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News & Insights

News & Insights

Workforce as a Service (WaaS)

The idea of harnessing work as a utility (i.e, like flicking a switch to turn on labor “power”) is gaining traction. Mary Meeker of Kleiner Perkins recently included it in her list of technology trends to watch (one of the few surprises in that presentation) and Gary Swart, CEO of oDesk, is now positioning his firm as one of the enablers of the trend.

Freelance marketplaces like oDesk, Elance, and Amazon’s Mechanical Turk are indeed maturing and the complex ecosystems of software firms around these marketplaces are also expanding exponentially so there is no doubt that this evolution of work is well under way already. Furthermore, long-term macroeconomic trends are accelerating the move towards a borderless labor marketplace with far lower overheads and much more flexibility than the traditional labor pool.

The evolution of labor is, of course, something that has been going on for a long time. The development of labor-saving tools based on emerging technologies (the cotton gin, the steam engine, the mechanical calculator) sped up productivity for a couple of hundred years and, as knowledge work eclipsed physical work and services overtook the manufacture of products, we saw the rise of different approaches to the “process” of work in the form of flex time and telecommuting. This latest stage, then, should not be unexpected, but most people are still hesitant to embrace it quite yet.

Like all true trends, though, workforce-as a-service (WaaS) is a genie that is not going back in the bottle. In fact, as soon as it is embraced and harnessed it will unleash a massive amount of productivity. There are several reasons for this:

  1. The immediacy of the labor. It can be literally “on tap” (for those employers who treat their virtual workers well), meaning that projects can be kicked off in minutes, not weeks.
  2. The speed of the work. By breaking projects into highly discrete tasks and distributing them across massive labor marketplaces, projects can be completed faster than ever before in human history. The principle is almost exactly the same as that of the packet protocols that make the Internet work.
  3. The cost. A true, global, open market for knowledge work is emerging and that means that, over the near term, the cost of low-end knowledge work labor will drop from something like $10/hour to $2/hr. (The cost of the technology required, however, makes the “fully loaded” cost more like $5/hour.) Traditional HR management overhead shrinks dramatically as well.

So what does the world look like when knowledge work is truly a utility? Process designers will standardize an increasing number of tasks into “tools” that are bundles of software and human activity. This will make it easier to swap out old processes for these “tools.” As a result, many types of knowledge work will become as measurable as the number of words per minute that a typist can type. Perhaps a new term for a unit of work (“erg-hour”?) will be adopted? Process flow charts will have little “work” icons showing where automated processes hand off to (heavily automated) human processes.

The only impediment to tapping into this potential is related to the design of work processes so that the promise of WaaS can be realized without slipping into the quicksand of super-fast microprocesses that go rogue and cause major headaches. That challenge, however, looks like it will be met with an avalanche of engineers, project managers, and massive investments that will give this trend legs.

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