What Would Your Staffing Agency Do With 18x Growth Rate and 4x Gross Margins?
Online staffing marketplaces are transforming the staffing industry — but their genesis begins with the B2C gig economy, which has grown at a historic pace. By embracing signup culture, B2C gig economy companies such as Uber, Lyft, Instacart, and Postmates created a work application process that was quick, easy, and transparent.
The B2C gig economy reached $169.1 billion in global spend in 2019, as reported by Staffing Industry Analysts (SIA) in their recent research study The US Gig Economy. In this study, SIA shines a spotlight on some eye-popping numbers on online staffing marketplaces, their growth, their profitability, and how relatively few staffing agencies are launching marketplaces.
Online staffing marketplaces are growing 18x more than traditional staffing
B2B marketplaces have plenty of room to catch up, reaching $9.4 billion in global spend in 2019. The bulk of this spend was in online staffing marketplaces, led by companies such as Upwork, MBO Partners, and Fiverr.
What’s remarkable about these online staffing marketplaces is that they’re growing about 18x as quickly as traditional staffing. Temporary staffing grew at 1% in 2019 while B2B marketplaces grew by 18% in 2018, according to SIA.
While traditional staffing still has larger market share, this growth shows a change in where candidates look first for work.
Marketplaces are hugely profitable and and yet still underutilized
The result of this move from traditional staffing to online staffing marketplaces? Gross margins that increase by 4x. Traditional staffing agencies report gross margins of 16.2% to 20.0%, whereas online staffing marketplaces list margins of 10.8% to 83.7%.
These networks are where the staffing industry can benefit from newly-empowered candidates who choose short-term work and flexibility. Online staffing marketplaces require significantly less human capital to fill jobs. In signup culture, people are able to direct themselves to the work they want.
While this might seem like a slam dunk for traditional staffing firms to pursue online staffing marketplaces, only 10% of staffing firms had already launched or partnered with an online staffing marketplace. Another third of these companies are considering it. And yet an additional 46% of staffing agencies are aware of online staffing marketplaces but not planning to pursue them.
It’s important to mention here that the staffing agencies that are winning are those that are embracing online staffing marketplaces, either by directly launching, partnering, or creating engagement models that borrow its strongest elements.
To see how staffing agencies are innovating (and how you can too), download our free eBook
Online staffing marketplaces are just one part of a larger trend that’s transforming the staffing industry: the rise of signup culture. It’s what happens now that the world has been conditioned to expect everything immediately: whether that’s a package on our doorstep in two days or a rideshare arriving at our doorstep in five minutes.
The Rise of Signup Culture eBook is the first in our Staffing Trends 2021 series, a series of three eBooks which show you how the staffing industry will evolve in 2021 and beyond.
You’ll learn about these changes from some of the staffing industry’s leading innovators. Inside the eBook are insights from:
- Patrick Beharelle (CEO at TrueBlue)
- Michael Whitmer (Global CIO at Recruit Global Staffing)
- Taryn Owen (President at PeopleReady)
- Brad Talwar (CEO at TalentBurst)
- Nick Seger (COO at Elwood Staffing)
- Lars Asbjornsen (SVP Marketing at Upwork)
- And other staffing leaders who are transforming the staffing industry.
Download the eBook today to learn the trends, statistics, anecdotes, technologies, and people who are embracing signup culture and changing the future of the staffing industry.