Think Outside the Box: Innovation for the Mid-Market
While middle market firms comprise only 1% of the total number of commercially active firms, they have led national job growth over the past few years, employing approximately 53 million workers and contributing $9.3 trillion to the U.S. economy. There are nearly 200,000 U.S. middle market businesses that represent one-third of private sector GDP, employing approximately 47.9 million people. These companies are private and public, family owned, and sold proprietorships, geometrically diverse, and span across almost all industries.
The Definition of Middle Market
The U.S. middle market is defined by the National Center for the Middle Market as those businesses with an annual revenue ranging from $10 million to $1 billion, and is divided into three tiers based on the revenue range:
Lower Middle Market: $10 million to $50 million
Core Middle Market: $50 million to $100 million
Upper Middle Market: $100 million to $1 billion
Middle Market Performance in Q1-2017
According to the National Center for the Middle Market, revenue in the middle market in Q1-2017 grew 9.2% over the past 12 months, and is expected to grow at 8.8% over the next 12 months. Just under 60% of middle market companies project positive revenue growth.
Over the past year, middle market hiring grew by 7.5% and is expected to grow by 6% over the next 12 months. And 64% of middle market companies say they plan to consistently invest capital to add jobs, equipment, make acquisitions or train employees.
Middle Market Growth by Industry
Source: The National Center for the Middle Market
Innovative Technology Solutions for the Mid-Market
As the data for Q1-2017 shows, mid-market companies have consistent revenues that correlate with them increasing hiring spend and activity. While these companies are increasingly relying upon non-employee talent to drive business growth, the technology (such as vendor management systems) that are typically used to mitigate the complexities of managing and engaging non-employees are often unaffordable or require long and convoluted implementations.
Access to the necessary technology is often a complicated challenge for mid-market firms. Understanding the complex ecosystem of enterprise software, containing costs for new solutions and lacking the resources needed such as IT support has often limited the availability of a vendor management system (VMS) for these companies.
However in the past year, VMS providers have set their sights and put their innovation laboratories to work to provide mid-market firms with a product that gives them an affordable, strong, robust, and scalable solution to manage and engage their extended workforces. According to Elizabeth Rennie, global workforce solutions director for Staffing Industry Analysts (SIA), “Traditionally, external workforce solutions have focused on organizations of more than 10,000 employees representing approximately 63% of the total VMS market size according to Staffing Industry Analysts. However, as contingent workforces grow in size and risk management strategies are applied, mid-market organizations are expected to increasingly look to VMS and MSP solutions.”