Joseph Fuller: Welcome to the Managing the Future of Work podcast from the Harvard Business School. I'm Harvard Business School professor and visiting fellow at the American Enterprise Institute, Joe Fuller. This episode is one of the series of special dispatches on the sweeping effects of Covid-19 on our economy, society and the future of work. In addition to our regular podcast episodes, we will be bringing you shorter and more frequent interviews with business leaders, policy makers, and leading scholars on the coronavirus. While the coronavirus pandemic has slowed economic activity to a crawl, it appears to accelerated a number of trends in the evolution of work. High on that list is company's use of freelancers, contractors and other forms of contingent labor. Is this a temporary response to Covid-19 or does it indicate a continuing trend? Taso Du Val, CEO of gig platform Toptal, joins me to discuss the pandemic's impact on the market for freelance labor in such categories as artificial intelligence, software engineering, finance, and project management. Taso, the gig platform for sourcing talent is getting increasingly familiar to people. Can you tell us a little bit about Toptal specifically and how you differentiate yourself?

Taso Du Val: Sure. Well, first we differentiate ourselves from a gig platform in the sense that we really consider ourselves a talent platform. A talent platform differentiates in the sense that talent kind of [connotes] long-term, high-skilled work, whereas gig is generally short-term, low-skilled work.

Fuller: Task-oriented.

Du Val: A very important point of distinction there. And in regards to Toptal, how we differentiate ourselves with the different talent platforms that exist out there, we primarily serve Fortune 500s and fast-growing startups that really need the highest quality talent, and that's our focus.

Fuller: The Covid crisis obviously had this completely unprecedented effect on the economy with not only dampening or eliminating demand for whole swaths of the economy, but actually accelerating demand for certain types of talent and whatnot. How is it affecting your clients and what are you seeing in terms of their needs, what they're seeking?

Du Val: Well, we've seen an effect at Toptal that is real, but not as, let's say, drastic as in other industries. And so at Toptal we have many clients that are in the hospitality, travel, airline industry and so we've seen some effect in regards to our business. Now in regard to our business as a whole, it's been minimal. However, it has had some impact.

Fuller: Has the mix shifted at all, in terms of what people are looking for?

Du Val: In terms of what people are looking for, not so much. However, I will say that the clients that have remained with us, which are by far the majority of our clientele, are hiring at a similar pace. Which indicates that people who are embracing remote work already, this wasn't as disruptive for them as companies that weren't.

Fuller: Are there particular sectors that are popping out at you as having outsized demand or are surprises at all to you in terms of your demand?

Du Val: Well, we haven't looked at it in terms of a skillset slice, looking at different skills and seeing if they've increased or flattened or decreased as a result of this crisis. However, I will say that from a high-level perspective, the demand from our current clients has remained quite strong.

Fuller: How do you see that on the supply side? Are more people inquiring about opportunities? Are you getting bounce backs from people who used to work with you, but went dark on you and now are available?

Du Val: That's a great question. There, the increase in applications has been drastic. We've seen a huge uptick in terms of people applying both to our company internally, being one of the largest fully distributed companies in the world, and our talent network, to be able to work with clients. And so we've definitely seen a pretty sharp shift in people applying to our jobs both internally and for our platform.

Fuller: Any insight or hypotheses as to where that talent is coming from? Is it people that are in the startup community that suddenly they're unemployed? Is it people who have more time now because they're isolated and their social life is dead and their business travel’s dead? See any change in that geographic mix of where talents coming from?

Du Val: Sure. Let's take a step back and analyze the situation. You have many great technology companies and many great companies globally that have a composition of talent that is the precise type of talent that Toptal needs and many other great companies need.

Du Val: You can use an Uber for example. While Uber isn't going to shut down anytime soon, they are having to pivot their business and think about how they're going to survive through this crisis. If you use that as an example, as a reference point, think about how many other companies that exist out there that are just as good as Uber but much smaller and can't withstand the pressure of this current crisis. There's a lot of them.

Du Val: And, so there are a lot of companies that are small that still have really great talent, very highly skilled individuals are having to depart because those businesses can't withstand this crisis. And so if you take an aggregate of the world talent supply and all the companies that are associated with companies of that nature, those dynamics, there's a lot of talent that is now available. And Toptal's reaping some of the benefits of that by having those talented folks apply through our platform.

Fuller: One thing we've seen in some other industries with much less sophisticated or skilled talent than you're offering is actually that the companies are effectively wholesaling their preexisting capacity to third parties. An illustration is that— great story—which is that in New York state, a lot of the unemployment insurance claims are being processed by a Marriott call center, because Marriott had distributed call reps, highly trained, knew what they were doing, technology was installed, they knew how to train them up on new offers fast. And New York was able to scale because Marriott literally got a call and said, "We'll make these people available to you."

Fuller: Are you seeing anybody wholesale groups of talent companies or departments in companies? Where I think about Uber, I can imagine they have a bunch of talent that's really underemployed.

Du Val: Funny you mentioned this and it's almost an unbelievable coincidence that you mentioned this. Marriott actually contacted us and asked us to con[tract]-

Fuller: Oh wow.

Du Val: ... a whole bunch of their software engineers to companies and we are in the process of making that a reality.

Fuller: Oh, how great.

Du Val: I've seen a lot of companies, especially from folks who I know personally, come to us and say, "We have really talented product managers, software developers, etcetera, etcetera. We need to retain them. However, we also need to pay their bills." And so they've come to Toptal to say, "Can you contract these folks out for a period of time?"

Du Val: I can name a couple of startups just off the top of my head where I know the CEOs of these companies and they've asked me directly to do so. I do know it's happening across the world and this is something that I've seen tech CEOs request.

Fuller: But it's a range of companies, from startups with elite, available talent all the way up to some multinationals that are doing this?

Du Val: Absolutely.

Fuller: Wow.

Du Val: We've seen it with both technology companies and Fortune 500s.

Fuller: Well, certainly some of our research at Harvard Business School indicates that both prevalence of and the level of reliance on external talent of the type that Toptal offers in the highest echelons, but really across the skills stack, if you want to say it, is actually a larger phenomenon than a lot of people think. I'm curious how you think all of this is going to affect your business model and the engagement of high skilled talent like that’s available on Toptal. You're an entrepreneur. You created a very successful business, so you have some insight into how market opportunities unfold. What are your instincts about what's going to happen in the market for talent and how demand is going to be shaped by everything we've witnessed?

Du Val: Well, you're definitely going to see companies adapting to a remote workforce and embracing a remote workforce in the future. There's no question about that, and for our business, that's a good thing. We've had a lot of challenges over the last decade convincing big companies, small companies, companies of all sizes that remote talent works and that creating a robust remote work environment is possible. Even to the extent that it could be more efficient, more effective, than an in-office working environment.

Du Val: Now we don't have to convince people of that anymore. And if we do, they're going to be antiquated companies that had a really difficult time through this transition, that had such dilapidated infrastructure. Either we as an organization or others are going to help them transition their infrastructure to make it on par with the other companies that are having a pretty seamless experience through this.

Du Val: The interesting thing is, is that, especially with the companies that we work with today at scale already, those companies are having fine experiences transitioning through this process, even the ones that are doing it quite quickly. There are other companies, however, of a similar size and same sector that are having a terrible experience and the reason is, is because they haven't gotten their processes or technology up to the standards of those other companies. You have folks who are still using dial-up conference calls. You have folks who still communicate primarily through email. Folks who really don't have robust infrastructure that ties it all together so that the integrations allow your calendar and your Slack and all the elements to come together so that it's very fluid and connected.

Du Val: Those companies have to get it up to speed with the companies that are thriving in this. You might even have it to such a degree where the companies that are struggling are actually going to fall behind as market leaders and the companies that have robust infrastructure are going to pull ahead. I do actually think that the impact is so pronounced in this crisis that that has the potential to transpire.

Fuller: When you think about it from the supply side, I mean Toptal deals in people with very, very high-level, demonstrated technical skills, academic attainment, very often people that companies come to you because they find it hard to get people that accept full-time job offers they have available for whatever reason, location, attitudes of workers. How do you think this is all going to affect that... don't mean to be silly about it, but that “Toptal strata” about their expectations, about what types of work they want to do, where they want to do it, how they feel about social interaction?

Du Val: Well, from the talent's perspective, it hasn't changed much except for the demand in some cases. Whereas some of our engagements as mentioned earlier in the conversation, had to go away because they were working with travel clients or they were working with clients in the hospital industry. They've had to refocus their efforts to other clients or other engagements. However, I would say as a broad notion, the remote work environment, especially for highly skilled labor, such as the ones at Toptal, has not changed so much from a dynamics perspective.

Fuller: Are there specific barriers that you think are going to have to be removed in the way companies go about business that would allow them to more effectively source your type of platform? What are two or three things? You mentioned a couple, antiquated technology and whatnot, but if you put aside the types of things people can solve just by writing a check. “Okay I'm going to get more bandwidth, I'm going to buy this type of platform, I'm going to do this in the cloud.” What are the things that really have to change so they can get the most value out an offer like yours?

Du Val: This is a great question and I'm going to give you a rather unexpected answer.

Fuller: Okay.

Du Val: I gave a talk. I was on a panel, Thomson Reuters panel, during the World Economic Forum this year, and I was asked almost the exact same question. And the answer is mindset. You have to change the mindset of the executive and senior leadership team to convince and portray that remote work is possible. And by embracing remote work and flexibility, you strengthen your organization rather than hinder your organization.

Du Val: Now, this becomes increasingly important for the following reasons. If you have a whole bunch of organizations in a sector that are embracing flexibility and remote work versus ones that are not, you're easily going to have better talent at the ones that are embracing flexibility in remote work. And so, as a proxy from that, you can derive that companies that are not embracing those are going to be harmed, in effect. And so they will be forced to change their models, change their infrastructure, change their mindset to be able to embrace flexibility and remote work.

Du Val: And so it's no longer a convenience factor. It's a factor of who's going to win in business. And this is a very, very serious retention tool and talent acquisition tool when it comes to companies at large. It can no longer be thought of as this, "Oh, it's nice to work from home" idea. It needs to be thought of as we're literally winning because we embrace flexibility and remote work.

Fuller: When you think about a senior executive that's skeptical about this, is their skepticism and their reserve about adopting this type of model—is it because they're kind of ignorant at what you can do or is it because they feel they have to have strategic control of top talent, so they want to employ those people and they don't want to rely on third party? Are they worried about IP? What are they inhibitors that cause presumably otherwise perfectly logical and effective business executive to make the type of misjudgment you're describing?

Du Val: Well, everything that you just said I would have said held true before the crisis. Now, especially with executives working within companies that have good infrastructure, those executives and senior leaders have almost been forced to go through this experience, and a lot of them have said, "Wow, this is actually working for me."

Du Val: In fact, today, literally, an executive who got recruited to a Fortune 20 company that we were going to hire as an executive at Toptal texted me and said, "Actually, Taso, I'm going to take your position, because originally I didn't think this was going to work. I've now decided to not take the position at the Fortune 20 and I'm going to take the job at Toptal because I was forced to work and it actually worked far better than my expectation."

Fuller: Wow.

Du Val: We know firsthand... And that was a great call to get by the way-

Fuller: Yeah, I bet.

Du Val: ... from a very senior leader who's going to be leading, let's say, a division at Toptal. I was very pleased to receive that phone call. But at the same time, that text message corroborates the fact that people who were skeptical were forced to go through this experience and come out on the other side saying, "Wow, that actually worked a lot better than I anticipated."

Fuller: Well, Taso, that lets us end on a high point. It's clear that major institutions, companies, governments are going to have to fundamentally rethink everything from how they're going to address the many requirements that are unleashed by this pandemic to how they're going to structure work in the future to reflect anxieties about transmission chains and how slowly, particularly companies that have very large kind of dense-pack headquarters are going to be able to spool up their onsite work. It's going to unleash a lot of innovation and we hope a lot of improvements in people's quality of work life and the productivity of companies as a consequence.

Fuller: Thanks for joining us on this Covid Dispatch from the Managing the Future of Work Podcast, and we'll hope to welcome you live to the Harvard Business School at some point in the future, Taso.

Du Val: Well, thank you very much, Joe. I really appreciate it.

Fuller: Thanks for listening to this Covid-19 Dispatch from the Managing the Future of Work Podcast at Harvard Business School. If you’re interested in Taso's insights about effective remote work and would like to learn more, Toptal has compiled a comprehensive playbook summarizing best practices for managing remote projects. You can read it at toptal.com/playbook.