How do large companies use online staffing platforms? A report released last month by the Oxford Internet Institute, part of the University of Oxford, explored online staffing’s use based on case studies of seven Fortune 500 firms in the US and two, large multinational enterprises, including Samsung.

The report is “Platform Sourcing: How Fortune 500 Firms Are Adopting Online Freelancing Platforms” by Greetje Corporaal and Vili Lehdonvirta from the Oxford Internet Institute.

Staffing Industry Analysts’ own research has found large companies are moving in the direction of online staffing. In one survey from last year, 12% of large firms reporting using online staffing and 5% planned to do so in the next two years — that’s up from 4% using and 10% considering in the previous year.

Turning to the Oxford study, it found three motivations for large firms’ use of online staffing:

  • Access to scalable sources of labor, skills and expertise.
  • Reduced startup and transaction costs compared to traditional contingent labor.
  • Fewer hiring barriers such as geography.

“But they were also seeking advantages in innovation and knowledge creation that come from making the corporate boundary more permeable and accessing workers outside their usual channels, with different backgrounds and work histories,” according to blog post on the report.

The report also listed challenges including the need to prevent increased coordination costs, overcome internal resistance, come up with solutions to address risk and creating “socio-technical infrastructures for platform organizing.”

Recommendations for firms included devising a strategy to decide what work is sourced online, putting in place a program to vet freelancers, creating a bench, creating a sense of community with the remote workers, not hiring to replace in-house employees and not blaming freelancers for poor work — instead looking at the process of working with freelancers.