Here come vertical talent markets

To be sustainable, they need to overcome five big challenges

What a game changer that little device has been. There are 5.5 billion adults and five billion mobile phones. Of these four billion are smartphones. Apple in January 2019 declared it had an installed base of 900 million iPhones. Google says there are now 2.5 billion active Android devices, 95 per cent of which are phones. The mobile phone enabled the creation of many marketplaces. A parallel universe is being created with marketplaces of all kinds going virtual. From entertainment to education there is a virtual marketplace where geographical boundaries become irrelevant. The mobile phone also created the base for new industries. Several technologies like drones have used mobile phones to create new markets and new opportunities. Talent markets are growing along the same patterns.

Horizontal, then vertical

Markets are first created horizontally. A new product or service has to have several different use cases to build a big enough customer base. Once the customer base hits critical mass, it then starts to create niche clusters.

When spreadsheets were created, adoption was rapid because a wide variety of scenarios can be handled using a spreadsheet. The spreadsheet can be used by accountants and chefs alike. One may use it to do financial analysis or run the balance sheet of the firm. Someone might use it to create a database of their books. Think of that as phase 1 of development.

In Phase 2, the same spreadsheet concept is used to create specialised software for accounting. That is an example of the use cases going from a wide customer base to serving a niche user. The spreadsheet can serve as a base for building specialised software. The pattern is always the same — vertical niche follows horizontal growth.

Vertical talent pools

Connectivity has created a marketplace for skills. LinkedIn alone has a user base of half a billion people of which 44 per cent are women. That is the marketplace for many working professionals. The accountant, the HR person, the digital marketer have their resumes on the site, making it easy to get discovered by an employer. As more sellers of skills join the network, it attracts more buyers who start signing up to get access to the talent pools.

There is a parallel universe coming up for skills. These are marketplaces for skills that are niche. Imagine a LinkedIn just for your field. Already there are marketplaces for niche skills popping up all over the world. There are marketplaces for those who are not looking for full-time employment.

There have been search firms that operate within a specific industry. In a hyperconnected world, the buyer and seller can find each other without having to look only in the neighbourhood. The talent marketplace becomes boundaryless.

Specialised skills market

LinkedIn solved the first problem by organising the unorganised professional workers across the world. While that database will continue to grow, the marketplace will evolve to create clusters for specific skill sets and specific demographic segments. This is the Phase 2 of talent marketplaces. Having experienced horizontal expansion, it is time to get vertical. These markets can get created by geography, specific skill sets or even demographic commonalities (eg, women re-entering the workforce).

The vertical markets for talent are growing consistently for the blue-collar skills. UrbanClap offers hyperlocal services in several metros and major cities. Wedding photographers, yoga trainers, interior designers, dieticians, beauticians, plumbers, are all hired, screened, trained and deployed. When it comes to white-collar jobs, the marketplace gets more nuanced.

Some platforms fix the price the customer has to pay and they do not allow the service provider to negotiate the price. This is where the marketplace for high-end talent gets messy.

The unsolved problem

Marketplaces must solve a few major problems regarding the business model. But the bigger challenge is to find a way to handle everything from manual work to even having CXOs on demand.

1. Make it easy to discover: Gig working platforms like Upwork have solved well to make it easy for the buyer and seller to find each other in case of low to medium skilled jobs. The gig worker gets listed and the jobs are allocated by the algorithm. The buyer sets the budget for the job. The seller can apply for the job they wish to. There is little room for individual negotiation. The platform ensures that the buyer and seller cannot post any personal information to enable direct contact. The work is also transacted through the site.

2. Background verification: Knowing the expertise levels of the gig worker can help to build trust in the buyer. Imagine being able to see doctors’ credentials and licences before they undertake surgery for someone (even if they are employed by a hospital). SpareHire is an online work marketplace that connects organisations with top-tier finance and consulting professionals for project-based work. They offer investment bankers, management consultants or investment professionals on-demand. CTOonDemand provides CTOs for non-tech founders. Ortho Care On Demand connects patients in need of urgent orthopaedic care directly to orthopaedic surgeons in their local area for an affordable, one-time fee set by that physician.

3. Customer feedback: Employers want to know what it is like to work with a gig worker. Is the person easy to work with? Does the gig worker have a track record of happy customers? This is where customer reviews help. The Uber and Ola driver ratings are available for all to see. The drivers, in turn, can see the reputation of the customers they have been assigned. Star ratings, comments, being tagged as a “Ninja” are all key ways to find people who have the skills and have a string of happy customers who can vouch for them. LinkedIn encourages people to write recommendations for people they have worked with. Gig work is extremely dependent on someone verifying the quality of work done.

4. Seamless payment for all: Payment system for gig workers must be made friction-free. Upwork and Uber have solved the payment problem by making payments instantaneous. Uber and Ola set the base wages for the gig worker. The payment for most workers is fairly uniform with limited opportunity for the individual to negotiate. Experts like to set their own price. They can work across the world. Knowledge search firms like GLG or AlphaSights provide such opportunities to experts. While GLG and AlphaSights set the tiered-hourly rate for the experts, freelance marketplace Fiverr is aimed at sellers who are often highly skilled; they determine the terms of the job and of payment themselves.

5. Reskilling and upskilling: The professional must be able to stay employable by upgrading their skills and knowledge in real time. Sometimes that may mean upgrading skills by being an apprentice to an expert. This is still an unsolved problem in most specialised marketplaces. LinkedIn has Lynda, SlideShare as a way to keep upskilling. This is still an unsolved problem for most niche talent marketplaces. Here lies a massive opportunity for each niche skills marketplace.

The talent marketplace is evolving. No single talent platform has so far solved all the five problems. Therein lies a big opportunity. The transition from looking at general talent pools to expertise-based talent pools for each profession (eg lawyers, architects); by demographics (eg women, retirees, disability, LGBTQ); by previous experience (eg, Military service) or even by duration of employment expected (eg, gig workers) etc. The list goes on. Many such marketplaces exist. It’s time now for talent management practices to solve the big five problems for each marketplace.

Abhijit Bhaduri is an advisor on talent management to organisations and a top influencer on social media

Published on June 19, 2019

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