Growth in Online Talent Platforms Paves Road to Fuller Employment
The power of a digital platform is not always apparent until it reaches a certain critical mass. For online talent platforms that tipping point is growing near, according to the 2015 McKinsey Global Institute Online Talent Report.
Starting from their finding that 36% of global employers say they cannot find the talent they need, McKinsey’s researchers set about to analyze how that need can be addressed by online talent platforms (OTPs). McKinsey’s definition of an OTP encompasses not just career employment sites like Monster and Linked In, but also on-demand marketplaces for hiring all manner of temporary talent in a pinch, from Task Rabbit for errand running to Graphite for finding a temporary CFO.
McKinsey’s study takes a macro approach to their analysis, rather than honing down on questions such as how large a percentage of the workforce is now freelancing – though it does mention a percentage of temporary or independent contractors that’s much lower (a total of 12% of the total adult workforce) than either of the estimates in the Freelancers Union and MBO Partners reports covered in our previous post.
This report celebrates the positive potential of OTPs and their impacts on the global economy: bringing transparency and efficiency to labor markets, supporting economic growth and improving work outcomes for millions of under-employed or unemployed adults.After crunching all the numbers, they estimate that OTPs can increase a company’s output by up to 9 percent and lower HR costs by up to 7 percent (including savings on recruiting, interviewers’ time, training, and the various efficiencies that can be gained by hiring more productive workers).
The report also concludes that between now and 2025, OTPs will
- Help raise labor productivity by better matching the right people with the right jobs;
- Reduce unemployment by shortening job searches and enabling matches that would otherwise not have happened;
- Serve as a resource to draw out untapped potential: The report estimates some 200 million people who are not in the labor force or are currently working part-time could add at least a few more hours per week through contingent work platforms. Another 60 million could find jobs that better match their skills or preferences.
- Have the greatest potential for high-tech and professional services firms, both of which depend on specialized, expensive, and hard-to-find talent. These firms can also benefit from applying online talent platforms internally to make it easier for their employees to find expertise across geographically dispersed organizations, and to form more compatible and productive teams.
- Contribute $2.7 trillion annually to global GDP and increase global employment by 72 million FTEs.
- Aid in new business formation and innovation. The availability of freelance help has vastly reduced the cost and lowered the barriers to starting a business.
McKinsey predicts that existing platforms will continue to expand their networks, new platforms will be created, additional functionalities will be added, and the data sets created by this activity will grow richer and deeper. Which means we can expect even more robust reporting like this in future years.
Go here to see a full copy of the MGI report.