The rise of internet marketplaces has democratised our world, as people are able to solicit the opinions of real users, buy and sell to, and access services from anywhere in the world at any time.
What started out as sharing of information and advice online, such as holiday and restaurant review sites like TripAdvisor and Yelp, quickly progressed to transactional businesses. This meant people could buy and sell to each other. The dominance of Amazon and eBay started here and continues today.
While eBay and Amazon are making a fortune, former heavyweights such as Dick Smith and Barnes and Noble have lagged and fallen by the wayside, trying to adapt. Furthermore, businesses such as The Iconic, Warby Parker and jet.com have established themselves and thrived as online-only retailers, while big businesses like Woolworths have adapted to become multi-channel, but need to be nimble to keep up.
In the last few years, marketplaces have evolved again, and we’re seeing a new phase; alchemy marketplaces. Invoking the medieval discipline of turning base metals into gold, alchemy marketplaces are so-called because they support all parts of the buying chain to create value, not just a multinational platform profiting from a wealth-creating base of sellers.
They combine the networks and workflows of the online world (apps and web platforms), with real world people and things such as transport (Uber), accommodation (Airbnb) and on demand workers (Freelancer). They are accessible, transparent and ubiquitous.
Businesses are now realising that they can apply the same marketplace model to professional services, not just consumable products like taxi rides and hotel rooms. They can get expertise and advice from a marketplace.
Until recently, the best professional services were traditionally only accessible to bigger business players, who were able to afford the retainers and fees of big recruitment, law and consulting firms. Online marketplaces have pushed the professional services industry into a more equitable phase, where a small or medium business can also access the best in the business, and pay on a fee-per-job basis. It could spell the end of the dreaded retainer fee as we know it.
The technology embedded into alchemy marketplaces has created a much more user friendly experience, with less dependence on “online specialists”, giving many people and smaller businesses access to a wider customer base online, which in turn has led to huge leaps for companies which formerly operated mainly offline.
Suddenly it has become the norm for professional services companies to operate in an open and global marketplace, and in a far more cost effective way. Services such as Airtasker and UpWork are changing the way businesses access and provide quality professional services, and other industries are now seeing the benefit with the legal industry even offering online services. Professional advice is more accessible and vastly more affordable to SMBs today than ever before, giving them the tools they need to remain competitive in a globalised economy.
One of the most valuable professional services are recruitment specialists. Research company IBIS estimates that there are 92,800 recruitment professionals in Australia, but 38 percent of Australian businesses report that they struggle to fill vacant roles. The recruitment professionals need to be better connected with the businesses looking to hire. It is clear that recruitment is ripe for digital disruption as people innovate to attempt to solve this ongoing problem.
The technology developed through business-to-business alchemy marketplaces such as Search Party is now providing recruiters with the tools, automation, analytics, and most importantly reach to connect with the businesses that have the right roles for their candidates. Alchemy marketplaces allow recruiters to compete for a larger slice of business in a peer-to-peer environment.
Similarly, small businesses are able to access top quality recruitment services as and when they need – giving them access to the quality of candidates that was previously only accessible to large companies with deeper pockets.
Currently less than 3 percent of the $350 billion of revenue generated from the recruitment industry takes place online. With the benefits of utilising online marketplaces clear to see, recruitment is set to see major disruption in the coming years.
Ben Hutt is CEO of Search Party