World Staffing Summit 2021

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How will Online Staffing platforms replace the traditional staffing model?

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Summary
TRANSCRIPT

How will Online Staffing platforms replace the traditional staffing model?

Online staffing platforms are on the rise and are challenging existing models.

Supported by AI they are on track to creating self service platforms.

But will they displace the traditional model completely or will it be a combination of both?

Listen to four technology staffing experts discussing how the current staffing models will evolve. Learn what steps need to be taken to take a staffing business online.

Sign up to check out the full session for in-depth insights that you can apply to your own company!

Jan Jedlinski: Hello, everyone. Thank you so much. Thank you for being at the World Staffing Summit. We are back on stage now with the next panel.

We have Nick, Jonathan, Marlon and Matt here. We'll be talking about how online staffing platforms will replace the traditional staffing model. Enjoy the session, ask your questions in the chat and yeah, uh, I'm handing over to Nick to take it over.,

Nick Ellis: Thank you on a good morning for all of those that are on the west coast.

I'm dialing in from rainy San Francisco. It's good to be with you here. My name is Nick Ellis. I work for Amazon web services and come from about a 13 year history building an operating staffing companies, myself. I wanted to take a moment to introduce the panel here. We've got Matt, Marlon and Jonathan all joining us.

And I'm going to ask them in that order to just take 30 seconds or so, and tell you a little bit about themselves and their business. And then we're going to jump into a quick agenda, largely full of Q&A. And we'll look forward to many of your questions at the end here. Matt, do you want to take a moment and just introduce what you're up to and, and, and how you've been involved in this st

Matt Pierce: Yeah, thanks,Industry Nick. Appreciate the time and the opportunity excited to be here. My name's Matt Pierce. I'm the co-founder of Trusted Health. I've been in the staffing industry, my entire career. So I started at TEKsystems and allegiance group company and transitioned to the world of tech and startups@hire.com.

And about a little less than four years ago, started Trusted Health with my co-founder Lenny. So excited to be here. Thanks for.

Nick Ellis: Awesome. Thank you. Marlon, then you want to share a little bit about your background.

Marlon Rosenzweig: Yeah, absolutely. I'm Marlon Rosenswag co-founder and CEO of WorkGenius. I'm originally from Germany was educated in England, started the company in Germany though, and then brought it over to New York.

And now I have fled you know, due to the pandemic to Miami. So I'm enjoying the sun down here. And we've been doing this for eight years now. So we've seen sort of. The ups and downs and the trends in the industry, which has been very exciting.

Nick Ellis: Awesome. Oh, thanks so much for joining today, Marlom.

And then Jonathan, please take a moment to introduce.

Jonathan Kestenbaum: Sure. Hi, everybody really glad to be here. I'm John Kestenbaum, I'm the co-founder and managing director of Talent Tech Labs. We are a research and advisory firm focused on helping companies go through a digital transformation in you know, HR I've spent, I'm actually a lawyer by education, unfortunately, but I spent whole career in the HR tech space versus a builder. I built until the talent acquisition technology company. And now as an advisor slash investor to talent acquisition technology companies. So really excited to be here and looking forward to the conversation.

Nick Ellis: Awesome. Thanks all. And again, just for those in the audience, we're going to cover just a couple of quick topics today.

Excuse me. First we're going to spend a few minutes on what's working out there in the online staffing market. Talking about a few examples to locate everybody in time and place. Then we're going to turn a little bit to the economics and some of the challenges, the risks and barriers that a lot of traditional staffing firms encounter when they try and take their business online.

Hopefully leave you with a few key insights around that. And ultimately we're going to leave a little bit of time for your, your Q and a at the end. So with that is the agenda. I'd love to tee it off. Marlon, you know, you and Matt both operate a staffing platform. Loosely. I know there's many flavors of staffing platforms, but at the highest level you've had a lot of experience out there selling against competitors, seeing what works, what doesn't, I'm curious in your eyes, maybe Marlon, speak with you.

You know, who is doing online staffing solutions while out there and, and why, what are they doing that sets them apart from some of the other folks that you're seeing?

Marlon Rosenzweig: Yeah. I think there's two things, how we evaluate competitors. And I think that's, that's probably how the buyer thinks about it. Like the end company that's, that's approaching a staffing firm and one is sort of payment and compliance.

Right. I think why people turn to staffing firms as opposed to hiring people direct. Is sort of the extra flexibility that you gain. I think a lot of this has been automated. There's sort of room for optimization, which I think, you know, MBO partners is doing fairly well where you can sort of decide whether you want to do 10 99 or W2.

And then sort of depending on the profile and the behavior, you can really sort of optimize the, you know, the type of engagement at the end of the day. I think the. Topic that people should be talking about more is sort of talent selection. Right? I think the overhead that the staffing firm takes on to find you the right talent to do the initial vetting, which is, you know, pre pandemic, we had, you know, historically low unemployment numbers.

It was extremely hard. You know, I, I dare to say that probably in certain pockets of the market, the unemployment has not gone up. Right. Even though the overall. Tends to suggest that sort of, you know, unemployment there's more than four, 4 million people unemployed right now. When it comes to automating that part of the process, I think there's a lot of online staffing platforms out there that are almost working like you know, like a mechanical Turk where they saying this is all automated, but it's people on the backend really doing the work.

And you can see that shine through at least for the public companies and their gross margin profiles. So I think that is something that you really need to look out for. When you, when you look at sort of how good are the capabilities really of that staffing firm to, to find you the good talent, because as, as an end user, you don't want a list of 250 candidates that can potentially start on Monday. Right? That's that's of no help. That's like, it's an, it's a nightmare for any hiring manager. So I think that, you know, without going into too much detail, but I think there's a couple of companies that do this well as a couple of companies that sort of, yeah, I'm not saying it's deceptive, but they're say it's automated and it's really sort of, you know, humans doing the work in the backend, which is, you know, not really an online staffing firm, as you asked me, I think we just lost our model.

Matt Pierce: I think we just lost Nick, but

Jonathan Kestenbaum: Matt, why don't you go next? Yeah. And then I'll report

Matt Pierce: follow up and hopefully Nick can, can figure some things out in the meantime, but Marlon, I, I agree with a lot of what you said, I think to provide like a tangible example, one company which is an earlier stage startup that I've been getting really excited about is a company called Kudo actually.

Wanted to provide this example because they don't identify as a staffing company or a staffing platform. They're actually a multi-lingual video or web conferencing solution, but they have actually a labor marketplace of interpreters that power their platform. Right. And. We, the reason why I point that out is because I've been really fascinated recently by how close can you as a staffing platform, are you as a company, how close can you get to like the point of origin of the staffing need?

And as, as an example, a Kudo, they have a web conferencing platform. They also have APIs and plugins at any point, if you know, we wanted to broadcast what we were saying in a different language. You could click on the Kudo plugin and change the language and you have a labor marketplace in the background.

That's, that's interpreting that a different language so that the, the closeness to the point of origin is I think really fascinating and interesting. Like we, as staffing solutions need to think about where does the demand come from? Whereas like the, like the specificity of the need originate from and how close can we get to the workflow to make it seamless, to ultimately create that need and fulfill that need in the quickest time possible?

Kudo was one example that I thought just like represented. What was interesting. There's another company early stage trucking staffing company called Hall, which is like diving into the logistics space and, you know, coming out of that you know, doing trucking staffing in a very, very interesting way.

So those are all just some interesting examples. All, all, take off my trusted hat for a second and use some.

Nick Ellis: I appreciate that now. Just to confirm, are you two able to, you're able to hear me again. Sorry. I got dropped from all right. Well, you bring up an interesting point or not. Okay. Figuring out where the point of origin is for that staffing relationship is really critical.

And being as close to that customer as possible is really critical. You know, one thing that I've noticed in my years is that brick and mortar or offline staffing agencies, old world staffing agencies have oftentimes over to those relationships and it's been harder for platform to break-in to get close to the customer, have the credibility, and then ultimately easily transact.

I'm curious, Jonathan, in particular, from your view, you do a great wide survey of what's going on out there in the industry. You know, are there examples of offline or brick and mortar, old world staffing agencies that have successfully evolved their model to stay close to the customer when they go online?

You know, or do you see these as kind of two different staffing models entirely? And it's more about how you mix and match.

Jonathan Kestenbaum: Yeah. Great question. So I want to take a step back and just kind of give a framework for how we look at online staffing. Just so you guys, cause then I can attack it more directly.

So, you have a traditional staffing firm here on my left, probably you're right, right. We then have e-staffing, which we consider part of online staffing. Right. And then we have what we call like deployment platforms. Right. And essentially what's happening is you go from a high touch. You know, all the way to low touch, like almost, you know, automated systems.

And so, there are varying degrees to which existing traditional brick and mortar staffing firms aren't leveraging these tools. You have staffing firms and, and I want to be careful not to. Not to not call out. One of my clients are doing great work. So I'm going to use illustrative examples that everyone knows likely instead of, you know, cause I'm sure a lot of my clients are doing great work around this.

But um, you know, you look at a company like Uh, Adecco, that is leveraging Vettery, right? Vettery is an e-Staffing platform. So it's kind of like one step closer to a, um, you know, an on demand marketplace where you're now you don't need salespeople. It's it's self-serve to, to get access to the candidates.

You then look at a company like Randstad with their investment in , right. They are now like a step further leveraging a template or marketplace, or, you know, a gig platform to deploy candidates into the market. We also, you know, another kind of spin on that. It's a deployment platform. And so you have companies leveraging, like TrueBlue leveraging a deployment platform swipe jobs to deploy their candidates in the market.

I think. To now enter your question more directly. You know, it, it, there's some interesting dynamics at play. First is the end users who sell to is generally different in these plattforms firms. So traditional staffing firms, you know, usually selling to procurement, right. You know, these platforms e-staffing or Uh, you know, a deployment platform is, is the end user, sometimes hiring manager, like directly, right.

So, it changes their sales process a bit. So it makes the dynamics difficult. I think, um, you know, it, the, the you know, you know, ultimately we don't think, you know, we don't think everything goes to one of those silos, you know, know, you know, we think that there's going to be a combination of these different models depending on the type of staffing that you're doing.

I, and, and, you know, I would agree. I would argue that technology is going to make its way into the process, no matter what. And we're going to have like a race to the middle on leveraging technology, but these different. Types of technologies to help you deploy talent or engage with the end client.

You know, I think are going to exist in different segments of the market. And I would just second, I, you know, I think you know, what Marlon and Matthew said, you know, particularly around matching and just, you know, project based selling. You know, I also think that's super interesting and that's, you know, where we're seeing some really interesting innovation on some of these platforms.

Nick Ellis: Thank you, Jonathan. I like where you ended up point. It kind of leads into my next question, which is. You talked about how these platforms and these services, these tools, whatever you want to call them as they're incorporated, you know, they changed the workflow and some of the core processes, they sometimes change the point of contact that you're dealing with from compliance to procurement over to the hiring manager and Marlon, you specifically called out about, for example, in talent selection, it can have a major impact on gross margin.

You know, and I've yet to meet a staffing operator that doesn't know, you know, how to track the gross margin down to the penny, you know, their EBITDA. These are things that we know in a very thin margin industry make a big impact. And so I'm curious your views on incorporating this technologies, these platforms and services.

Where is the risk and where's the reward financially or logistically just, you know, in terms of integrating with your back office systems, what have you seen there? Any best practices you might share?

Marlon Rosenzweig: Yeah, I think you know, again, you know, separating this out, I think one is sort of the compliance component where I think everybody agrees, you know, the, the paperwork should be done through technology, right? No one needs to run payroll manually. All of this should be automated. And I think optimizing these workflows, everybody agrees should be done and it doesn't really impact the user experience. Right. Both on the talent side, as well as the clients side. If at all, it just gets better.

I think coming back to the talent matching, I think that's where it can get dangerous in the sense of you may lose a client. Right? So I think there's two questions. One is how good is the technology to really find that talent, right? And theoretically, and obviously sort of I'm highly biased. But what I would argue is the more data you have, right?

The better your decisions should become. Machines can analyze data better than humans, right. Which is sort of, you would suspect that technology can make better matches. And obviously, because it's technology, it's also faster because it can work through billions of data points. Right. But there's something to be said that certain lets call it chemistry components that you cannot really pinpoint.

Humans are extremely good at detecting someone being awkward. Is is easy for a human to detect very difficult for a machine to detect. Right? So I think, and this leads to the second point of that matching the technology may present a candidate to the client that is completely unfit for that role. And then your client may get upset and say, okay, I don't want to work with you anymore.

Cause you, you know, you sent me rubbish profiles that don't fit. Has anyone ever talked to these people? This makes no. So while we all agree that the, the gross margin potential improvement is the highest in recruiting. It's also what sets staffing firms apart. Right? I think the delivering the good candidate to the client is not a commodity versus compliance and payrolling is a commodity.

So I think that's, you know, it's, it's the pride of every, every staffing. And that's also where the gross margin improvements are, but I think, you know, make sure that you have good technology that may even work in hybrid a little bit, still, you know, maybe presents three candidates instead of making an instant match that then doesn't work.

I think that is sort of where it gets tricky and that is the risk is you, you, you know, you may see client churn. If you don't do it well.

Nick Ellis: Matt, I'm, I'm curious your assessment, you know, you're working a slightly more regulated market, you know, are there different benefits or risks that you've seen for some of these agencies that embrace these new models?

Matt Pierce: Yeah, I mean, I think just to kind of touch on the original question, I think that the biggest risk in the most cost associated with those traditional agencies, trying to make the digital transformation. Is actually culturally and from like a change management perspective, right? You have companies who've been around for decades, who've built their workflows, their processes, their culture on legacy systems and processes.

And when you try and adjust that that's really hard thing to do. And, uh, even if you're successful in doing it, let's say it takes 24 months or 18 months. That technology that you're implementing or that tool or the, you know, whatever form of digital transformation that you're trying to implement might be outdated by the time you do so.

So I feel really lucky and fortunate that, you know, we're you know, building a company that's only three and a half years old because we can build on the latest platform and, and we don't have the legacy challenges that traditional staffing agencies do. And so that's where it's really interesting to start to see the investment and the M&A from the larger traditional agencies, because, you know, they're purchasing that culture and that innovation and kind of incubating it and supporting it with, you know, the invaluable knowledge and relationships associated with, you know, the larger legacy the agency models.

So I, for me, it's always, you know, touching on. The digital transformation, isn't a novel idea or concepts. You know, 60 plus percent of the fortune 500 from the last 20 years has gone for a reason because they were unable to make the digital transformation. And I think, you know, staffing agencies, the best in the business are going to be able to do that.

And it'll be interesting to see you know, how they execute on .

Jonathan Kestenbaum: Nick

Nick Ellis: Jonathan.

Jonathan Kestenbaum: Yeah, absolutely. Yeah. So, so right on Matt, I totally agree with you. It's exactly what we're seeing with our clients. That being the biggest risk you know, some are able, some are more, you know, more successful than others at being able to do that. I think one thing that's interesting to, to highlight around this, again, to take a step back, but to kind of hone in on what we've been talking about is you know, I think the elephant in the room here is that, you know, these You know, marketplaces these gig marketplaces like an Upwork or a freelancer.com or , you know, and your traditional staffing firm on the far left.

Like they're very different models going after very different you know, classes of talent. Like if you put a request out on an Upwork for on-prem. Traditional contingent labor. Like, no one's coming to your office, you know it, you know, so you're dealing with a different group of talent. I think the holy grail, which is what everyone's kind of go to is get having a self-serve model for on-prem labor. Right? So bringing these platforms, you know, and I, I'm not seeing that there's not a world where those platforms work. Those, you know, self-serve gig platforms. There is absolutely a world where they work. I would argue that I do think they need to move into the enterprise because I think the lifetime value of.

The the, the client is actually you know, you, you actually lose money in the SMB space, but that gig model, but so I think they have to move to the enterprise, but as they move to enterprise, I think the holy grail is that ability to have W2, you know, labor delivered in a more self-serve fashion.

And, and, maybe on a project basis. And so I think that's, to me, the interesting, you know, thing that we're seeing happen and, and you have, you know, folks like, Matthew, who's basically starting from scratch, building an online first staffing firm leveraging the best of that, you know, you know, folks like Marlon with technology that enable you to do all of this.

Right? So I think it's, it's really exciting time as this happens.

Marlon Rosenzweig: But may ask Jonathan, so you, I think there were two things, right? You said sort of the, the online platform versus the traditional staffing firm and the sort of the main things that distinguish the two is you said the tax form W2, right.

And the second one on-prem versus remote. And, you know, I mean, obviously now everything's remote, right? At least sort of, you know, the areas that we are, it seems, it seems the models that naturally converging. And then if you talk about the tax form, I think, you know, weekend process W2, or 10 99, it doesn't make a difference to us.

We look at the type of engagement that we see, and then we give a recommendation and the client, according to that risk profile can say, I want this or this. Right. Which I think. Those things should be fluid almost. Right. We see a lot of clients that always go W2 just because they don't really understand it.

Right. And, and, you know, that's perfectly fine cause they don't want to, you know, they don't want to get into this, but I don't think the main. The main distinction is the tax form or on prem or remote. For me, from my perspective, it's more, one is sort of the, the white glove high touch, which is the traditional staffing firm, you know, you get a steak dinner you know, someone sends you a present at the end of the year.

You know, you talk through candidate profiles, all of this versus the other one is the self service, which you've mentioned, which inherently is, you know, a little bit more cold, but I think those, those two things that's really, you know, that dimension that the white glove service versus the self service, that is the distinction.

I think everything else is, is could be congruent, to be honest, the tax rooms can be the same on-prem or remote can be the same, but the, the, the, the layer on top is different. And I think. You know, no staffing owner will object to the idea to keep the sales force and they, you know, cultivate the client relationships.

If the clients would only then go onto a platform and do the work that will be fantastic for gross margins. And I think everybody would agree. And I think as, as soon as the matching technology is as good as your internal recruiters, you know, as soon as we get to that tipping point where, you know, some of the platforms already.

Yeah. I think that's where you will see as sort of a converging of those two models. And then, you know, one will prevail.

Jonathan Kestenbaum: Yeah. And I just, I just want to say, I totally agree with what you're saying. Just to be clear on what I was articulating is I think it's just historically how these things have evolved, right?

So historically these marketplaces started with price arbitrage, oversee labor. They've moved to low skilled labor, you know, you know, and now it's, it's still predominantly marketplaces of folks. It's it's you, you kind of opened my eyes when you said everyonesremote. It's true. I should rethink how I articulate it now, but you know, traditionally been marketplaces of folks that, that didn't want to have I guess the better way to say it didn't want to have longer-term gigs.

They wanted like short term gigs, not longer term projects, like the four to six month projects. And so I agree completely though, that you're starting to see this conversion convergence accelerated because of, you know, the, the market.

Marlon Rosenzweig: Which is fantastic for everyone.

Nick Ellis: There was an interesting theme here.

I'm hearing it, or you have the platforms and then you have the people that operate on Matthew. You use the term digital transformation. I spend a lot of my days at AWS talking about this with executives and the importance of executive alignment and follow through. I'm curious what each of your observations would be for traditional staffing firms in terms of what types of skills they need to bring into the org? What changes in their people structure. They oftentimes encounter because my experience has been, you can't just paste the platform on top of the old staffing model. You do lose some recruiters, you refocus on sales, your compliance and ops lean out a little bit.

And I guess I'd be curious. What types of internal changes from a team composition perspective or skill base, do you see these traditional staffing firms have to learn or acquire.

Matt Pierce: Yeah, I think it's interesting because a lot of times we, as you know, the experts in the room from a staffing perspective, talk to our clients about upskilling reskilling, their labor force.

And I think we really need to think about if you're a legacy staff. Agency, uh, you have a lot of domain knowledge and expertise and great people in your organization, but at the same time, you need to bring in digital experts expertise in order to stay ahead and so, are you going to completely switch out your workforce or are you going to upscale and transition your workforce and to maybe, you know, a recruiter transitions into a data analyst, right?

Or something of that sort. So I think it's something that it's, we need to start bringing people into these legacy staffing models who are yeah, strong from a technological perspective. And we need to start thinking about rescaling and up-skilling our current workforce. So it's just, it's just one thing that I've noticed.

You don't want to kind of switch out the whole organization. There's a lot of value in in that culture, but you can't create fear of change and people losing their jobs. So you just, you got to figure out the, you know, thread the needle there.

Nick Ellis: Yeah. Yeah. That change manage needs to be difficult. We've got about two more minutes before we're going to be asked to look to take questions.

Marlin, Jonathan, I wanted to offer you each about a minute, you know, final thoughts maybe on that question or something else we haven't talked about. And then for folks in the audience, if you want to use the chat function and start to drop your questions and I'll look for those and we'll be happy to turn to those in just a moment.

Jonathan Kestenbaum: Yeah. I would just add, you know, I think You know, the big questions traditional staffing firms ask themselves, it should be build this technology and become a tech company, or should we buy this technology? And they're, you know, they're always thinking about getting a higher, multiple on a sale and in some cases get a higher, multiple on the sale.

You know, I would argue that, you know, you're only a technology company. If you sell the technology, you know, in the market, like, you know, leveraging technology, the lower, your operating expenses, you could do that by renting technology. You know, but it depends on the company, but you know, for, for the companies that are leveraged.

You know, existing technology to streamline their business processes. You need product owners, right? You need someone like inside your organization that's focused. Is that product like making sure you're getting the most out of it. You're you're you have a direct line of communication with the technology company.

You know, I'd argued to be, you know, it's hard to be a tech company to, to just be building technology if you haven't done that traditionally. And, and I think that you know, processes, the other thing that folks don't realize they need to change. You know, I think that I can't tell you how many companies we've advised to implement a CRM and then they call us and say, now what my recruiters are working 50 wrecks, like what do we do?

Right. So that's my thoughts. I just want to say high five to you, Nick. I mean, these panels are really great when you have great questions and I thought you, you came to the table with some great questions, so thank you.

Marlon Rosenzweig: Okay.

Nick Ellis: Thank you, Jonathan. Marlon, uh, parting thought from you. And then again, if folks have questions, feel free to drop them into the chat and I'll start to pull those up.

We've got about 10 more minutes here in this session.

Marlon Rosenzweig: Yeah. So I, I think, you know, Matt, would you set the, the transition within a traditional staffing firm you know, that's a challenge in itself and I think, you know, also sort of doubling down on what you said, Jonathan, you know, technology building technology is very, very difficult.

It may not seem like it from the outside, but it is very, very difficult. It's capital extensive. And I think it may not be underestimated. The only thing I would say, you know, being sort of in the operating field every day is change, takes time. You know, you don't need to convert all of your clients tomorrow to the new platform, run a hybrid model for a year, run hybrid models for three years.

Talk to your customers, the ones that want to use the platform. Perfect. Give them a little bit of a discount, right? You will know, keep your contribution, margins, your gross margins, and much, much higher on the platform. Give them all a 10% cut on the hourly rates and you know, you've making more money. The talent's making the same money and the client is saving.

Everybody's happy and you will always, you know, you always have like 20, 30% of your clients that are like, no, I like my steak dinners and I want to pick up the phone and I want to talk to somebody and send an email and that's, that's fine. Right. We don't all drive the same cars. We don't all live in the same houses.

I think, you know, embracing that yeah. Is, is, is part of the change. So, and, and, you know, I hope I'm making the change look less daunting than it may look if you think about it and. Black or white scenarios. That's great.

Matt Pierce: Touch on one thing real quick. We've danced around it a little bit. And I just think it's important as like, leaders of, of the staffing industry to start talking about this is like we, the workforce technology is innovating and changing far faster than policy.

And like, we have to start thinking about like this fractional employment model. We've got, the number one cause of bankruptcy in our country is medical bills and 70% of people who have health benefits get them from their employer. And now we have platforms that are facilitating millions of people's employment.

And you know, they're really debilitated by that. And if they have something come up, it's a, it's a huge challenge. And so I think as we're talking about this innovation. You know, we, we've got to think about you know, the, the 360 view of it and how it impacts our, our country and our workforce at large.

And so I just wanted to plant that there, cause we've touched, it touched on a little bit, but I think it's an important piece of it.

Nick Ellis: Yeah, no, it's a great point. I'd actually be curious to get each of your quick takes. You know, we have a new administration in the US obviously labor law has been contentious both at a state level and at a federal level, you know, the 10 99 W2 dichotomy, you know, to your point, there may be a third way.

I'd be curious, maybe Jonathan start with you and then Matthew and. If you could make one recommendation to president Biden and his administration right now to help support the staffing industry or fixed what you see as a critical problem. What, what, what might it be?

Jonathan Kestenbaum: Yeah, so I, I hate sharing political views publicly, but I am a big supporter of the, of the staffing industry and its growth.

And so, you know, I would support a lot of the immigration reform that, you know, I think a Biden administration wants to You know, do you know, I think, I think that it's important that you know, we, we open our boaters and borders and allow these workers to get jobs you know, in the U S.

Matt Pierce: Yeah, I'll just double down on what I said. Like we have to figure out fractional employment and I think there's really good arguments on both sides of the 10 99 in the W2 space. That's a very binary solution to, you know, um, a landscape that's ever changing. That's very different than there are two binary policies.

We we've got to figure it out. It's breaking the system in a lot of different ways. As I mentioned, like, you know, bankruptcy is caused for medical bills, which is tied to employment insurance. So yeah, that's my.

Nick Ellis: Marlon.

Marlon Rosenzweig: Yeah, I totally agree with Matt. I think health insurance, you know, especially being a European where everybody has health insurance, and then I come over here and just, you know, I didn't even know this was a topic at first that people talk about, but I think, you know, the, the data points that I go off from, I sort of, you know, freelancers make more money on average than traditional W2 employed people. And then as a percentage, freelancers have more health insurance then you know, normally employed people. So, you know, while, while I believe we need to solve this and Biden should probably nudge health insurance companies to extend their offers to two freelances a little bit better than they currently are.

I. You know, I'm, I'm a firm believer that the free markets would probably take care of a lot of that stuff. You know, there's a lot of freelancers. If there's 50 million freelancers that want to buy houses then banks suddenly figure out how they can underwrite mortgages for freelancers without, you know, W2 records.

And it does work. So I think, you know, just providing the freedom for the free market to find solutions for freelances. That's I think all I would ask. Yeah.

Nick Ellis: Great. Do you have a couple of questions that have come in? So let me put this one out there. Just first come first serve I see a question here from InDEEP and I'll read it aloud.

His question was what happens to MSP or VMs system. Who see themselves as tech for staffing I'm sorry, as tech for staffing agencies going through a digital transformation. So I think the question is what happens with MSP VMS systems as these platforms become more prolific, do they stay, they merge, please?

Anybody who has a comment would want them to?

Jonathan Kestenbaum: Yeah, I talking about MSP.

Matt Pierce: Okay. I would just say like, this is Jonathan laid out kind of like the landscape and the convergence previously. And you know, our approach at trusted health is we are a technology plat platform that facilitates, you know, the match and we act as the employer of record. And the staffing agency. We look at the MSP and the VMs as partners of ours, right?

Like they are really providing value to us on the demand side of the equation. They have relationships that we don't have. Our core competency and expertise is to really drive candidate acquisition, drive efficiency from a matching perspective. Drive efficiency of, you know, marketing lifecycle systems behind it, payroll, et cetera.

So I think MSPs and VMS is need to innovate just as staffing agencies do. And the ones that, that do have definitely a place here and those staffing platforms who come into the market, who might have some ignorance or arrogance to a point where they think that the MSP and VMs is just going to go away.

I don't think that's, that's the best way to approach an industry. And I think looking at, you know, a rising tide raises all boats and VMs and MSPs can definitely be a part of the equation going forward.

Jonathan Kestenbaum: Let's say that there's significant disruption coming to that space. You know, a lot of this stuff, you know, around direct sourcing, you know, I agree with Matt, like it's going to exist just in a different form. It's been significantly commoditized. You know, and I, I do think that don't be so MSPs that win and some that, that, you know, get disintermediated by protection potentially like a direct sourcing platform.

Nick Ellis: Right. Bear with me one second. Let me look through, we've got a few more comments coming in here. Super as another question.

A very typical question I'll ask, and I would see if we have an answer coming from fattiness specifically Matthew, I think you said do you think the public option parentheses providing direct consumer access to Medicare being added to the ACA would assist with the fractional employment concern?

Do you have a point of view on that Matthew?

Matt Pierce: I, I don't feel like I'm a sophisticated enough in the area to really like comment on it in a, in a meaningful way. So I generally say I would lean towards a green that that is, that would help, but I'm definitely not an expert in space.

Nick Ellis: Okay. Well, good.

We've got another question came in from John. And then I think we're coming up on time shortly. Yeah. But John's question was the front office digital transformation from legacy systems has been a hot topic. And it sounds like this team has had a lot of experience with that is curious if there are any specific challenges transforming the back office, specifically the pay bill systems any insights or experience you might share that you've seen with those systems and change.

Jonathan Kestenbaum: Yes, we do a lot of obviously transformation work. You know, I'd argue, we spend most of her time on the front office, but that being said there's innovation around the back office leveraging RPA tools. We call them, they're robotic process automation. So being able to take data from one system.

Run a process on that data and putting it back into another system. So, I, I think that's where we're seeing the innovation today around back office, there are some really interesting new back office players, but for the most part, folks are taking the existing especially the larger companies that have to work with the large enterprise players taking those, layering on some robotic process automation to, to.

Things, a little more seamless and connect the systems a little better. And they're able to come

Matt Pierce: out on top.

Nick Ellis: Thank you. It looks like we're just at time. I just want to take a moment. Marlon, Matthew, Jonathan lovely to meet you in a couple of instances and to see you again, Jonathan, and just hear the conversation, obviously, a lot of change of foot. I trust people can find you on LinkedIn if they want to follow up directly or reach out.

And I'll just thank everyone in the audience today for the time. And look forward to doing this again next year. Hope you have a great week.

Matt Pierce: Thanks everybody, everybody. Bye. Bye.

Partners

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Speakers

Nick Ellis

Jonathan Kestenbaum

Marlon Rosenzweig

Matt Pierce

Duration

40

min

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