The “on-demand economy”, the “sharing economy” or Uberization. The fact that we have these terms for describing a phenomena that didn’t exist a few years ago makes this is real and growing occurrence powered by the ubiquity of the web and the growing prevalence of smart phones. Just yesterday, I used office space for 90 minutes from Breather – on demand office and conference space that you pay $25-$35 per hour. Brilliant! Can you image what a seminal moment it was when Apple introduced the first iPhone and forever changed how we go about our daily lives.
While the web and smartphones are enabling these trends, there are underlying forces at work both from the supply and demand side. This is all about specialization that allows for the perfect alignment of need and utility from the demand side – you only use what you need, and not pay the “overhead” for things you don’t want and from a supply side, companies can manage asset utilization (and availability) to optimize ROI. Thomas Malone from MIT’s Sloan School says that computer technology is producing and age of hyper specialization.
This trend is also apparent and growing in the labor market. Yes, we always had temp labor but the new phenomena here is the ability to tap into highly qualified talent as and when needed.
- A McKinsey study claims that 55% of companies are more likely to use “Talent on Tap”
- The market for “Talent on Tap” is growing by 20% annually in Europe, a market more developed due to their difficult labor laws
- Venture firms have increased investment in the on-demand economy, from $200MM in 2009 to $1.6Bn in 2013, investing in 117 companies (Source: Crunchbase)
From the company perspective, tight budgets, very specific expertise needs and shifting resource needs has led to a growing need. Companies are looking for real expertise in specific issues and are reluctant to just bring in smart people who’ll figure it out. They have an issues, they find an expert to help solve. And then for the next issue, bring in someone with expertise in that.
Satisfying this demand has resulted in the growth of companies like mine, IQ Workforce that match industry and issue specific Talent on Tap with a client’s needs. We only see the Talent on Demand market growing further.