The 6 Primary Segments of the US Workforce Solutions Ecosystem

28, February

A quality workforce is the lifeblood of any successful business. However, managing that workforce can be a ...

A quality workforce is the lifeblood of any successful business. However, managing that workforce can be a surprisingly complex affair, especially with the rise of the contingent worker.


While today’s businesses have the ability to operate in a more agile and flexible manner than ever before, various aspects of managing the workforce can lead to issues with compliance and maintaining a strong employer brand, among others.


This is where the workforce solutions ecosystem plays such a vital role. By helping companies of all sizes manage these essential tasks, this vital segment of the business world ensures that organizations have the right pieces in place to achieve their desired outcomes.

In this post, we will define the various parts of the US Workforce Solutions Ecosystem providing a general overview of the different segments associated.


1. Staffing


Staffing firms are perhaps the most used segment of the workforce solutions ecosystem. After suffering a pandemic-related decline, the staffing industry is well on the road to recovery as more businesses seek help in sourcing workers in a competitive market.


The staffing industry primarily focuses on temporary staffing solutions and what is referred to as “place and search.” As the name implies, temporary staffing aims to provide short-term staffing assistance for a broad range of organizations. The temporary staffing provider recruits and employs individuals who are assigned to the organization’s clients as needed.


In “place and search” organizations, the staffing firm aids companies in the direct hiring process. This encompasses attracting and pre-screening candidates for an open position within a client company. In addition to traditional staffing firms, many organizations are shifting to a more digital approach that uses algorithms and other digital tools to facilitate the process of sourcing and vetting candidates.


As of 2020, Staffing Industry Analysts estimate the global staffing market to be worth USD 445 billion with the US being the world’s largest staffing market with USD 136.0 billion of annual staffing sales, almost a third of the global market size.


2. Process Outsourcing


Many organizations simply don’t have the capabilities to oversee all vital workforce responsibilities in-house. As such, many choose to outsource tasks such as sourcing workers, managing benefits and so on. This enables them to focus more energy toward their core competencies.


The most commonly used solution is human resources outsourcing (HRO), in which a third-party vendor is assigned responsibility for all of a business’s HR functions. This includes payroll, benefits administration, hiring and recruitment, training and more.


Organizations that make heavy use of contingent workers will often enlist the help of a managed service provision (MSP), which manages and sources contingent talent. Within this sphere, direct sourcing has become increasingly widespread, wherein a direct sourcing partner helps a client build and maintain privately sourced talent pools of contingent workers.



3. Payroll and Compliance


While many staffing firms in the United States also provide payroll and compliance services, this isn’t universal. As such, payroll and compliance are accounted as their own segment within the larger workforce solutions ecosystem.


Due to the increasing complexity surrounding compliance in recording and categorizing contingent workers, many organizations are using an employer of record (EOR) to manage their payroll and compliance needs. An EOR assumes the responsibilities and legal risk associated with recruiting, hiring and managing contingent workers.


Working with an EOR essentially allows businesses to outsource payroll, benefits management, tax reporting and other core tasks related to the use of contingent workers.


4. Direct Work Engagement


Direct work engagement covers various ways that a company can directly source talent to complete necessary tasks. For example, rather than working with various staffing firms to fill open positions, a company might use its employer brand to form a direct sourcing program.


The organization will typically build talent pools with contractors who have previously engaged with the company, boomerang employees and silver medalist candidates to fill open positions. Other forms of directly engaged workers include seasonal workers, interns and consultants.


However, robotics process automation, which includes machine learning and artificial intelligence, is also being used as a form of direct work engagement. These systems are designed to handle repeatable tasks that are typically performed at a high volume, allowing office staff to focus on higher-priority tasks. In factory settings, physical robots may even be used to take over repetitive or dangerous work.


5. Talent Acquisition Technology


Talent acquisition technology encompasses the ever-growing range of tech products and services that firms use for candidate discovery, engagement, verification and processing.


For example, in the candidate discovery phase, available tools include talent platforms such as crowdsourcing platforms and talent platform aggregators that help organizations find qualified contingent workers. Other options for discovering talent include employee referral platforms, recruitment marketplaces and sourcing automation tools.


Quality engagement platforms can aid an organization’s efforts to successfully reach out to desirable talent. Tools such as texting and email technology, recruitment chatbots and a dedicated engagement platform enable stronger communication with top talent.


Many digitally based workforce solutions providers also use technology to perform crucial tasks such as identity verification and background checks — including social media screening and remote skills tests and interviews.


6. Other Workforce Solutions


Finally, there are many workforce solutions that focus on tasks besides acquiring and managing talent for an organization. This covers a broad range of solutions that aim to help manage the workforce.


For example, this could include an HR consultancy, which is typically hired to provide consulting services to help a business improve its own HR efforts. Ancillary HR services, such as providing relocation services for new hires or distributing retirement benefits, also fall under this category.


Many workforce solutions focus on the candidate, rather than the companies. Some companies provide outplacement services to help workers transition to a new career after their termination.


Performance assessment providers can help employees in the development of hard and soft skills through examinations and knowledge tests. In addition, many industries require ongoing training or accreditation. Third-party experts provide training to improve the skills and knowledge of each individual to ensure they perform their work safely and effectively.


Taking Advantage of the Workforce Solutions Ecosystem


Each element of the workforce solutions ecosystem provides vital products and services that enable businesses to operate in a more efficient manner. By helping companies attract and retain top talent — and ensuring that all compliance-related matters have been handled appropriately — workforce solutions providers like myBasePay are poised to help take your business to the next level.


With true turnkey solutions, myBasePay serves as an easy-to-implement extension of your company that can quickly become fully integrated with your processes.  


By using myBasePay’s employer of record services, you can outsource and automate those administrative tasks that are vital but don’t drive your business’s bottom line. You can pass employment-related liability on to a trusted provider that fully understands and adheres to compliance practices.  


myBasePay won’t just minimize your liability — we can also help your business connect with qualified suppliers giving recruiters access to dozens of roles that they need help filling. By managing employment from these early stages, our back-office solutions help you build a productive team while allowing you to focus on the activities that matter most to your future growth.


Make the most of the available talent in your niche by enlisting the services that matter most for managing your workforce.