Online labor platforms versus temp agencies: what are the differences?

Abstract

PurposeThe purpose of this paper is to compare online labor platforms (OLPs) such as Upwork, Fiverr, YoungOnes and Temper with traditional temp agencies. At a first glance, OLPs and temp agencies strongly resemble each other while they aim to meet the need for short-term labor of organizations. The authors ask the question how these labor market intermediaries differ on issues such as information technology usage, ways how labor supply and demand are matched and working conditions (e.g. status, pay and social security of workers).Design/methodology/approachNext to a review of the academic literature, the authors conducted interviews with representatives of six OLPs and temp agencies in the Netherlands as well as a legal specialist in Dutch labor law.FindingsThe authors found that OLPs and temp agencies differ on several issues. First, although OLPs rely on online marketplaces for matching labor supply and demand, temp agencies generally rely on human matchmakers. Second, although OLPs enable workers and client organizations to initiate transactions themselves, temp agencies employ representatives that do the matching for workers and clients. Third, and as a result, OLPs afford client organizations to almost instantly hire workers on-demand, whereas the flexibility and speed that temp agencies can offer depend on availability and processing capacity of human matchmakers.Originality/valueAccording to the authors’ knowledge, this paper is the first to compare OLPs and temp agencies and, in doing so, offers academics and practitioners an analytical framework to compare different types of labor market intermediaries.