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Saying They Want to Modernize Staffing, Three Companies Try New Models

by
Todd Raphael
Feb 9, 2011, 1:42 pm ET

You may have heard about companies like CloudCrowd and concepts like microwork that involve new ways to staff; now, there are several more companies trying to shake up the field. They’d like to revolutionize the already-strong contingent staffing industry and in some cases the whole staffing field, making it more Internet-based, more cell phone-based, and just more sophisticated. Even 63-year-old Manpower’s getting into the act.

Three of the newer players, all based in California, include:

Readyforce: It says it is “leapfrogging ‘old school’ staffing agencies and making transformational changes to a $300 billion industry that has not seen meaningful business practice and infrastructure change in decades.” Ouch.

The omnipresent Craig Silverman is the VP of Sales for Readyforce, which has been quietly doing a private beta test in San Francisco. It launched the private beta January 17, but had been operating last year even more quietly, and under a different name. “We’ve raised a raised a ton of capital,” Silverman says. About $14.5 million, actually, and the company is hiring.

Silverman describes Readyforce in a number of superlatives: it is the “staffing agency of the future” and “there’s no other staffing agency like us anywhere.”

Readyforce will talk to an employer about the jobs it has open. Then, it’ll go out and find people through social media and other means, and screen them to figure out who’s best. The screening includes a video interview; Silverman says they’ve interviewed 500 people for inside sales jobs, for example, over the last 90 days. Readyforce presents employers with the top three to five people, showing employers a profile of the person, a 20-minute interview, and a highlight reel.

A typical recruiting agency, Silverman says, might get 1,000 applicants, not totally know how to winnow them down, and not do nearly the presentation to customers.

Last year, almost all the company’s money was coming from contingent employee staffing. Now, it’s closer to 50-50 contingent employees and placement. “We’ve been doing a lot of experimenting,” he says, “figuring out what we want to be when we grow up.” It’s hoping to roll out more publicly soon, and then to other geographies beyond Northern California.

WorkersNow. Founded by Stanford alums, it’s focusing on the construction industry. I suppose you could call it a cloud-based temp company. “No need to wait at a store every morning,” it tells job candidates. “Everything is done through text messages & e-mails.”

Employees apply mainly online, and WorkersNow runs a background check. Employees can build up a profile to showcase their work, which the employers view, showing such information as whether past employers would hire them again. They check in and out of the job using a cell phone.

Employers pay a rate that includes the person’s wages, as well as taxes, workers’ comp, and a fee.

The company (formerly called WorkerExpress, wrapping up a name change due to trademark issues) was selected as the winner of a technology startup contest in northern California last year, whose judging panel included TiVo recruiting director William Uranga. While other companies in the contingent staffing industry are also moving to higher-tech processes, COO and co-founder Joe Mellin says this one’s different because it’s most concerned about a “great fit between employer and worker.” Revenue is doubling every two months, and Mellin says he’s about ready to expand throughout California, not just the north.

Emergent. Unlike WorkersNow, it’s not a temp agency. It doesn’t recruit. It acts as an employer for contingent employees for other companies. This is what a Manpower or an Adecco can do themselves — they put people on their payrolls, with the employees of course spending their work days at a client’s location. But Emergent hopes to do for small staffing companies what’s not so easy for them without the infrastructure and knowledge to handle all of what’s involved in employing someone. Emergent handles (well, hopes to handle; it’s only now getting started, and will launch an expanded website any day) things like onboarding and workers’ comp for contingent employees.

The company’s president, Bill Inman, lives in Manhattan Beach, California, and is part of a team giving birth to Emergent while working for an unrelated show-biz-related company called Entertainment Partners, in Burbank.

Inman has previously been involved with companies you may know — CareerLifeTV and Ensemble Chimes Global, for example — and around 1999-2000 was involved in launching Hiring Link, an applicant tracking system where companies would share pools of candidates.

Inman thinks recruiting someone and employing someone should be separate activities in contingent staffing. “The industry,” he says, “is ready to go through a dynamic change.”

This article is provided for informational purposes only and is not intended to offer specific legal advice. You should consult your legal counsel regarding any threatened or pending litigation.

  1. Maureen Sharib

    I’m curious what the “other means” Readyforce will be using are.

  2. Kimball Norup

    This is an interesting article…the staffing industry has much room for innovation. The contingent workforce will naturally grow as the very nature of work evolves towards becoming more project based. Those companies that can help make the connection between able worker and company need will provide value and grow as a result.

    One other point: Emergent is hardly a new or innovative business model. Companies like Collabrus (www.collabrus.com) have been providing employer-of-record services for companies that source their own contingent workers for years.

  3. Hayes Milani

    Thanks for sharing. It is always good to see what entrepreneurs are doing. It is clear that technology will help innovate and reinvent the staffing and recruitment industry. The million dollar question is who can fuse technology to our industry.

    JobJobHealth

  4. Todd Noebel

    I know I’m being picky, but not sure I so much see innovation in recruiting models as much as incorporation of existing technology.

    That said, the staffing industry does need to better deploy technology. Hopefully they’ll meet their clients where they need it.

  5. Brian Kevin Johnston

    Todd- As always, GREAT article, well written, and action pact content… I have used the Emergent model earlier in my career with CORP/CORP, H1B, and 1099′s. Giving up a small piece of the pie, to mitigate risk, was huge.

    I would be surprised if the Readyforce “buzz” is real, and will admit my claim on this forum, should they revolutionize staffing..

    You can put lipstick on a pig, but guess what, it’s still a pig..

    Best to ALL, Brian-

  6. gregg dourgarian

    Todd
    As exciting as it is to see startups in the staffing space, I have to agree with Brian’s sentiment that the unsubstantiated “revolutionizing”, “only” and “first ever” adjectives have the unintended effect of reducing trust.

    You equate “old school” with outmoded, but we’re seeing the most innovation happening in longstanding entities like Manpower, Michael Page, and Link Staffing. Not only are they leveraging the best of mobile and video, they’re eliminating 100% of the paper and backoffice overhead as well.

  7. Todd Raphael

    Gregg, I don’t equate the “old school” companies with outmoded — that’s just a quote from Readyforce. Having said that, I agree with Kimball and Todd that the industry is ripe for innovation and new technology.
    Meanwhile, I got an email from another company that falls in this relatively-new-staffing-company-models genre … SkillGalaxy. From their email: they are “a web based staffing marketplace service (like Amazon or Priceline) that enables its registered clients to find candidates faster and cost-effectively … This service allows procuring contract and permanent candidates through SkillGalaxy with the assistance of its registered suppliers/recruiters under our quality control … it combines features of Job-board, VMS, ATS and Staffing Marketplace.”

  8. Morgan Hoogvelt

    “Silverman describes Readyforce in a number of superlatives: it is the “staffing agency of the future” and “there’s no other staffing agency like us anywhere.”

    If this is the future, then what was the past? Myself including thousands of other recruiters across the country and world already use and have been using these techniques they are rolling out.

    And to this point – “A typical recruiting agency, Silverman says, might get 1,000 applicants, not totally know how to winnow them down, and not do nearly the presentation to customers.” – This is a very strong and weak generalization. Great recruiters and agencies have been using the standard process of presenting top 3-4 individuals for years.

    It will be interesting to see how they will really differentiate themselves. As of right now I see nothing new that this company will offer or that will make them stand out.

  9. Keith Halperin

    Technological advantage is fleeting and easily purchased/copied. I await the Filipino and Indian firms going after the lower end of the contingency market and making money charging 5-10% fees. High-quality contingency work is something that is rare, should not be farmed out lightly, and is worth 30% or more. While better tools may play a part, I feel the most significant component is having recruiters who are better at opening, maintaining, and closing than other companies.

    Keith “Not a 3PR” Halperin

  10. Michael Burns

    WOW. A company that’s going to talk to me about my open jobs, then find potential candidates using social media and other means, assess them, and present me with a shortlist of the best people.
    That’s revolutionary! It completely differentiates them from other recruitment companies.
    I can’t believe Adecco, Randstad and Manpower haven’t thought of that!

  11. Keith Halperin

    @Michael: Well said.

    Keith

  12. Evan Donaldson

    I have been trying to offer alternative and innovative programs to my clients for more than 3 years. One of the realities is that companies say they want something different, but they are afraid to switch! Unless I am selling to a CEO or CFO, the chance of success with any of our new programs (which I do firmly believe will save companies money, give them much better candidates, and provide them with scalable flexibility,) is very small. They just can’t see past the traditional methods of: 1) internal HR, 2) Contract recruiters, 3) contingent staffing, or 4) Every manager for him/herself.

    The reason the industry hasn’t changed and innovated has as much to do with the inertia and fear of our clientele as anything else.

  13. Todd Raphael

    Evan, fear sounds like a good argument against early adoption, but what about slightly later adoption? In other words, over time, as your clients see others having success with alternatives (think online recruiting when it began) don’t they have more fear of being left behind than they do of failing because they’re adopting something new that won’t work?

  14. Evan Donaldson

    It is true that it will be easier over time, and after successes, to offer these programs. I have had some successes as a result of previous successes. However, don’t underestimate fear of change! Previous successes havn’t made it all THAT much easier. I have seen companies that absolutely admit that one or another of my programs would be better than what they are currently doing – stick with what they are doing! Human nature shouldn’t be so mind-boggling to a human being like me, but I still can’t help be amazed….

  15. Keith Halperin

    @Evan: Well put. The GAFI Principles of Recruiting Motivation: Greed, Arrogance, Fear, and Ignorance/Incompetence are very strong in many organizations.

    @Todd:
    I suspect that there is some sort of Gladwellesque “tipping point” working here where nothing much happens until either the “Cool Companies” or enough of the uncool ones (though I’m cluelss how THAT would happen) adopt it, and then everybody jumps on.

    Keith “Not One of the Cool Ones” Halperin

  16. Todd Raphael

    The one I mentioned called “WorkerExpress” that became “WorkersNow” is now called “Proven” (proven.com)

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