February 8, 2018 – Roseland, NJ-based ADP has acquired WorkMarket, a cloud-based workforce management solution provider that allows companies to build and manage an integrated workforce across W-2 employees, 1099 contractors, vendors and other types of workers. Financial terms of the deal were undisclosed. With the acquisition, ADP builds on its current portfolio of payroll and human capital management solutions.
WorkMarket, founded in 2010, is headquartered in New York City. Backed by venture firms including Union Square Ventures, SoftBank, Spark Capital, Foundry Group, and Accenture Ventures, WorkMarket helps businesses manage their integrated workforce in a simple, secure and compliant manner. The company’s solutions include tools to source and vet independent workers, manage their engagements, and pay and evaluate these workers. In addition to offering freelancer management functionality, the company has extended its capabilities to help clients optimize how work gets done across any labor type. Its client base spans global brands, as well as small and mid-sized businesses.
“At ADP, we innovate by anticipating how the world of work evolves and how dynamics – like the rise of the gig economy – impact the needs of our clients and the modern workforce,” said Carlos Rodriguez, president and CEO of ADP. “WorkMarket allows us to provide ready access to a growing contingent labor pool and the tools to manage and pay them in a secure, efficient and compliant manner.”
Through this acquisition, ADP continues to help clients keep pace with change and manage growing complexity. “WorkMarket is a proven expert in freelancer management,” said Mr. Rodriguez. “We are thrilled to welcome their team to ours and to leverage our global footprint and bring scale to their expertise and technology.”
The rise of the contingent workforce is shaping the global workforce. ADP data shows that about 80 percent of U.S. businesses already rely on independent contractors and the number of contingent workers as part of the overall workforce is growing. By 2020 nearly 60 percent of human resource leaders will use a unified talent strategy for employees and contractors, according to Gartner. With this acquisition, ADP gains broad functionality for HR professionals to manage and have insights into this new picture of labor, which will be comprised of both full-time employees and contingent workers.
Workers Continue Taking Side Gigs to Bridge Pay Gap
Got a side gig? You’re not alone. According to new CareerBuilder research, nearly a third of workers (32 percent) do, compared to 29 percent last year. And more women than men have side work — 35 percent versus 28 percent.
Rise of the Gig Economy
A recent study released by Randstad US found that as early as 2019 as much as 50 percent of the workforce will be made up of agile workers, as nearly four in 10 (39 percent) workers said they are likely to consider shifting to an agile arrangement over the next two to three years. This movement is fueling an equally aggressive adoption of new workforce models that tap into both permanent and agile employees to combat staffing shortages, leverage globalization and fuel greater innovation for organizations.
The report concluded that by 2025, 52 percent of C-suite executives said their organizations would be much more committed to building an agile workforce; the average employer expects 68 percent of their workforce to be comprised of agile talent.
A separate study by CareerBuilder and Economic Modeling Specialists International concluded that hiring temporary and contract employees can help businesses sidestep talent gaps and remain nimble. The study showed more companies will be tapping into this labor segment, with temporary employment expected to add 173,478 jobs from 2016 to 2018 – an increase of 5.9 percent.
“Today, nearly three million people are employed in temporary jobs, and that number will continue to grow at a healthy pace over the next few years as companies strive to keep agile in the midst of changing market needs,” said Kyle Braun, president of CareerBuilder’s staffing and recruiting group. “Opportunities are opening up in a variety of occupations and pay levels, and this is a trend we’re seeing in a wide range of industries and company sizes.”
Massive Shift to Contract Employment Underway
Most workers (70 percent) and employers (68 percent) agree that by 2025 a majority of the workforce will be employed in an “agile capacity.” This is a wake-up call for business and HR leaders to quickly embrace and prepare for coming disruptive changes impacting how, when, where and by whom work is conducted.
Pros and Cons
But according to Rick Gray, chief executive officer of Chicago-based TalentRISE, it is useful to reflect on past trends and to consider what lies ahead. “There are pros and cons of an ‘on demand’ workforce,” he said. “In seasonal industries, it may be ideal and is not a new concept.” As CEO of an expanding recruitment consulting and talent solutions business, he said TalentRISE itself has leveraged on-demand talent by deploying a network of specialized recruiters for urgent client hiring needs.
The cons, he said, can include the erosion of loyalty and pride, the risk of a workforce of pure multi-taskers and no specialization, and perhaps even an entire generation running from gig to gig with little financial stability. “If this trend is inevitable,” he asked, “then how might it impact talent acquisition in the long run?” The end goal, he said, of getting the best workers deployed most quickly at the least cost possible will not change. “But how we all get there will,” he said.
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; Stephen Sawicki, Managing Editor; and Will Schatz, Managing Editor – Hunt Scanlon Media