When Elance CEO Fabio Rosati first arrived at Staffing Industry Analysts’ Executive Forum last week, one of the staffers on hand spotted his badge and approached him. “So, you’re with Elance,” he said. “You’re the enemy.”

Fabio shared this at the beginning of his breakout session speech, and while it served as a humorous anecdote to warm up the 900+ audience, it certainly didn’t break the tension. I'd imagine most of the staffing bigwigs came out of that session thinking online staffing is as big and threatening as Affordable Care Act. For others, it's just a passing trend.

While the gut reaction to sites like oDesk and Guru may be to brush them off as just another fad, I think doing so would be a mistake. Elance alone has 500,000 clients, a million new jobs posted annually, a 50% fill rate with an average fill time of three days, 2 million candidates, $700 million in billings to date, and is expected to do $300 million this year. Online staffing as a whole is a $1 billion industry as it stands right now, and with a rapid growth rate of between 30% and 40%, SIA President Barry Asin predicts it will be a $5 billion market within five years.

Online staffing is already huge, and should very much be considered a competitor. But instead of trying to fight that competitor (an unwinnable uphill battle), you should take the time to understand that competitor.

You need to prepare. Soon you might have to answer to your clients as to why they should stick with you over these online platforms’ millions-strong candidate pools. You may also need to evolve. Maybe all the action you need is as simple as stepping up your sales approach or furthering what makes you unique.

Personally I liked the reaction of Kathy Hartung, CEO and president of Temporary Resources Inc. She went to two different sessions on online staffing at the conference, and afterwards we chatted briefly. Her brain was already swimming with ideas of how they could adapt – what aspects of the model they could adopt, how to beat them at their own game, how their software provider could partner with them, etc.

I forget who said it originally, but I’ll butcheringly paraphrase: “if you see an angry mob coming towards you, get in front and call it a parade.” The idea being that you should be in front of all the changes and advancements of your industry. And should you decide to take part in those changes, sell them as a positive.

Don’t think that these online staffing companies aren’t already thinking about how you’re going to adapt and beat them, because they are. And if they aren't scared, they should be ...

“Wouldn’t it be great if staffers could come to Elance and get our talent while paying the markups or a flat finders fee? We’re not there yet, but one day we hope to be,” Rosati said. “… I would love to build partnerships with staffers to use our technology for our mutual benefit. I know our model is disruptive to you, but I think there’s also opportunity for both of us. I also expect in the next five years that all the major players in the industry will try to do this on their own. It’s inevitable.”

Tags: Executive Forum, Elance, Industry, Barry Asin, Staffing Industry Analysts, Fabio Rosati, Guru, Kathy Hartung, ODesk, Online staffing, Temporary Resources Inc.