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The Digital Evolution of the Contingent Workforce Supply Chain

While perusing the latest news on Contingent Workforce thoughts, I ran across Andrew Karpie’s excellent piece on Digital Evolution. I felt compelled to voice my take on the subject and give you a brief snapshot of Karpie’s well-developed case for how recent digital technologies will be an evolutionary and not revolutionary.

 Current state of the Contingent Workforce Supply Chain

Where we've been

Key points:
  • This supply chain has been around for more than 15 years and many of the processes and components are deeply entrenched.
  • As this supply chain model has become institutionalized, innovation has suffered in lieu of business as usual. The lack of innovation reinforces outdated restrictive cost structures and limits the accessible workforce.
  • The horizontal gray bar across the top represents a glass ceiling limiting new avenues of accessing potential workforce.

The evolution

What's Changing?

Key points:
  • Like most other industries, the evolutionary change is technology. Recently a number Digital Platforms have spawned a number of successful ecosystems.
  • Ecosystems are integrated platforms that enable different populations of users (e.g. suppliers, consumers, seekers) to come together to accomplish mutually beneficial transactions.
  • Amazon, eBay, Uber, Airbnb are examples of how intermediary platforms have created an ecosystem connecting supply with demand.
  • Examples of the Digital Platform and Ecosystem Intermediation in the Workforce Solutions arena would be Elance or oDesk (now merged as Upwork). SpendMatters describes this Digital Platform as Work Intermediation Platforms (WIP).
  • WIP – “These platforms have been able to engage workforce populations that have not been previously accessible (e.g., talent in other countries). They have created new efficient ways of executing
    • (a) work arrangements (direct sourcing to electronic payment)
    • (b) performance and fulfillment of work/services (e.g., online end-to-end)
    • (c) new models of engaging workers (e.g., crowdsourcing).”

The ripple effect of digital technology

Also, Digital Transformation of Traditional Supply Chain

Key points:
  • Contingent Workforce professionals have little knowledge or interest in Work Intermediation Platforms (WIP).
  • In the past two years interest in WIPs have increased with an acquisition of OnForce by a top staffing business and investments by staffing firms in twago, Gigwalk, Gengo, and 99designs.
  • “By 2025, it is plausible that we will see a contingent workforce intermediation space that consists of 3 segments:
    • (1) viable WIPs and ecosystems with integration points in different areas of the existing supply chain (such as VMS),
    • (2) Viable traditional supply chain players that have innovated and produced new useful service offerings for their clients (some actually becoming some form of work intermediation platform)
    • (3) existing supply chain players that have not adapted and innovated and have begun to attrite from the space.”
  • “The take-away here is that the emergence of WIPs and ecosystems will gradually bring about a digital transformation of part of the existing supply chain, versus widespread disruption. We believe this is what to expect.”
Final comments

It is my belief that technology as the evolutionary driver is here to stay. Contingent Workforce Solutions companies need to either continue to evolve, innovate and implement new strategies or attrite from the space.

Whether or not the future of staffing is centered on Digital Platforms or not, is Platform models can be challenging to design and execute. On the back end, they require seamless integration of many various state of the art technologies.On the front end, the self-service User Interface needs a compelling value add outcome component for many different user populations.

Only with effective delivery of these basic propositions can critical mass be built. The ecosystem critical mass is necessary to realize the leverage of marginal costs versus revenue. Building a profitable platform and resulting ecosystem makes good business sense, but is easier said then done. Hopefully, when it is built, they will come…

Gone are the days where Contingent Workforce Solutions providers use technology to conduct business. In the near future, technology companies will deliver Contingent Workforce Solutions. CXC Global prides itself in balancing technology with Contingent Workforce Solutions. Check out our innovative and compliant services.

If this blog post whets your appetite, discover more on “The Digital Evolution of the Contingent Workforce Supply Chain: What does it mean?”

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