Are we all going to be employed by staffing firms?

Over the last decade, we've seen a dramatic shift in the way people work. The concept of a traditional workplace has evolved from a physical office to a remote one. The average tenure of a tech employee has reduced from three years to 18 months, and with the current downturn, it's expected to shrink even further. With the end of the zero interest rate environment, companies are now more focused on managing their operational expenses. This means that employers want to limit salaries, benefits, and become even more reliant on AI-powered tools. They also want more flexibility in their OPEX, meaning more contingent labor.

In this ever-evolving landscape, Deel has positioned itself to be a big winner. This HR startup helps companies to manage their global hiring, payroll, and compliance from one centralized platform. They enable businesses to hire and onboard contractors and freelancers in 150 countries, taking care of all the compliance, payments, and tax obligations. As the world moves towards more contingent labor, Deel's platform provides a one-stop-shop solution for businesses that want to hire globally.

However, this shift to contingent labor could be bad news for knowledge workers. They could find themselves squeezed with fewer benefits, intermittent work, and fewer stock options. The truth is, being a contractor isn't all bad, but traditional staffing firms (and Deel) are often poor employers. Contractors are not really part of a team, and their benefits and salaries impact the bottom line for shareholders in these companies. Ultimately, the onus of staying employed falls on the worker.

The market is moving towards a dynamic team, with a small contingent of highly valuable persistent employees and an army of contractors that employers can dial up and down. This will shake out in two ways: Most knowledge workers will either be employed by a few large contingent employers that are driven by delivering shareholder value, or they will be organized into worker-owned staffing coops driven by delivering value to coop-members (workers).

Deel is tapped into all of these changes and will be a big winner in the move towards more contingent labor. They, along with other traditional staffing firms that leverage new tools, will play a significant role in shaping the future of work. However, it remains to be seen if this shift towards a more dynamic team will be good or bad for knowledge workers. The future of work is here, and we must adapt to it.

Trent Krupp

Founded Threaded: The personal rolodex built from your existing data. Previously, Head of Product at Impact, a market network serving the entertainment industry as well as Head of Revenue at Triplebyte and Hired. Founded an agency in my 20's, sold it to Hired and became employee 5. Recruited for VCs, growth and public companies. Helped the founders of recruitment tech startups, Trusted Health, Terminal and Beacon in the early days.