes a tremendous opportunity for top performers to stay. In other words, this shared knowledge is a unique asset to your exclusive pool of workers and clients.
This is just one of many points of leverage that platforms have over traditional businesses in head-to-head competition and why it changes the game in every staffing market. In a competitive rivalry, it is no longer comparing apples to apples. It becomes more like comparing apples to fruit salad!
Platforms: No need to beat ‘em when you can join ‘em
Let’s reimagine the art of worker deployment together. Layering Arrived technology provides our clients with a fully branded app in the Apple App/Google Play store, right alongside the big national firms. I’d like to help staffing agencies of all sizes to adopt a mobile platform on their own terms. At Arrived, we design our technology to fit our clients’ existing processes, instead of making our clients change their processes to fit our technology. Adopting our digital offering helps win new business, retain existing clients, adapt to changing worker expectations, and adds recruiter efficiency. If you want to know more or even just discuss market conditions and strategy, grab some time on my schedule here.
-Tosh