In the HR/recruitment world, there’s nearly no competition with LinkedIn. The internet giant is home to over 500 million users in 200 countries, and is the number one place for most HR professionals when they start looking for someone to fill a position. But one small company likes to think that the bigger they are, the harder they fall. Kalo started life as Lystable, the brain child of former Google designer and entrepreneur Pete Johnston.
The company is designed to allow enterprise and small business level customers to manage their freelance/contract employees in a smooth and user friendly way. The company is betting that the coming economic changes created by virtual computing and individual autonomy will produce a huge need for contract workers. The goal is to provide an easy systematic way for HR departments to manage these sometimes unmanageable freelancers. A recent report from McKinsey (the global consulting firm) indicates that the trend for freelance work is increasing, with a substantial 20-30% of workers already doing contract work.
The Kalo model is to charge a relatively low 3% of what customers are paying to freelancers they find through its system. The little startup is currently not allowing freelancers to sign up independently, but a firm who is using Kalo’s platform can add freelancers by providing them invitations.
The site is currently home to more than fifty thousand freelance employees. Johnston realized in 2014 that managing freelancers was like herding cats. It was possible to identify them, but after that there was little enterprise level software for managing them. Kalo was built around a system that allows for identification, management, and then billing for and paying freelancers with simple systems. The complexities of multiple systems being used to manage a large-scale contract operation can be streamlined into a very simple solution.
As with anything that simplifies life, the elegant software package has taken off, with PayPal founders’ investments and rapid growth at the enterprise level with companies like Airbnb and The Economist. And after Microsoft’s monumental purchase of LinkedIn last year (to the tune of $26 billion), Johnston thinks he’s scratching a real itch in the HR world.
The 50-person startup is looking like a much more robust and helpful solution to the needs of the coming gig economy than anything LinkedIn has tried to put in place. What’s more, The Kalo payment model allows freelancers, who generally don’t like to pay up front fees, to effectively be contacted and used without any charge to them. LinkedIn’s first attempts at freelancer solutions have come at relatively high ticket prices. Ostensibly, this is to drive out low-level contract workers, but Kalo’s invitation only system may do the same thing without angering the freelancers.
Whether Kalo is able to unseat LinkedIn in the contract world remains to be seen, but the reality of a growing contract economy should induce companies to start looking for solutions. Kalo and its competitors represent a genuine economic shift that will likely spell change for most companies.
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