Posted by Peter Cannone, CEO of OnForce
It would be impossible to overlook all of the talk about the collaborative, sharing economy, which is estimated to be a $110B plus market. Even Thomas Friedman penned a New York Times op-ed column on it. Not to mention IT luminary Irving Wladasky-Berger’s take on it, which recently appeared in the Wall Street Journal.
With companies like TaskRabbit and Airbnb capturing the spotlight, it’s easy to lose sight of the fact that there is a significant opportunity in the IT slice of this market. In fact, of the $3.5B that will pass through the sharing economy this year, approximately one-third of it will go toward IT.
So how exactly does IT play in today’s sharing economy and how is it evolving into Workforce-as-a-Service (WaaS)?
Well, let’s first step back and understand what we mean by the sharing economy. Jeremiah Owyang of Altimeter Group offers the best definition. He explains the sharing economy is “an economic model where ownership and access are shared between corporations, startups and people. This results in market efficiencies that bear new products, services and business growth.”
Now you already know that this whole notion of sharing isn’t exactly new. Rather, the sharing economy has resulted from the evolution of our workforce since the days of the Industrial Revolution.
During that time, the majority of employment opportunities for the first generation workforce were in manual labor and it wasn’t until the World War II economy that healthcare was introduced by employers as a recruiting tool.
As innovations in the Industrial Revolution eventually led to the Digital Revolution, the second generation workforce, marked by the rise of knowledge workers, soon outnumbered all other workers by a ratio of 4:1.
Then, as the Internet age morphed into Web 2.0 where collaboration reigns, came the third generation workforce. In this sharing economy, contract employees double as entrepreneurs carving out flexible work arrangements, funding their own healthcare, and taking more control over their destiny.
It’s not a coincidence that the sharing economy has taken off during a time of unprecedented change in the workforce, especially when it comes to IT. Let me explain.
On the one hand, you have businesses that want to optimize efficiencies without bringing on a slew of full-time employees. On the other hand, there are a growing number of skilled IT professionals that, after weighing the pros and cons of being on someone else’s payroll, voluntarily joined the ranks of the independent workforce and are thriving as entrepreneurs.
When you look at the converging forces in the economy, advancements in technology and the shifts in the traditional employer/employee arrangement, you can see how we’ve arrived at the sharing economy and how it’s evolving into the on demand “Workforce-as-a-Service” (WaaS) business model.
Going beyond tactical tasks of the sharing economy, the WaaS model applies to the fourth generation workforce. In it, knowledge workers are able to satisfy the needs of businesses by successfully executing short-term assignments, anywhere.
For example, let’s consider WaaS for IT. Imagine a business that needs to ramp up quickly or perhaps sustain an existing product line while they focus on other initiatives. In both of these real world scenarios, independent IT service professionals can help with these transitions.
WaaS is an ideal work arrangement when you look at a company’s desire for modular staff to complete a project or get geographic reach quickly, and the rise of independent contractors that want the flexibility and consistency that come from steady, short-term assignments. Yet before you embrace this model, be sure that the assignment is fully protected should anything go awry.
More specifically, what a lot of service buyers may not be aware of is the fact that many assignments are only partially protected, therefore exposing their businesses to significant risk.
If you’re a business or an independent contractor that wants to seize part of the multi-billion dollar sharing economy as it evolves into WaaS, you must have the assurance that each assignment is protected against liability, errors and omissions, and workers’ comp.
Now you may be thinking this adds too much complexity to the idea of hiring on demand but don’t let it be a gating factor. Instead, look to those proven online networks that bring together service buyers and IT service professionals and ask the tough insurance questions before you commit to bringing an independent contractor onsite.
There’s tremendous upside in the WaaS model for businesses and independent contractors as long as both sides are properly protected throughout the engagement.
With flexibility and expertise as it’s hallmarks, and the prediction that 50 percent of the American workforce will be classified as 1099s by the year 2020, it’s clear the WaaS model is here to stay.
