Lack of ownership makes managing gig workforce more challenging: CEO Stoke
Although companies have been slow to adopt gig work models as of yet, however, it’s an approach that the majority of business executives are currently considering. According to Mercer’s 2019 Global Talent Trends report, 79 percent of executives say they expect contingent and freelance workers to substantially replace full-time employees in the coming years.
For medium and large companies, the process of hiring and managing freelancers is way more complex, disorganized and difficult. It is often managed through a combination of emails, Excel spreadsheets and scattered Word documents. As employers look to scale these operations, on-demand talent platforms might come to rescue. On-demand talent platforms are fundamentally marketplaces where supply and demand face each other under the aspect of a supply of talent and a demand for talent. These platforms therefore mainly belong to the second category.
To discuss the challenges of managing a gig workforce and to explore the opportunities on-demand talent platforms hold, we interacted with Shahar Erez, CEO co-founder, Stoke, an Israel based work tech startup that recently raised $4.5 Mn of seed funding. Stoke seeks to help companies access the growing talent pool of self-employed freelancers and contractors and manage the flexible workforce at scale.
Here are some excerpts from the interview:
While companies have been slow to adopt gig work models as of yet, it’s an approach that the majority of business executives are currently considering. How do you think the market is currently faring when its comes to adopting gig work models?
Companies have indeed been slow to adopt the gig economy
Individuals and organizations have their own definition of ‘Gig economy’. A lot of people think the gig economy is the Uber drivers, bicycle riders etc. But the reality is that the greatest growth in sole producing and freelancing is for white-collar high field professionals individuals. While a lot of the new talent is coming into the workforce and choosing freelancing as a pack, companies, however, are still exploring how to relate to the new model.
The challenge for companies today is that some companies are still operating under the same framework model that they have been working with for decades and centuries. But now the world of work that we live in is constantly impacted by multiple forces and old and traditional frameworks are getting challenged. For instance, the average age of being at a job is technically two years now. More than that, if you continue to stay at a place for long, it may not work in your favour. The emerging business models, in fact, create the need for talent to have diverse experience and multiple skills.
I think there are four powerful forces that are shaping the future of the workforce within the organization and it is high time they are addressed. The Millennials and Gen Zs opting for more project based work, learning becoming more easy and accessible, the business need to outsource diverse skills sets, and the skills shortage.
What are some challenges you think may emerge as the trend of gig economy grows?
I would like to highlight certain barriers to adopting the gig economy.
The first one is that freelancers not getting paid on time.
Let’s go through the journey of a freelancer within the company. If I hire a full-time employee, I will probably follow a set pattern that is supported by most organizations. I write a job description, then post it on some job portal, I get some resumes, then after screening them forward them to the hiring manager, ultimately, filter and then send it back to the HR manager before they call the candidate for the interview. But now when I have to hire someone who is not a full-time employee and a freelancer, I am pretty much on my own.
In most organizations, there is no ownership, so there are an array of questions they grapple with. How to find them? How to merit them? How do I check their background? Assuming you have made it past that stage and you have found the person you are looking for then you think okay, what next? Do I get them to start working? Do I need to find them a concept?
As the employers are not yet familiar with this working model, it is a process that hiring managers need to think about. They also have to consider the operational aspects that they have never thought of before. From hiring to onboarding to compensating them to engaging and building a relationship with them for future projects, the employers need to strategize for the complete ‘freelancer lifecycle’. Otherwise, without any framework to manage the gig workforce, employers, hiring managers and HR teams will get tangled in balancing and managing various tasks, leading to inefficiencies.
The process of hiring and managing freelancers can be cumbersome. How can technology help?
Technology allows to digitize the entire process and speed up the decision making process. It enables more control and ensures transparency, with access to a common platform or dashboard where all the information can be seen. Similar to how technology has been adopted to streamline workflows, it can be used across ‘freelancer lifecycle’, from sourcing to engaging.
Once we digitize the process, we believe that the access to talents will be democratized, decentralized, and employers wouldn’t have to go through HR, Finance, and other departments to hire the people required for a project or a role.
How does Stoke in particular seek to help both the gig workforce and employers with technology?
Once we realized the potential of technology and how it can help solve the challenges of managing the changing demand for skills, we came up with a technology-enabled on-demand management platform that combines data science, user-first design and world class service for organizations looking to increase agility, accelerate delivery and embrace a learning, adaptive culture.
With a digital platform in place, any one, be it team leaders, recruiters, or hiring managers, they can go online and search for a specific skill they are looking for. And then without going through the entire chain of, you know, ‘horrors’, they can choose their pay scale, onboard them and take care of their entire hiring on their own, with all the information regarding policies and compliance at one place. Once the project is completed, the offboarding can also be done easily with all the information of a particular company’s policies at one place, the hirer can access all ‘Legal documents’ and ‘Tax documents’ easily.
The platform we call, ‘The Agile Workforce Platform’, allows self serviced onboarding and offboarding and streamlines the process of managing on-demand talent.
How has the traction been like for you?
The response from businesses has been very positive. I mean, the pain is real. Everyone acknowledges the challenges of hiring and dealing with a shortage of talent and skills. I would say that almost every conversation we've been through, the need is there, the understanding, the need to experiment differently is there. But the big question is who in the organization will be the one to drive the change, will it be finance or operations or HR?
I think HR can play a critical role in leading this change. However, most HR organizations are still focused on recruiting and other compliance work. Can HR turn into a real business partner and help drive the change required to deal with the increased demand for freelancers? I think the jury's still out.
We have started this year and right now focusing on onboarding new customers. Raising $4.5 Mn of seed funding and getting backed up by names like TLV Partners, Bogomil Balkansky (former VP Cloud Recruiting Solutions at Google), Flatiron Health founder Zach Weinberg, Boaz Chalamish (CEO of Clarizen), surely boosts our confident and reiterates the potential the platform has.
What are your plans in terms of expansion going forward and how are you planning to further innovate your solutions?
Currently we are focused on building a solution for large enterprises, particularly in the tech sectors. Further, we are focusing on white collar jobs. At present, we are looking at it as a business challenge and trying to solve it from a business perspective.
Going forward, there are plenty of things for us to expand into, over the next few years. But before we move to anything else, we want to ensure how companies embrace our current solutions and see how far we are able to solve the current challenges we are focusing on. With more insights, later, we can explore other territories and aspects of hiring and managing on demand talent platform as well.