The Utmost approach to the extended workforce

Profile picture for user gonzodaddy By Den Howlett October 8, 2019
Summary:
Utmost wants to change the way in which the extended or contingent workforce is managed. Here's how they plan on attacking a problem that's seen little innovation in 30 years.

work hard

It's rare for me to talk about a startup in the enterprise space. Too many of them (at least in my mind) are either built to flip or doomed to fail. But I'm making an exception for Utmost; a firm cofounded by Annrai O'Toole, former CTO EMEA at Workday and before, co-founder of CapeClear, an ESB vendor acquired by Workday in 2008. 

The contingent labor problem

Whether you're talking about the gig economy or those operating under self-employed (1099 v W-2) status, it's impossible to ignore the contingent labor force or, as Utmost prefers - the extended workforce.

For many businesses and especially those that are services-based or have significant seasonal needs, contingent labor is an increasingly important part of the overall labor landscape. To put this into perspective, it is estimated that contingent employment accounts for $2.6t globally. In the US, it is estimated that 35% of workers fall into the contingent/extended category, with growth up to 50% by 2027. Whether you agree with such predictions or not matters less than understanding the scale of this element of the total workforce. 

The benefits of using a contingent labor force are often couched in terms of flexibility, e.g., hire and fire at will, fixed-term agreements, better cost/value control, etc. However, technology and contingent labor management practices have not advanced in many a year. According to O'Toole:

The clue comes from the software category that underpins the management of this category. Contingent labor is treated as a procurement problem so what you see are legacy vendor management systems that treat labor as a unit of production that's focused on spend and not talent. HR professionals dislike these systems, workers detest them. It's an all around poor experience that has the side effect of addiing adminstrative cost compared to the cost of managing fully a employed labor force. It's a contract, invoicing approach with almost nothing else. 

The following graphic demonstrates the extent of the problem from the point of hiring through the ending of the relationship:

Upstand - contingent labor problem

There's a lot to consider here. The first problem businesses run into is the lack of visibility into the number of people comprised of this category. It follows that if you can't count, don't know who is working in this extended workforce, and then there is a high risk of audit failure. For example, it is usual to provide physical or logical access to the firm's assets. If the firm doesn't know its headcount, then it's hardly surprising when assets go missing. 

Going back to the graphic, Utmost says that it is developing a system of record for the extended enterprise but with the worker in mind. What does this mean? 

The extended workforce solution

Visibility is key here. Once the firm has visibility into the composition of the extended workforce and the detailed information it needs on each person, then it unlocks the ability to do many of the tasks that are not catered for in the traditional VMS. Utmost sees this as a two-sided system where, on the one side, there is a workforce hub, while on the other side, there is a worker as distinguished from employee app. This is best illustrated in the following manner:

utmost architecture

As can be seen, on the firm side, Utmost maintains all the data it needs, but it is the worker app that is equally interesting. Critically, the worker is in control of their data, giving and withdrawing permission to use their data as they move from place to place. This doesn't prevent the firm from maintaining the data it needs for regulatory purposes and for which permission has been granted. In this way, Utmost believes it solves for the privacy issues that accompany many extended workforce scenarios.

O'Toole is clear that the diagram above is representative of the buckets of application that will sit inside the overall framework rather than a statement of what Utmost delivers today. He is also clear that while finance is a big part of the conversation, Utmost focuses on the HR elements. 

We've got a working app for the enterprise that sucks in data from a variety of sources and the basic app for the worker. 

My take

It's early days, and O'Toole admits there is a lot to do, but then Utmost is an exciting concept and one that I've not seen before. On visibility alone, Utmost addresses a common problem that iis an artifact of the VMS world while at the same time solving the data ownership and provenance issues. With $11 million in seed funding that includes Greylock and Workday Ventures, it's not surprising to find that it runs on the Workday PaaS. Crucially, Utmost has its first customer and a string of design partners with which it is fleshing out functionality. 

I especially like that Utmost is endeavoring to solve for worker needs in tandem with those of the enterprise, but it isn't a slam dunk. Licensing will be tricky. Will it be a case of workers saying something like: I'm on the Utmost platform, and that's how you'll need to interact with me? Or will it be a case of the enterprise licensing Utmost and then hoping it can persuade the extended workforce to join the party through what I assume will be a (free or very low cost) mobile app? 

Utmost is one to watch.