Prosourcing.org. The Next Step. in the Evolution of Hiring. Hiring Outsourcing Crowdsourcing prosourci ng. produced by : Prosourcing.

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1 : The Next Step in the Evolution of Hiring Hiring Outsourcing Crowdsourcing prosourci ng produced by : Prosourcing.org

2 Tabler of content Introduction...page 3 traditionnal hiring...page 4 outsourcing...page 5 crowdsourcing...page 7 prosourcing: the next step...page 9 conclusion...page 14 about the author...page 15 2

3 INTRODUCTION Talent is a company s most valuable asset. Building and sustaining a talented workforce impacts brand, quality, customers satisfaction and ultimately the trajectory of the company. In recent years, the structure of a modern organization's workforce has completely changed. Companies are no longer restricted to hiring a new person each time their business encounter a new need. Alternative outsourcing methods allow operations to be completed at a high level outside the organization. Eliminating the need to expand the in-house team. These methods allow a business to access a wide range of talent, increase efficiency and decrease costs. Today, there are three primary categorizations of leveraging labor. TRADITIONAL HIRING: Attract, screen, select, hire and train individuals internally. OUTSOURCING: Contract out work directly to third party organizations or individuals. CROWDSOURCING: Obtain needed services, ideas, or content from a large undefined pool of potential labor. Each approach can locate a person capable of completing necessary business tasks. But, a new outsourcing methods has emerged. It allows a business to better leverage the labor pool, locate top talent and effectively utilize talent to produce results. This new solution is prosourcing. PROSOURCING: Prosouring is a technology driven outsourcing system to fulfill international projects. It generates professional profiles based on social data and parlays this information to match skills with business tasks. This whitepaper explores the various outsourcing methods, details the evolution of hiring practices and introduces prosourcing; the next step in the outsourcing evolution. 3

4 TRADITIONAL HIRING Traditional hiring is the process of finding, evaluating, hiring and paying a worker a salary or wage to complete necessary business tasks internally. Businesses invest a great deal of time and money into finding the right people. And they should. A business success is directly tied to having access to a strong internal team of A players. A strong in-house team has its advantages. ADVANTAGES OF IN-HOUSE HIRING Control: Allows supervisors to have greater control over employee activity, time allocation and quality. Proximity: In-house employees are closer to the business so they better understand the business needs, expectations, and brand/mission. Motivation: Providing employees stake in company s success and team camaraderie gives them strong incentive to deliver results. Differentiation: Having direct access to smart skilled people can separate a business from the competition. Evolution: Employees can evolve with the company and increase their skills/ efficiency as they understand what the business needs. The process of locating, attracting, securing and hiring this talent is often resource intensive and difficult. A company must network, post job ads, and hire recruiters to locate the best candidates. This process attracts a great deal of candidates. The average professional position receives 89 applications 1. But, despite the high volume, these candidates are often not the high caliber talent a business seeks. Recruiters must sift through applications and conduct interviews, in hopes of finding the right person. It is expensive to hire a recruiting staff, purchase application software, recruit at colleges, and pay employee referral incentives. This process costs a large company (10,000+ employees) an average of $1,949 per hire and a small firms an average of $3,665 per hire 2. This process is well worth the effort if the right person is found and hired. However, often this right person is not in the application pool and a company must settle for an under qualified candidate. This mistake can have lasting negative effects. To mitigate these risks and high costs, more and more business have turned to outsourcing. 1: Investments in Recruiting. BERSIN & ASSOCIATES RESEARCH REPORT. Retrieved : For Smaller Firms, Recruiting Costs Add Up. Wall Street Journal. Retrieved

5 OUTSOURCING Outsourcing is the act of contracting out business processes, that would otherwise be performed internally, to an outside third party individual or organization. Outsourcing was formally identified as a business strategy in Since then it has challenged traditional hiring strategies 3. Today, it is estimated that 40% to 50% of the world s top 500 companies are utilizing some form of outsourcing 4. And the reliance on outsourcing continues to grow. The outsourcing industry is forecasted to have global revenues of almost half a trillion dollars in Companies are adopting outsourcing because it provides many advantages over traditional hiring. ADVANTAGES OF OUTSOURCING Reduced Costs: Eliminates overhead costs associated with hiring, training, housing, and providing benefits to employees. Outsourcing also provides access to cheaper labor in foreign markets. Focus on Core Competencies: By outsource secondary business processes a company can focus on the things it does best. Skilled Expertise: Specialized third parties provides access to skilled labor without having to locate and train new people. Increased Efficiency: Experienced vendors with more specialized processes can streamline the business process. Less Management: Saves time and energy by eliminating the need to directly manage employees. COMMON OUTSOURCE INDUSTRIES According to a recent executive survey conducted by Deloitte, 60% of companies interviewed outsourced some aspect of their business. The survey revealed the following business processes are outsourced most often 6. 3: Assessment of Business Process Outsourcing. Lawgical Practice Consulting Group. Retrieved : Should you outsource your workflow? AktrionFM. Retrieved : Outsourcing Opportunities in the MENA Region Dubai Outsource Zone & Frost & Sullivan. Retrieved : Deloitte s 2012 Global Outsourcing and Insourcing Survey Deloitte. Retrieved

6 most common outsourced services Financial Services Information Technology Sales & Marketing Human Resources Others These processes are commonly outsourced because they: 1) tasks that be easily duplicated, or 2) require an extremely specific set of skills and credentials. Commonly outsourced process are repetitive tasks that can be easily completed by someone with specific expertise. However, more unstructured creative process, such as design or innovation, are harder to outsource. A new method of task completion emerged to meet this need. 6

7 CROWDSOURCING Crowdsourcing is the act of taking a function once performed internally and outsourcing it to an undefined large network of potential laborers in the form of an open call 7. Crowdsourcing is based on the idea that the crowd holds more wisdom and power than a single person. This is best demonstrated in an early 20th century experiment. At cattle expo in England, a scientist offered a prize to the attendee who could best guess the weight of a large ox. Over 800 guesses from expert farmers and butchers were submitted. Analysis of the guesses revealed that no person correctly guessed the weight of the ox, but the average of the 800 guesses was within 1 lb of the ox s actual weight 8. Through crowdsourcing a more accurate result can be achieved. The term crowdsourcing was originally coined in a 2006 by Jeff Howe 9. As the name suggests, crowdsourcing is outsourcing, but to a crowd. Crowdsourcing works by sending an open call out to many outsourcing options. Returned are a diverse set of ideas, insights, and solutions form a variety of crowd members. This provides on demand timely results that are individualized and cater to a business s specific outsourcing needs. ADVANTAGES OF CROWDSOURCING Crowdsourcing can be used to complete large tasks with comparatively little upfront investment. It is estimated that using crowdsourcing over traditional outsourcing can cut costs by up to 70% 10. In addition to reduced costs, crowdsourcing has many advantages. Lower Costs: Crowdsourcing a task takes significantly less time and money than setting up a department or hiring consultants. Less Overhead: Crowd labor does not need to be trained, retained after the project s end date, or offered benefits and severance pay. Talent Seeks You: Rather than seek out qualified candidates, crowdsourcing forums allow talented individuals to come to you. Instant Hiring Potential: Once a business locates a crowd member that does great work, they can retain them for future projects or hire/contract them outright. On Demand: Rather than locate and hire an outsourcing firm, the open call format provides quick timely access to labor. Broad Perspective: The open call provides access to a wide range of ideas and laborers. 7: Crowdsourcing: A Definition Crowdsourcing.com. Retrieved : Galton, Francis. Nature, Vox Populi ( ). 9: The Rise of Crowdsourcing Wired Magazine. Retrieved : Crowdsourcing vs. Outsourcing: Time to go our separate ways Daily Crowdsource. Retrieved

8 Wikipedia is one of the earliest and most successful applications of crowdsourcing. The online encyclopedia is written and edited entirely by the crowd. Over time, the crowd has added almost every topic making it the most comprehensive encyclopedia ever. Since the launch of wikipedia, thousands of crowdsourcing platforms have emerged. These platforms complete a variety of tasks by leveraging the crowd in various ways. Below four main ways crowdsourcing is being used 11. crowdsourcing categories MICROTASKS MACROTASKS CROWDFUNDING CONTESTS defined Breaking down a large project into a series of tiny tasks that are completed by multiple individuals within a crowd. Presenting a project to the crowd and allowing the knowledgeable portion of the crowd to accept and complete the task. Raising money for a specific cause, project, or other use by accepting small amounts of money from multiple individuals. Asking a crowd to provide work or ideas and only providing compensation to the chosen entries. best for Data Valuation Research Image Tagging Translation R&D Product Innovation Project Fundraising Artistic Support Startups Market Research Logo Design Business Names key players Crowdsourcing provides multiple outsourcing options and can solve complex problems. Unfortunately, it can be difficult to manage this crowd and frustrating to sift through the results to find the right option. These shortcomings of crowdsourcing have lead to the creation of prosourcing. 11: Umbrella of Crowdsourcing. Collabdocs. Retrieved

9 PROSOURCING: The Next Step Prosouring is a technology driven outsourcing system to fulfill international projects. It generates professional profiles based on social data and parlays this information to match skills with business tasks. Prosourcing builds on the crowdsourcing model. It pulls from the same large pool of labor but eliminates the frustrating process of sifting through and managing this crowd. Prosourcing gathers data and applies filter to locate qualified outsourcing options. It then completes business tasks by allocating work to the various options it recognizes as qualified. The result is a more tailored, effective and comprehensive hiring ecosystem. Prosourcing is able to categorize, match, and manage this labor thru the use of technology applied on the prosourcing platform. PROSOURCING PLATFORM Applies filters Client Prosourcing Platform Locates qualified contractors The prosourcing platform gathers data and organizes the labor crowd. It starts by collecting social data, public information and online profiles (such as Facebook and LinkedIn) for all potential labor options. The platform then categorizes this data to create a comprehensive resume for each contractor. It contains all information about the laborer s location, expertise, passion, social reach, reviews, and past work history. Similar to a dating service, the platform uses these detailed profiles to match labor and tasks based on compatibility. It filtering labor to find the right expertise, passion, experience, and location for that specific project. The platform then allocates various parts of a project to the qualified laborers. The labor is managed by the platform from start to finish. The result is high level task completion without the management. Allocates tasks to qualified contractors 9

10 ADVANTAGES OF PROSOURCING Prosourcing can be used to complete creative tasks associated with marketing, software development, application development, website creation, design, consulting and IT security. Area specific platforms help businesses locate and manage the specialized workforce for that field. Here is the value prosourcing can provide a business: Process: Rather than work on a project in hopes of being selected, experts are pre chosen and paid to complete micro tasks or parts of projects. Filters: Uses social data and profiling to qualify the the crowd and deliver more powerful results. Global Capabilities: Can locate professionals with localized expertise in a specific foreign market. Cost-Beneficial: Provides access to contractors at a lower price than hiring and training new employees or using a large outsourcer. Scalable: Can help accomplish large goals by allocating work to a wide range of contractors with diverse expertise. Less Management: No need to find, manage and pay various contractors or freelancers. This is all handled by the prosourcing platform. CONTRACTOR SATISFACTION Business clients benefit greatly from the prosourcing process. But, they are not the only beneficiaries. The labor pool also benefits from this process. Unlike crowdsourcing, where contractors submit work in hopes of being selected for the project. Prosourcing allocates tasks to contractors before they start working. This provides the contractors with less uncertainty, and more security. Prosourcing s ability to analyze social data, rather than just professional degrees and credentials also appeals to contractors. It has the ability to match them based on their likes and interests. For example, if social data indicates that a contractor is passionate about mountain biking, but not tea. The platform will match this contractor with a marketing campaign for mountain bikes and avoid assigning him a marketing campaign for tea. The freelancer is more satisfied because he is working on a project related to his passion. Effectively satisfying all aspects of the Labor Hierarchy of Needs. 10

11 Labor Hierarchy of Needs Prosourcing Difference Self- Esteem Belonging Self-Actualization Ability to pursue gratifying projects that one enjoys Perks, Raises, Higher Compensation Team/Responsibility Safety Job Security Physiological Wage Similar to other methods of employment, prosourcing provides laborers compensation, job security, responsibility and recognition. The prosourcing difference is its ability to fulfill the last step of the pyramid. It allows contractors to work on more fulfilling projects. In return, they produce stronger results. 11

12 STARTING THE PROSOURCING TREND A great deal of companies have already begun building prosourcing platforms. These companies are gathering professional data and using it to better match freelancers with tasks. Below are some of the companies building platforms and moving into the prosourcing space: Platform locates pro product testers and matches them with Software companies. Prescreens online marketing experts to locate pros with localized market knowledge Uses an algorithm to find out what people like and match them with brands Connects startups with qualified investors and potential employees Social Media Start-Ups Testing Contract Work Platform prescreens contractors using past work reviews, past client feedback, and test scores. the prosourcers Online Marketing Labor Big Data Professional Network Platform uses a skills test to qualify contractors and match them with tasks. Platform connects companies and governments with qualified prescreened data scientists Recruiters can assess social data such as skill, endorsements and experience of potential employees 12

13 REAL-LIFE EXAMPLE A U.S. winemaker based in Napa Valley grows, bottles, and sells a high-end wine. This wine has strong sales throughout the United States, but wants to expand and sell more wine abroad. It identifies Brazil as the foreign market with the most potential. However there is a problem, this winemaker has zero marketing expertise in that market. It could hire a comprehensive marketer. But, this person is hard to find, expensive, and also has limited localized knowledge of the Brazilian market. Instead they decide to use prosourcing. The prosourcing marketing platform locates marketing pros in Brazil that have localized knowledge of the wine industry. It allocates marketing tasks to various pros and manages the work. The result is an increase in Brazilian web traffic on the winemaker s website and a stronger brand presence in Brazil. Prosourcing allowed this winemaker to move into the Brazilian market with little effort or capital. Screens labor & assigns tasks Winemaker Prosourcing Platform Outsources Marketing Pro Marketers Prosourcing 13

14 CONCLUSION An internal team is still critical to a business success. But the hiring landscape has changed. More and more business processes are being outsourced. A two person start-up can now complete necessary business tasks without hiring a huge internal team. They can outsource operations to skilled labor who complete these task more efficiently and at much lower prices. These process used to be outsource to specific third parties. Then there was crowdsourcing. Now, there is prosourcing. Prosouring is a the next step in outsourcing. It generates professional profiles based on social data and uses this information to match skills with business tasks. By allocating and matching labor, prosourcing provides a stronger outsourcing option and more complete hiring solution. Ideally this prosourcing trend will continue to evolve, ultimately creating a universal hiring marketplace. This marketplace will contain comprehensive resumes for every available labor option. Companies will no longer have to post various job ads, hire a recruiter, or search various employment websites. Instead they will have complete access to the labor pool and can easily search to find their ideal candidate. Workers will be better matched with positions they are passionate about and companies will get better access to pros. Prosourcing is the first step towards building this universal more effective ecosystem of hiring. The prosourcing space is still in its infancy and will continue to evolve and grow. To follow this evolution you are encouraged to visit prosourcing.org -- the new home for everything prosourcing. on Twitter to stay up-to-date on all the latest. And begin to explore prosourcing options that can improve the quality of your workforce. 14

15 ABOUT THE AUTHOR Anji Ismail Co-Founder and CEO of Capseo Anji Ismail is a French entrepreneur, educated at ESCE and EM Lyon Business School. After graduating, Anji successful launched his first company Capseo in France. Capseo is an online marketing platform that utilizes crowdsourcing and provides SEO and SMO services through managing a community of webmarketers. Recently, Anji moved to San Francisco join the KickLabs Accelerator and launch his new U.S. based prosourcing platform. DOZ will help U.S. companies locate and utilize talented online marketers abroad and move into new markets with ease. Please visit for more information. Nick Mathers KickLabs Nick Mathers currently works at KickLabs, one of the top technology accelerators focusing on digital media start up companies. Nick is very interesting in the development of the prosourcing space and is helping to launch prosourcing. org. Nick graduated from Santa Clara University and has spent time working on the Acquisition and Partnership team at Sharp. 15