Talent marketplaces are dead, platform work is the future
Platform companies are shaping the nature of traditional employment.
One of the underlying concepts of the dominant employment model across the world is that of people selling their time to employers for salaries and wages. It is a way of thinking that is so entrenched that people don’t even question it much anymore. It is a given that if you spend longer at the workplace, you should be getting some sort of compensation or reward or recognition in return. Unless you’re senior management, of course, when you are expected to work long hours.
That concept has always baffled me as someone that has worked as an HR Director working across multiple geographies for more than 20 years. Why did employers take so long to locate and recruit talent, making candidates jump through multiple hoops and hurdles, only to throw them into the workplace with a job description, a set of KPI’s and a couple of strategy documents (if that) and then simply trust that the bulk of their eight hours a day, 5 days a week, 4 weeks a month and 11 months a year (1 for annual leave) would be spent on productive work?
This is even more puzzling when one considers that research has consistently and overwhelmingly shown that employees have always been productive for less than half of their working hours, at best. Within a dominant capitalist system, why were companies turning a blind eye to the fact that they were paying for 100 percent of employees' value but only really getting 50 percent in return?
Eventually, I realised that it was simply because these companies had no option. Permanent, regular employment was our only viable option because even if wasteful, was still less than paying for consultants and contractors on a regular basis.
The emergence of platform
Finding this talent became somewhat more sophisticated as we moved from regular recruitment to headhunting and agency hiring, then using social networks to recruit, and then entire online ecosystems to hunt for talent. 'Talent marketplace' was the term used to describe these digital swamps where everyone was a creative strategist or maverick governator or innovation champion. But they were just online routes to speed up an already-broken model that was hopelessly inadequate for the demands of a new herd of talent, and the needs of newly forged enterprises focussed on the future.
In the wake of these inadequacies, rapidly growing online platforms have been upsetting the very nature of work as we know it, laying the foundations for the future of work into the next industrial revolution. The chief assets of these platforms are interactions and information, together with being the source of the value created, and their competitive advantage. Platforms are changing the game in the following ways:
- From controlling resources to orchestrating them.
- From optimising internal processes to externalising interactions
- From increasing customer value to maximising the value of the entire ecosystem
This presents a great opportunity for HR directors to tap into globally shrunken talent pools. However, If you think that the platform economy is around the corner, Interbrand has reported that 13 of the top 30 global brands are platform companies, including the top two in the world (Apple and Google). Since displacing the company that has always held the title of top brand since measurement actually began (i.e Coca-Cola) platform companies have each year made such gains that they will shortly occupy the top three positions, relegating Coca Cola to fourth place, even though they spend less than 10 percent of Coca-Cola on marketing, on average.
The rate of change is staggering
In 2007, seven mobile companies held more than 90 percent of the global market share. A mere six years later, Apple not just shot to the top but controlled a whopping 92 percent of the market. It is a characteristic of the major platform companies that, after an initial period, start periods of rapid growth such that they become virtual monopolies in their own spaces.
This is because, in a platform ecosystem, each side of the platform (i.e the provider and the user) attracts more of the other. Uber riders attract drivers, and vice-versa. Airbnb hosts attract guests, and vice-versa. Tesla charge stations attract Tesla drivers and so forth.
This is very interesting not only from a business model perspective but from an HR perspective as well because a further reason for the explosion of platforms is that their entire ecosystems are outside of the confines of the companies running the platforms. Netflix may have a few hundred employees but their external ecosystem expands to billions of people. Companies are growing exponentially with a limited number of employees as they leverage technology.
This mind-boggling potential growth is a result of feedback loops (also known as networking loops). As the Netflix algorithm picks up on recommendations the more it’s used, the more personal it becomes, and the more it is used as a result. An irresistible spiral. That is the power of properly curated platforms. It has the potential to massively enhance demand (as opposed to supply) economies of scale. When users create value for users, the network value of partner to partner relationships stimulates growth and blurs boundaries between providers and customers.
The potential for up-ending traditional work through platforms is therefore inevitable. From a commercial perspective, companies will see their own HR moving from a focus on internal employees to dealing with external communities. In so doing, HR itself will have to confront a philosophical question; what is work?
Fortunately, platforms supporting the future of work by being the curator of interactions between companies and the skills they require are mushrooming, thus giving companies global access to on-demand talent, plugging in and out of their organizations smoothly and frequently.