Online Staffing Marketplace: The latest Craze in CW self-sourcing
What is an online staffing marketplace and how can this modern approach help your organization recruit top talent more cost-effectively and in turn help generate revenue? Why this will be an essential cornerstone of successful organizations’ CW strategy in 2020 and beyond?
In this helpful and relevant, Contingent Workforce Self-Sourcing episode from SIA’s CWS Summit, North America, September 15-16, 2020, Kashif Aftab, Founder and CEO at Skillgigs.Inc shares his experience on 360-degree insights about the Online Staffing Marketplace and how it delivers results.
It was just one of those busy Mondays. I had an important flight to catch that afternoon to New York, but I still had a few loose ends to take care of at the office. I get a call from one of my senior recruiters. She sounds super upset. I find out that she’s been yelled at by one account manager at one of our MSPs. She tells me all that she was doing was trying to help out by quoting the nursing manager on the floor because the nurse was supposed to be on the shift, couldn’t be, because of an emergency. I calmed her down at first and then call the MSB account manager and kind of talked them into apologizing to my senior recruiter, smooth things overall in all. It was just a misunderstanding. But regardless it left me thinking, why do some in our industry treat the staffing suppliers, so adversely? “Shouldn’t the relationship be most symbiotic, for the good of everyone involved?” I still had that flight to catch in New York and right when I’m about to stop packing up to head to the airport, I see a call coming in from a local customer of ours, a large hospital system in Houston. I pick up the phone and it’s the director of procurement and he’s a bit frantic. It sounds like the hospital had a new floor opening up in a month or so. And they were short of nurses to staff the floor.
Now everyone understands how critical it is to have the hospital floors fully staffed. I promised the gentlemen that we will do whatever it takes to help them out and I’ll have my team find some travel nurses ASAP for him. So after I hung up the phone, I call our account manager who manages this facility on our team, explained to him how urgent the need was and that we needed to deliver. I got a personal call from the director, so it was extremely urgent and ASAP, kind of a wreck. In the back of my mind, I knew this wasn’t going to be easy.
I looked at my watch again and it’s almost time I need to leave for the airport. I pull up my phone and I call an Uber. It was my second or third time taking an Uber. I was just awed at how simple the experience was. In the past, I would have to call a taxi dispatch service, wait and hope the taxi would there be on time, and also wish that it was a clean ride. Uber driver was friendly and polite. His car was clean and he offered me a water bottle. Such a smooth and seamless experience, both for the driver and the customer.
I’m now on the airplane heading towards New York and I’m deep in thought. I can’t stop replaying the two incidents that happened that morning. Suddenly it hit me — Isn’t Uber solving a demand and supply problem in transport? I started comparing my Uber experience and the experience of the staffing and contingent workforce for industry users have. It was just a night and day difference. At that moment, I just knew I had to do something about this. And that’s when the first thought hit me. “Why can’t there be an online staffing marketplace where the supplier and buyer of the staffing services could interact as efficiently as I was with Uber?”
On that trip, I decided that I’ll build an online staffing marketplace.
Groundwork and the achievement
So now it’s six months later, I’ve been working hard at the idea and to start off I spend some time looking at various internet applications, such as Amazon and Netflix. I take copious notes taking apart the user experiences these apps offer their users and matching them to the problems I want to solve for our industry. Frankly, it was quite shocking, once one takes stock, just how far ahead these other industries were versus ours. We started building a prototype app and Skillgigs.com was born in late December of 2013. We launched the prototype to a select group of tech professionals in Silicon Valley, hoping against hope that at least a hundred will sign up in our beta version, 24 hours later, over a thousand candidates that signed up, not just any candidates, some of the most highly sought after IT professionals from established companies, such as Facebook and Google.
Now the icing on the cake was that there was no recruiter involved who was recruiting these candidates and getting them to buy into our open jobs. “Did we just discover it was possible to get professionals looking for contract work, to sign up and engage with a hiring manager without actually using recruiters?” The wheels had started to turn. My CTO, a senior developer and myself buckled down to see if we could turn this into a viable business, similar to an Amazon or Uber. The only difference being we were talking about the contingent workforce. Here was the original vision – we wanted to build an online staffing marketplace, where job seekers post their listings, an idea I borrowed from eBay, and they would self-supply themselves into our marketplace marketing themselves to contract jobs from employers.
Their skill listings would be promoted to employers using AI with open jobs. Employers would then bid to engage with this talent without a staffing company or a middleman in between. That’s gonna be huge, I thought. Those of you, who have founded companies know how wrong that statement can be when reality hits you. For example, it kind of solved a supply problem as we had candidates signing up, but signing up organizations was not easy. I remember one Facebook exact, we pitched to, who told us it was a great concept, but well it isn’t enterprise-ready. That was quite a shocker. But looking back the best advice we got, we got enterprise users to become an important feedback loop, helping us create a robust user experience for the buyer. We learned a lot and we put it to good use. We went live in the market in late 2017. Today we have over 200,000 users and we are growing by thousands of new users every week.
Roadblocks on the journey
We had a lot of questions along the way. So for example, what if we changed one small thing about the design of how our user signs up or our candidate signs up, and how would that impact the supply of candidates into the marketplace? What if we introduce a candidate rating system into the mix, is that even legal to do? What makes a self-sourcing concept succeed? Why is it changing talent procurement strategies globally or why could it change or how could it change talent procurement strategies globally? We also made a lot of discoveries as well. Firstly, it turns out that a well-designed talent acquisition system is key and we didn’t actually get it right the first time. How does one get the right kind of candidates to sign up and accept jobs without a recruiter? How does one ensure that the candidates are responsive? How does one ensure that thousands of candidates are signing up monthly so that we can match them to other thousands of jobs that are coming in and we can establish a good fair rate? And how can we do this ensuring that organizations that are using the marketplace are filling their roles at a better conversion ratio than your typical model?
Consider a tool that eliminates these roadblocks
The answer was, at a high level, quite simple. “Acquire, retain, and engage hundreds and thousands of candidates and match them to jobs in the marketplace.” Creating the perfect happy loop that ends up with a candidate taking on the contract or the job and do it again and again, on repeat, successfully. It’s easier said than done. A staffing company may have a database of hundreds of thousands of candidates, but it still needs teams and recruiters to call, email, text into these systems to find those candidates who are a good fit for a job opening. Having been through this experience, we all know jobs go unfilled because the existing systems can’t handle the just-in buying process the way it is meant to be handled, especially in the 21st century. I mean, I wish we could fill them all right.
Remember the frantic procurement manager called me at the start of the story. But as I recall, we were only able to fill around 10% of their needs and it took him about three months to get the unit about 70% staffed. Those were probably the most stressful three months of his life.
You see, the staffing VMS/MSP traditional model isn’t built for the 21st century. There are too many moving parts — the job postings, the applicant tracking systems, the recruiter, the sourcers, the account managers, the customer teams, the VMS technology, and how can I forget the MSPs and their teams? “Can you imagine all these moving parts working to acquire, submit, and get hired candidates on just-in-time basis?” It is mind-boggling that this even works, but there’s so much wastage of money, time, and resources, just because there are so many disparate resources at work, trying to integrate with each other. What we did instead, and what an online staffing marketplace does itself is the self-sourcing model is bringing everything under one umbrella and using technology to make things simple yet powerful and delivering. Remember that Uber, we wanted to achieve something similar.
What did we do?
One of the things that we did early on was that we decided that we would not advertise a customer’s job on job boards. We felt that it would defeat the whole purpose. I’m extremely glad we did that. This kept our customer’s jobs private, it pushed us to build our own organic talent acquisition system, for example, just like an Indeed or Monster has. Because we knew that an efficient marketplace should have a constant stream of just-in-time suppliers i.e., the candidates themselves directly. We build a technology called the skill radar system and it’s job was to identify the right kind of candidates we wanted to invite into our marketplace. We advertised and marketed to this group of people using Facebook, Instagram, and lately just yes, even TikTok.
2. Think like a champion
One of the things that helped us in a talent acquisition strategy and process was our brand proposition. Included in that was interactive features we offered the candidates. The ease of use and seamless user experience helped as well. But driving organic traffic to our website, we were able to acquire thousands of qualified job seekers looking for contract or full-time jobs every month. The icing on the cake is that every user signs up brings in around three to five more users with them or candidates signing up with them through word of mouth. The users update their skill listings or profile where they’re on contract and when they’re ready for a new assignment — no middleman required — very much like the Uber driver. They choose the jobs and the times that suit them and everything is on their fingertips. It’s real-time.
3. Move and follow your curiosity
This is a big win for the buyers or the organizations who hire contingent workforce. So for example, with self-sourcing through a marketplace companies no longer have to depend on staffing companies and their recruiters. There’s a transparency in what kind of supply one has access to in real-time. It’s right there in front of you, nothing is hidden thousands of new candidates become available in the marketplace weekly. There are no recruiters running around calling candidates. It’s just simple, easy to use, but an interactive powerful modern app that helps the user feel the solution in their hands. So much less stressful than picking up that phone and wondering if the supplier can deliver or not.
This also leads to responsive and engaged candidates, which equals higher fill rates and cost savings — a very similar experience to amazon.com. You no longer have human beings managing the candidate supply inventory and having to depend on age-old tools to do that. We just streamlined the inefficiencies.
The second most important thing that we had to work and early on, and it was clear it was super important, was to create a sophisticated search and, and matching technology within the marketplace itself. So for example, the buyer or organizations who are using the marketplace for their contingent workforce need is already getting used to the mobile economy or the content economy. They use Amazon, they’re using Netflix, they’re using Uber and so are the candidates. With the marketplace user experienced and no more waiting around for a recruiter to call them and match them using a manual edit-find process.
Instead in the marketplace, our AI-based matching system learns about the user — it could be the employer who’s hiring that organization or the candidates — and provides matches with the highest possibility of success to either parties. It’s kind of like, how does Uber know which driver to send you that’s going to be there at your front porch within 10 minutes. We were doing something similar using smart learning algorithms to achieve optimal results. We’d drive the users to the best gigs that fit them and employers at this point bid to engage with these users. Unlike an ATS system, candidates in the marketplace are 10 times more responsive than they are to your traditional calls and texts from recruiters.
Replace an unproductive habit with a positive alternative
Being on an internet app candidates are always on and engaged. The candidate doesn’t have to call the staffing company anymore or vice versa. What used to happen in hours, days, and weeks is now instant. Other benefits as well. For example, increasing retention rates by sending users messages start in midway through their contracts within the app itself, all seamlessly pushing hot jobs in locations where there’s a significant shortage and leveraging data science to make their better decisions on how to manage the demand and supply for the buyers of contingent workforce staffing. We saw fill rates increased dramatically. Our offer to hire ratio average is around 80 to 85%, as compared to traditional firms, which hover in the range of 30 to 55% on average.
One other thing that we got amazing customer feedback on is our bidding system. We took this from eBay and we found that candidates were five times more responsive when they received the bid versus just a message on the outside. Gamification was working. This also allowed a unique level of transparency for our customers. They loved the fact that unlike the traditional master services agreements, where the staffing vendors or the MSPs are usually trying to hit the ceiling on the rates negotiated with the candidates within the marketplace, they can still have those ceilings and they can determine them as whatever they are to be for their organizations, but they can also negotiate below these ceilings directly with the candidates. There are no vendors in between them and the candidates. This allows them to save around 30% more on their spend.
There is marketplace fee transparency, and it is something that allows the buyers and the sellers of contingent workforce services to really benefit without having all those middlemen margins in between. So around a month ago, my VP of sales calls me and wants to discuss the rise of COVID cases right here in Houston. I live in Houston, so this was close to home. All hospitals, all around us were seeing a major spike. It’s kind of scary.
Pandemic proof: It’s delivers!
One of our largest customers, Memorial Hermann Health Systems sent out an SOS message. They needed all hands on deck to help them supply ICU RNs, Respiratory Therapist, and CNAs. Texas and in particularly Houston has the world’s largest medical center. So not only were they competing with other cities, but they were also competing with other facilities in the neighborhood.
Unlike the old days, I had a calm about me while taking the call this time around because I knew we could deliver and we could help. There was a tough ask, but we had the marketplace, and here’s what worked. We didn’t need to go and start recruiting last minute. This was a huge time-saver. That was because we already had the inventory of thousands of fresh new job seekers ready and available. We knew our real-time supply versus demand within minutes, we knew the data right in front of us. We didn’t have to pick up the phone and make calls. We didn’t have to email or text in our database. And because of this, we were able to move right into execution.
We released Memorial’s job orders into our marketplace. Our matching technology identified the most appropriate candidates. In the marketplace, Memorial was able to review these candidates their credentials, their resumes, their qualifications, using our rating systems, using our document management technology. They placed bids on the candidates they wanted. They scheduled interviews, messaged the candidates right from the app, negotiated with and made final offers for their travel nursing assignments, right there online, without having to talk to a recruiter.
In final tally, we staffed over 80 nurses and Respiratory Therapists within a two-week turnaround, without any recruiters making phone calls, texting, or emailing their contacts. “So no recruiters, no middlemen, just great candidates transparently hired for competitive market pricing directly out of the Skillgigs talent marketplace”. I couldn’t be prouder. We delivered in the middle of a pandemic in two weeks.
Get started with self-sourcing now
It has been an incredible journey. I hope that having listening to our story and how we are changing and improving the whole contingent workforce experience from hiring to onboarding, supplying, and we helping it make it better one day at a time, you would have seen how great this new concept is, why it is taking hold, and why is it a groundbreaking new reality? The time for self-sourcing is now. So with that, I thank you for attending. I’ll be happy to answer any questions that you may have, in the next 10 minutes. Thank you!
Never miss a good crisis!
Schedule your Skillgigs Marketplace demo? CLICK HERE!