Article First Published on the ATC hub on 9th August 2017– Contingent Workforce

Whether it’s storing all those holiday snaps that are filling up your mobile phone, watching movies online, attending webinars or making a secure online payment, ‘the cloud’ has become a vital part of our everyday life. If the hype is to be believed it could be the answer to our skills shortage woes too.

Available on-demand, flexibility to scale up or down, without infrastructure and maintenance requirements, the benefits of the cloud computing approach sound much like the benefits of contingent staffing. So it’s no surprise that the two have merged in the form of the ‘Human Cloud’, where jobs or projects are carried out on demand, from any location, through an online/digital platform.

Staffing Industry Analysts estimate between $47 to $51 billion U.S. dollars of ‘Human Cloud’ spend in 2016 and they expect this to grow further Human cloud landscape: 2017 update. Much like the growth of Statement of Work (SOW), cost is one factor driving this trend, with some companies opting to pay purchase orders once satisfied with work, rather than salaries. But, the availability of talent appears to be the key driver, as it opens businesses up to workers anywhere in the world.

But as regulation struggles to keep up with new forms of staffing, cyber security threats loom large and productivity and employee engagement levels can dwindle. Before you dive straight in, there are some important considerations to explore first.

Start small and defined

New methods require a significant leap of faith for hiring managers, particularly if they don’t hire often. When considering the Human Cloud, look for projects or tasks that are traditionally outsourced, or skills gaps, such as data validation or writing code.

Like any good project, you need to start with the end goal in mind and should define what you are trying to achieve. Once you’re clear on this you can begin to break it down into the separate parts and agree the kind of skills you’ll need, and thus which models and platforms will work best. Many of the platforms have developed around a specific niche and each has their own business model. In their Managing the Human Cloud article in the MIT Sloan Management Review Kaganer et al. categorise the major human cloud platforms into four business models:

• Facilitators;
• Arbitrators;
• Aggregators, and;
• Governors
   

Each has its own strengths and weaknesses that make it more appropriate for certain kinds of projects.

Be clear on who handles what

One of the great things about hiring through the ‘Human Cloud’ is the ability to discontinue quickly. If it’s not working out for either party you can end the contract and walk away. This doesn’t mean that all employment laws do not apply. Managing performance and risk again depends very much on which platform you have chosen to work with.

The basic premise is always: due diligence in the selection and good project management of non-employees. This means making someone accountable and being clear on who employs the worker. Many assume a freelancer agreement via these platforms means an independent contractor status, but this poses misclassification risks.

Review and promote best practice

Once you’ve managed to successfully resource your first project and see it through to completion you need to review what worked, what didn’t and share best practice. This is important not only for internal lessons but as ‘Human Cloud’ platforms act as communities for skilled talent it’s important for your employer brand too. As freelancers can work wherever and whenever they want, project reviews ensure your talent feels valued, not just another number.

It’s easy to see why a ‘Human Cloud’ approach can benefit both employers and workers looking for greater flexibility and reward for results. As with anything contingent staffing related there will be detractors, as your own employees wonder about the implications for their own jobs and your hiring managers worry about a lack of control. A controlled pilot could help you understand the issues and respond better, allowing you to plan for the implications of a large-scale rollout.

So whilst the ‘Human Cloud’ is challenging the traditional working model, it’s not the answer to all your skills shortages and contingent workforce needs yet. Some tasks lend themselves to some platforms better than others and like any workforce program there needs to be fixed processes in place to mitigate risks before diving straight in.

AUTHOR

Shane Little
Managing Director ANZ and APAC, Hays Talent Solutions
Having worked in the recruitment and staffing industry for 15 years, Shane has a track record of running successful staffing businesses across a variety of different sectors. Shane takes pride in his ability to identify and develop talent whilst at the same time creating lasting partnerships with his clients.

As Operations Director for ANZ and APAC at Hays Talent Solutions, Shane is responsible for the delivery of market leading Talent Solutions to a range of clients across Australia, New Zealand and Asia. This involves the leadership and development of talented sales, delivery and operational teams whilst maintaining senior client relationships. He has a unique insight into contingent workforce models having been involved in early stage PSL arrangements, first generation programmes and mature solutions looking to take the step into SOW management.