It’s never been more exciting or challenging to be a talent leader. Talent scarcity is the new norm and technology changes are pushing firms to innovate. The demand for contingent workforce participation is rising and it’s no longer limited to the traditional staffing company delivery models that historically served this supply chain.
Recruiting leaders tasked with making decisions around technology face a crowded landscape with thousands of point solutions. Amidst the noise, transformative technologies are reshaping how companies find and recruit talent.
This article outlines four ways technology is reshaping the talent supply chain and its impact on the contingent workforce.
The Talent Supply Chain Deconstructed
The talent supply chain encompasses a company’s entire workforce, internal and external, along with the infrastructure, processes, and technology for their sourcing and management. It includes full, part-time and seasonal employees, temporary workers, consultants, freelancers, contractors, directly sourced temporary workers, and even in some cases, bots.
On the infrastructure and process side of the talent supply chain, most large organizations maintain two separate recruiting functions and talent supply chains. One is for internal “employees,” often led by HR, and the other is for external or contingent workers led by procurement, sometimes with Managed Services Provider (MSP) support. Each function has its own dedicated talent supply chain, infrastructure and processes.
The question is, which technologies affect these supply chains, and how do they impact your business?
The Talent Acquisition Ecosystem Deconstructed
Thousands of talent acquisition tech companies exist, mostly offering niche solutions for specific recruiting challenges. For example, there are more than a hundred assessment technology vendors, hundreds of online work platforms and thousands of job boards. In fact, Talent Tech Labs’ original genesis was to demystify a noisy yet transformative market landscape.
In this article, we outline four emerging technology trends and how they are changing the world of recruiting.
The Four Big Trends
Temporary Labor Marketplaces Provide On-demand Access to Global Talent
Temporary labor marketplaces—a sub-vertical of online staffing—are digital platforms that connect workers with work. The totality of the work is transacted and managed through the platform. Most platforms specialize in supplying remote workers for specific roles (e.g marketing, design, sales, software engineers) though some are focused on location-specific work (e.g. Wonolo/light industrial, Trusted Health/nurses).
The platforms’ appeal is twofold. They remove friction by aggregating the supply and demand for labor in a marketplace, connecting hirers and talent directly. Additionally, many platforms enable remote work at scale and provide access to talent/work on demand, which has broader implications for how companies may structure their workforces moving forward. Leading platforms like Upwork, Fiverr, and Freelancer have tens of millions of registered workers.
We believe Temporary Labor Marketplaces have the potential to significantly transform the talent supply chain, and we anticipate their continued substantial growth.
Direct Sourcing Platforms
Direct sourcing platforms represent a combination of technologies designed to help firms supplant their staffing firms. While some “platforms” exist for direct sourcing (e.g. TalentNet, LiveHire, Twago, Shortlist, WillHire, Kalo, TalonFMS, YOSS), many current market solutions combine technologies to form a sourcing engine. Key components include programmatic advertising, matching technology, a navigable database with tagging/talent pooling, and recruitment marketing tech.
Client demand remains strong, though there are fewer implementations than you might expect, given the cost saving. We have seen direct sourcing programs supplant up to 40% of the contingent labor spend, posing significant disruption to the existing supply chain.
If direct sourcing is so transformative, why isn’t it more widely adopted? The challenge lies in the fact that direct sourcing programs require ongoing program management. This may be why many of the “direct sourcing” implementations have come to market by third-party service providers such as MSPs and RPOs.
This service/technology partnership leads us to the next two trends.
Service Providers Becoming Technology Brokers
Similar to larger tech vendors providing “micro-services” on their platforms (third-party services offered through a “marketplace”), some service providers (RPOs and MSPs) are curating “out of the box” tools for managing clients’ recruiting programs. As leveraging recruitment technology becomes more important, offering expertise, solutions, and best practices becomes a strategic differentiator.
In recruitment, a “technology stack” comprises various technologies commonly deployed together. We anticipate a future where intermediaries curate, purchase, bundle, and deploy talent acquisition technologies. By adding an effective service layer to the underlying tech stack, these intermediaries could compete with traditional staffing companies, offering a more cost-effective delivery than by traditional means.
Total Talent Management
Total Talent Management refers to the ability of organizations to holistically understand and make decisions about their total workforce at the most strategic level, inclusive of all worker types (internal and contingent). Simply stated, it is the technology and process-led convergence of the two talent supply chains. Unfortunately, total talent management is often just a buzzword for most organizations. The most “progressive” real-life examples involve blending MSP and RPO services under a single contract.
There are many benefits to managing a workforce in totality. Yet, implementing total talent management faces challenges due to historical duty divisions (e.g., HR for full-time, procurement for contingent). Our research indicates convergence, but a larger hurdle is the lack of a holistic system of record/process for total talent management. Progress is emerging in this area as well. Large HR information systems and large enterprise IT systems for managing employee data are investing in contingent workforce management capabilities (e.g. Workday’s product developments and ADP via its WorkMarket acquisition), while startups like Utmost are building solutions to bridge the gap between disparate systems.
Conclusion:
In business, as in biology, the race belongs not to the strong, the swift, or the intelligent, but to those that adapt the quickest to change. The world of recruiting is in the midst of a technological revolution, which is transforming how companies source talent and how talent engages with companies; in some cases technology and broader societal shifts are transforming the very construct of “work” itself.
Leading in the talent industry is both exciting and challenging. While there are more tools available than ever, and substantial capital backing them, the ability for leaders to spot emerging trends and act on them intelligently will likely be the key factor differentiating companies that thrive in the years to come from those that go extinct.
About Talent Tech Labs:
Talent Tech Labs is an independent, unbiased research and advisory firm focused exclusively on Talent Technology. Since 2014, our experts have evaluated thousands of technologies and offered actionable insights into applications at every stage of the employee lifecycle. We help buyers and users of talent technology solutions make talent technology decisions, gain a better understanding of the complex market, learn about future trends shaping the market, and provide them with the strategic direction to transform their business through the intelligent use of talent technology today and in the future. Our opinions, evaluations, benchmarks, technology taxonomy, and research are valued by buyers and builders of technology, as well as investors who fund future developments in the field.
