How to Grow and Optimize Your On-Demand Workforce in the New Flexible Work Economy

Aakash Kumar
Founder & CEO
July 6, 2021

The labor market has fundamentally changed, making it more challenging for employers to accurately predict their labor needs and then hire and scale a high-quality workforce. While COVID-19 has accelerated this trend, this is a market shift that was years in the making. Whether you’re in the retail, hospitality, manufacturing or service industry, the difficulty of growing an on-demand labor force at scale will only grow overtime. But fear not: we’re here to tell you it can be done (and how we can help).

More than ever, what employers need is a more cost-efficient way to find and retain workers and for independent, on-demand workers to find jobs that meet their lifestyle needs. For too long, the on-demand labor market has been focused on rapid job placement and short-term incentives rather than cultivating a holistic, mutually beneficial work ecosystem.

At Shiftsmart, our mission has been to help spark a much-needed change in the labor market. Today, more and more companies are embracing a new worker-centric mindset and creating scalable on-demand workforces that meet their business needs.  Over the last year, we’ve grown our platform of highly-skilled workers from 90,000 to over 400,000 and counting. We’ve been able to help hundreds of companies in over 50 countries quickly onboard, staff and train the workers they need. Most importantly, when the pandemic hit, we were able to help some of the hardest hit communities and industries, filling over one million shifts through our Get Shift Done initiative.

In this blog, we’re going to share some of the challenges and best practices for growing your on-demand workforce. We’re going to look at the trends driving the labor market and highlight key areas where employers should focus in order to attract and retain the right talent. Finally, we’ll share the Shiftsmart approach to helping companies build resilient Enterprise Labor Networks that meet their needs.

Welcome to the New On-Demand Workforce

Right now, across almost every industry, businesses are struggling to find workers despite record unemployment rates and job openings. Part of this has been brought on by the pandemic; however structural changes to the labor market have and will continue to have lasting impacts on the future of work:

The net result of these changes is a “workers market” – a market in which workers have more optionality and flexibility to find work than ever before. The “Gig Economy'' might have sparked this trend, by creating instant access to millions of part-time, flexible jobs; but there is more than meets the eye here. What we’re seeing is a fundamental change in the nature of work, where workers can choose employers and jobs that suit a more flexible lifestyle. Even as the effects of COVID-19 start to fade, many experts believe the rise of flexible work will become a permanent trend.

What does that mean for employers? For one, the market will only get more competitive. If you’re hiring hourly workers, you’re not just competing with your industry peers but essentially any business that offers part-time work. As a result, you can expect to see higher turnover, increased hiring costs and potentially more variance in worker quality.

1 in 4 workers said they’re considering quitting their job by year-end
70% of low-income workers expect to leave their current job in the next year

We’re seeing a dramatic response to this trend, with large enterprises and category-leaders using greater incentives to recruit and retain workers:

While these are creative solutions, they’re simply not economical or feasible for most businesses. More than that, these solutions don’t address the root of the problem: a growing number of workers who simply don’t want the inflexibility of a full or even part-time job. Instead, they want the ability to conveniently stack work across multiple employers. At Shiftsmart, we call these workers micro-entrepreneurs and we believe that this category of the on-demand workforce will continue to grow.

Attracting and Retaining On-Demand Workers

Another challenge for employers: ensuring a steady pipeline of high-quality workers. We’ve established that the market is becoming increasingly competitive, and while that might tempt employers to lean more heavily on third-party staffing agencies, job boards and marketplaces, we see two unique problems in this approach.

First, outsourcing your recruitment tactics can be costly and not always efficient. Because the market is so focused on rapid placement, there’s less incentive to focus on quality over quantity. As the employer, you have limited transparency into a worker’s experience and skills and when the job is done that worker will likely be sent back to the agency. Essentially, your relationship with that worker is transactional, which may be useful in the short-term but over time becomes difficult to scale.

At the same time, worker expectations have been completely reset by the Gig Economy. Convenient access to work is important; but on-demand workers also want more flexible scheduling, more immediate payments, and the ability to choose who they work for. None of that is truly available to them in the current labor marketplace.

Another, often overlooked piece of the puzzle is career advancement opportunities. We see this as a huge gap in the current on-demand labor market. Countless surveys and studies have shown that gig and part-time workers want the same incentives and advancement opportunities as full-time workers. They want to be able to gradually increase their hourly rate, level-up their skills and be able to showcase their experience to the market. (As an employer, wouldn’t you love it if you could see the full qualifications and work experience of every qualified hourly worker before you hire them?)

We believe the best path forward is a truly transparent ecosystem that aligns the incentives of both employers and workers. We call this the “Shiftsmart Approach”:

The Shiftsmart Approach:

Start Building Your Enterprise Labor Network

While all of this might sound scary and complex, in reality it’s just a path to building a more sustainable and scalable labor force. Demand for part-time work isn’t going away, and neither are workers expectations around a more transparent and worker-centric labor market.

If the last year has taught us anything, it is that creating a more resilient labor force is more important than ever. Whether you choose to build your own Enterprise Labor Network or leverage ours, we believe this new model of on-demand work will bring success and scale to both employers and workers.

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