The Rise of Crowdsourcing

The Wired magazine article "The Rise of Crowdsourcing" reads, "Remember outsourcing? Sending jobs to India and China is so 2003. The new pool of cheap labor: everyday people using their spare cycles to create content, solve problems, even do corporate R & D."

The internet, low cost equipment and access to information, and professional and hobbyists who have extra 'cycles' to burn have become low cost resources for corporations big and small. Here are some crowdsourcing examples (from Wired magazine):

Lego
The beloved toy company encourages its fanatical customers to design everything from robot operating systems to Lego sets.

SportingNews.com
Last summer, the sports media company made blogs and social networking the foundation of its Web relaunch. Traffic and ad revenue soared.

Second Life
Residents of this popular online world put in more than 22,500 hours of “work” each day, stocking the virtual world with everything from ninja armor to giant tree houses.

Threadless.com
This hipster company prints T-shirts with designs submitted to its Web site. It expects to earn $20 million in revenue this year.

What are the rules of Crowdsourcing? Here are 5:

1. The crowd is dispersed
People spread around the world can perform a range of tasks – from the most rote to the highly specialized – but this would-be workforce needs to be able to complete the job remotely.

2. The crowd has a short attention span
These new workers find time after dinner and on weekends. So jobs need to be broken into “micro-chunks.” Most tasks on Amazon Mechanical Turk, for example, take less than 30 minutes to complete.

3. The crowd is full of specialists
For Procter & Gamble, the crowd is the world’s scientific community; for VH1 it’s any ham with a camcorder; for iConclude it’s the handful of professionals with experience troubleshooting Microsoft’s server software.

4. The crowd produces mostly crap
Networks like InnoCentive, Mechanical Turk, and iStockphoto don’t increase the amount of talent – they make it possible to find and leverage that talent. Any open call for submissions – whether for scientific solutions, new product designs, or funny home videos – will elicit mostly junk. Smart companies install cheap, effective filters to separate the wheat from the chaff.

5. The crowd finds the best stuff
Even as a networked community produces tons of crap, it ferrets out the best material and corrects errors. Wikipedia enthusiasts quickly fix inaccuracies in the online encyclopedia. Viewers of Web site YouTube find the one tastelessly funny amateur video from the 10 that are merely tasteless.

The Rise of Crowdsourcing. [Wired Magazine - Jeff Howe]

5 Rules of the New Labor Pool. [Wired Magazine - Jeff Howe]

Look Who's Crowdsourcing. [Wired Magazine - Jeff Howe]

Workforce Vision * Post: Bill Inman * Human Capital * Contingent Workforce * Globalization * Trends * Outsourcing

U.S. Contingent Workforce Statistics

Jobs

Staffing companies match millions of people to millions of jobs.

• 2.9 million people per day are employed by staffing companies.
  
• 12 million temporary and contract employees are hired by U.S. staffing firms over the course of a year.
  
• 79% of staffing employees work full time, virtually the same as the rest of the work force.

Flexibility

The staffing industry offers flexibility to both employees and companies. People can choose when, where, and how they want to work. Companies can get the skills they need to keep fully staffed during busy times.

• 66% of staffing employees say flexible work time is important to them.
  
• 64% of staffing employees report that their work gives them the scheduling flexibility and the time for family that they desire.
  
• 90% of client businesses say staffing companies give them flexibility to keep fully staffed during busy times.

Bridge

Temporary and contract work provides a bridge to permanent employment. People can try out a prospective employer and showcase their skills for a permanent job.

• 88% of staffing employees say that temporary or contract work made them more employable.
  
• 77% of staffing employees say it’s a good way to obtain a permanent job.
  
• 80% of staffing clients say staffing firms offer a good way to find people who can become permanent employees.

Choice

Many people choose temporary and contract work as an employment option. They can select their work schedules and choose among a variety of diverse and challenging assignments.

• 67% of staffing employees say choice of assignments was an important factor in their job decision.
  
• 23% of staffing employees have little or no interest in a permanent job—they prefer the alternative arrangement over traditional employment.
  
• 33% of staffing employees say they work for a staffing company because they like the diversity and challenge of different jobs.

Training

The staffing industry provides free training for millions of temporary and contract employees to help meet today's demand for skilled workers.

• 90% of staffing companies provide free training to their temporary employees.
  
• 65% of staffing employees say they developed new or improved work skills through their assignments.
  
• 40% of staffing employees say they choose temporary or contract work as a way to obtain employment experience or job training.

Staffing Statistics - Staffing Facts. [American Staffing Association]

Workforce Vision * Post: Bill Inman * Human Capital * Contingent Workforce * Globalization * Trends * Outsourcing

Companies, Compliance, and the Contingent Workforce Statistics

What are companies thinking about their contingent labor? Yves Lermusiaux provides the following statistics:

• 92 percent cite inconsistent costs and a lack of price control a primary “pain point” with their current contingent labor workforce.

• 69 percent are highly concerned about their organ ization’s compliance with industry regulations such as Sarbanes-Oxley, SEC, FDIC, etc.

• 66 percent are highly concerned about employee misclassification and co-employment risk.

• 50 percent do not know if their company has ever defended itself against a lawsuit associated with contingent labor.

• 33 percent could not report which, if any, department holds primary responsibility for minimizing their company’s risk and liability as it relates to contingent workforce management.

• 21 percent could not estimate their company’s current annual spending for contingent labor in the U.S.

• 18 percent could not estimate the number of suppliers currently providing contingent labor to their company.

Contingent Workforce Management Trends. [Sarbanes-Oxley Compliance Journal - Yves Lermusiaux]

Workforce Vision * Post: Bill Inman * Human Capital * Contingent Workforce * Globalization * Trends * Outsourcing

Tracking the Rise of Global Contingent Workforce

Steve Marlin of Global Services writes, "CONTINGENT workers, also known as temps, part-time and contract workers, have long been a staple of the global labor force, providing a flexible and cost-effective means of smoothing out fluctuations in demand and production...Small wonder that companies are clamoring for ways to reduce the costs and improve the efficiency of their contingent workers."

"Beset by a lack of uniform hiring processes and procedures, minimal controls and high administrative costs, companies have found themselves in a quandary in managing contingent workers. And now that the contingent workforce has gone global, the level of complexity has ratcheted up, with a patchwork of labor laws, wage rates and cultural differences thrown into the mix."

In response to this companies are:

* Investing in processes and technology to meet demands for greater visibility into * Setting up master contracts with staffing-services companies to handle requisitions for every kind of worker, from unskilled to the most technically
* Implementing supply chain software to put in place the same controls over contingent-worker procurement as they have for indirect goods and services.
* Being challenged to bring consistent process, technology and program governance to a function that’s historically been decentralized.

Companies are taking these initiatives because they are looking to:

1.) Reduce the time for candidate-sourcing and filling requisitions was cited as a challenge by nearly half (48%) of participants in an Aug. ‘06 study by Aberdeen Group.
2.) Improve collaboration (48%)
3.) Obtain greater visibility into rates and processing costs (40%)
4.) Increase compliance and verify worker qualifications (36%)
5.) Reduce runaway spending (33%).


Tracking the Rise of Global Contingent Workforce. [Global Services - Steven Marlin]

Workforce Vision * Post: Bill Inman * Human Capital * Contingent Workforce * Globalization * Trends * Outsourcing

Vendor Management Standards Committee Formed

The Human Capital Institute and a coalition of seven contingent workforce industry vendors announced today the formation of the Vendor Management Standards Committee. Advancing best practices and benchmarks for clients, COMSYS, Beeline, Allegis Group Services, Bartech Workforce Management, Comensura, MyBizOffice and ProcureStaff joined forces with the Human Capital Institute to develop and publish best practices and industry standards focusing on vendor management.

Here are some quotes from press releases on the Committee:

• "There is a great deal of confusion among buyers and industry insiders as to what constitutes a Managed Service Provider (MSP). The vendor management industry lacks consistency or standards around the services it provides."
  
  
• "We continue to see a substantial increase in the use of vendor management systems, especially with large- and medium-size firms nationwide . "
  


• "The Vendor Management Standards Committee will help to establish base standards that will serve as a fundamental set of expectations for any buyer who contracts with an MSP that adheres to the standards. "

More information can be found at the following link:

Vendor Management Standards Committee Formed to Promote Contingent Workforce Industry Best Practices. [Human Capital Institute]

Workforce Vision * Post: Bill Inman * Human Capital * Contingent Workforce * Globalization * Trends * Outsourcing

U.S. Temporary Employment in Decline for 1st Time in 3 Years

Temporary help payroll growth, as measured on a 12-month trend, has been weakening steadily over 2006, and finally crossed the line into the negative zone in November, falling 0.8% from the year earlier. This was the first recorded year-over-year decline in temporary help payrolls since June 2003. Part of the reason for this decline is the effect of Katrina on previous year’s numbers. November 2005 saw a large increase in temporary help usage in the weather-beaten Gulf Coast. Nonetheless, even taking this liberal perspective, it remains that temporary help payrolls are also up less than 1% above pre-Katrina levels, so volume growth is unquestionably weak at best. On a month-to-month basis, temporary help services rose 0.2% from October, adding 4,800 jobs, the Bureau of Labor Statistics reported today.

Workforce Vision * Post: Bill Inman * Human Capital * Contingent Workforce * Globalism * Trends * Outsourcing

The Four Segments of the Contingent Workforce

Manpower's whitepaper "The Total Workforce" outlines their 'Four Segments of the Contingent Workforce'. The following diagram outlines these four areas and provides a useful reference to often often used terms "Temporary Employee", "Contractor", "Outsourced Employee", and "Consultant".

Click on the Image Above to View a Larger Size

The Total Workforce. [Manpower - PDF]

Workforce Vision * Post: Bill Inman * Human Capital * Contingent Workforce * Globalism * Trends * Outsourcing

Blue Collar Temporary Workforce To Continue Growing In 2007 Despite Moderating Economic Growth

Staffing Industry Analysts forecasts Temporary Staffing for Industrial Workers To Expand A Solid 5% Next Year After 7% Growth In 2006

The forecast states "the growth of temporary industrial jobs will be approximately the same as the overall growth rate of U.S. temporary workers. Temporary industrial jobs, which have been growing rapidly to keep pace with demand from largely cyclical industries, comprise 4% of the total industrial workforce. In 1980, less than 1% of workers in industrial occupations were employed on a temporary basis."

Staffing Industry Analysts CEO Ron Mester said, "Temporary industrial job growth is slowing somewhat as the economy moderates, but it will continue to grow solidly in 2006 and 2007. For job seekers, the opportunities are with every kind of employer – from small business to the Fortune 50. For employers, temporary workers will play an increasingly important role in remaining competitive in a global marketplace where employment needs change quickly."

Facts from the Forecast:

* The South and the Midwest are the geographic regions with the highest proportion of production and transportation jobs.
* The Sunbelt States have the highest proportion of employment in construction.
* Building and grounds-keeping employment is relatively strong in vacation and retirement metropolitan areas.
* Installation and repair employment is highest in the South. * Overall, industrial temporary staffing is expected to grow $2 billion to $28 billion in 2006.
* Industrial temporary staffing is the largest segment of the temporary staffing industry, employing roughly half of all temporary workers.

Blue Collar Temporary Workforce to Continue Growing in 2007 Despite Moderating Economic Growth. [Staffing Industry Analysts]

Workforce Vision * Post: Bill Inman * Human Capital * Contingent Workforce * Globalism * Trends * Outsourcing