Shifting for the Gig Economy

Digital on-demand staffing platforms are connecting hourly workers with new opportunities, as the gig economy continues to disrupt the future of work.
By: | September 19, 2018 • 6 min read

Uber and Lyft have become synonymous with the gig economy, but ridesharing is far from the only industry ripe with opportunities for on-demand work. From shelf stockers to restaurant workers to sales representatives, hourly workers are taking advantage of new platforms that give them the ability to control when, where and for whom they work—all with just the touch of a button.

One such platform, SnagWork, grew out of Snagajob (now called Snag), an online jobs marketplace founded primarily for restaurant and retail workers. With a $100-million investment two years ago, the company launched an Innovation Lab to explore new opportunities for improving the hourly-hiring market.

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Jason Hamilton, co-founder and general manager of SnagWork, says the research uncovered that, even though the labor market was tightening and it was easier for hourly workers to find employment, many were craving more flexibility in scheduling—which wasn’t being offered by the largely automated scheduling systems. That flexibility, he adds, was often needed for workers to take on additional positions if they weren’t getting enough hours at their primary job.

“Policy changes like the Affordable Care Act and changes to minimum wage were causing some small businesses to reduce hours for workers,” Hamilton says. And with a pool of candidates often juggling several jobs, the HR leaders the company talked to, he adds, were dealing with an uptick in no-shows for job interviews. “It was less of a matter that workers fundamentally changed, but just that they were coordinating a lot of different things, so whatever job got back to them first, they responded to.”

Enter on-demand shift staffing. Like the popular ride-share services, a number of digital platforms have cropped up in recent years that connect workers looking for shifts with companies that have immediate openings for a one-off gig.

Ravin Jesuthasan, managing director and global practice leader at Willis Towers Watson, estimates there are currently about 500 on-demand staffing platforms operating nationwide—for everyone from retail workers to software developers to attorneys.

“It’s a unique win-win that solves a lot of inefficiencies,” Jesuthasan says.

For hourly workers especially, he says, the on-demand approach allows them to expand their options, while companies can expand their talent pool—and both can lessen the time and money spent on job searches. While many on-demand apps got their start working with small businesses, experts forecast that larger corporations will increasingly also get on board with the idea of digital on-demand hiring, as freelance workers become an integral part of their workforce. The model prioritizes the flexibility that is coming to define the future workplace, but embracing such an approach to hiring isn’t quite as easy as the touch of a button: Experts say companies considering this shift need to clearly define the roles for which this type of hiring is appropriate, ensure candidates are properly vetted and put in place training to prepare their employees to work well alongside gig workers.

The Digital Demand

Several decades ago, workers aimed to land a job at a large company, with good benefits, and stay there as long as possible, says Wade Burgess, CEO of ShiftGig. Fast-forward to the last 10 years, and it has become common for workers to put in “shorter tours of duty,” often less than a decade at each employer—a time frame that has been up-ended in the past few years.

“In today’s world, people literally want to choose by the day what they want to do,” Burgess says. “Workers want—or, in some cases, require—more flexibility and agility.”

ShiftGig aims to provide that with its on-demand hiring platform, which Burgess says lets workers “control how they work, when they work and where they work—all in the palm of their hand.”

Like SnagWork, ShiftGig also traces its roots to a virtual job board for the service industry, founded in 2011. Three years later—as the gig economy exploded—it pivoted its model to become a two-way marketplace, connecting businesses and shift workers in real time. It now operates in 15 markets, with 47,000 workers—whom it calls specialists—who have picked up an average of 13,000 shifts per month, and worked more than 670,000 shifts since the venture’s inception. ShiftGig has more than 2,900 business clients and has staffed businesses of all sizes, including Nike and the Olympics.

SnagWork, originally called Husl, launched in Richmond, Va., in early 2017 and has worked with about 100 business clients since, expanding to Washington this year. Most are small businesses, primarily in the restaurant industry, but SnagWork also counts among its clients larger companies such as Five Guys and Delta Hotels by Marriott.

The roles businesses are looking to fill through SnagWork vary but typically involve “any task that you don’t need a lot of training for to be able to go in and do a good job,” Hamilton says. Most require workers to be self-motivated, customer-service-oriented, hardworking and proactive.

Initially, businesses were tapping workers for “crisis moments”—such as if an employee called out or didn’t show up for work—but, “once they saw the quality of the workers they were getting through SnagWork,” Hamilton says, more started utilizing the platform to fill regular gaps in their schedule.

There has been a similar evolution at Wonolo. Founded in 2014 as the “Lyft of merchandising,” according to co-founder and COO AJ Brustein, the platform has connected shift workers to gigs in everything from distribution to fulfillment, largely in retail, e-commerce and manufacturing settings. The company first gained traction with smaller and mid-sized companies but has started signing on larger enterprises, such as Papa John’s, McDonald’s, Neutrogena and JCPenney.

“For so long, companies have had all the power and that’s why there’s been no flexibility, but now workers are getting more power in choosing when, where and for whom they want to work,” Brustein says. “Companies are becoming more comfortable in understanding that, if you don’t allow that, you’ll lose good people.”

The historically low unemployment rate, and high competition for talent, are going to continue that evolution, says Scott Staples, CEO of First Advantage, a provider of background-screening solutions.

“I think this is just the tip of the iceberg,” Staples says about the growth of on-demand hiring platforms. “I really feel these and other platforms that have yet to launch are really going to start moving upstream into more white-collar jobs over the next couple of years. That’s just the way it has to go; the writing is on the wall.”

A Matching Game

A recent report by Intuit estimated that 34 percent of American workers have gig jobs—a number it anticipates will grow to 43 percent in the next two years.

That dwarfs the official numbers from the Bureau of Labor Statistics, which found that about 10.1 percent of the American workforce considers themselves “alternative workers”—including contractors, on-call workers and those working as temps—down from 10.7 percent in 2005, the last time the agency researched the issue. However, significantly missing from this research is the number of workers who pick up side jobs; instead, the report focuses just on the pool of people who rely on freelance work as their primary income. The BLS survey included a handful of questions about online-generated gig work, with results expected to be announced this fall.

Wonolo’s 100,000-plus workers nationwide typically fit into three categories: unemployed (the smallest group), those who primarily want flexible work (a large, but often unpredictable, proportion) and those who are underemployed. “These are the people working a permanent job but who need more hours and struggle to do that without the flexibility Wonolo provides,” Brustein says. “It can be a lifesaver.”

While on-demand staffing can solve problems for workers, making sure a company’s interests are met is another piece of the puzzle.

At SnagWork, a job requester pays a service fee to the company and inputs details of the position it needs filled, which SnagWork sends out to a pool of available, qualified candidates (or it can limit the request solely to those with whom the business has worked in the past). Hamilton says that approach—wherein the company is not personally hand-selecting workers—helps reduce hiring bias.

About 70 percent of shifts are claimed in just a few minutes, and 90 percent of the shifts are successfully completed. Shift managers and workers are asked to rate one another at the end of a shift—Snaggers have an average approval rate of 98 percent, while businesses garner an average approval of 97 percent—and, should any issues arise, Hamilton says, SnagWork intervenes to problem-solve.

Wonolo also has a two-way ratings system and an average time-to-fill of four minutes. Businesses are matched with candidates according to a range of factors, such as availability, if the person has specific skills, has worked for that business previously and distance from the job. Workers can also earn performance badges.

“The company wants the worker to be successful and the worker wants to get a good rating to access more jobs, so I think they go out of their way to make sure each other has a good experience,” Brustein says.

ShiftGig’s reciprocal ratings, Burgess adds, are key to helping both workers and companies build a reputational history. “The financial industry started solving this issue a long time ago with credit scores: Everything you did lends toward your credit-worthiness in a common language. That’ll be important here.”

Shifting the Landscape

The motivation to make on-demand staffing successful is definitely there, says Stephanie Penner, senior partner and career business leader for Mercer’s East market. In the company’s recent Global Talent Trends study, it found that 79 percent of workers are open to contract work—including as a full-time venture or in addition to permanent employment. Meanwhile, two out of five organizations are planning to “borrow” more talent in the coming year.

Before using on-demand platforms to do so, Penner says, HR professionals should familiarize themselves with the tech involved, consider how worker engagement could be impacted and implement training for managers overseeing full-time and gig workers.

Background screening is another important consideration.

At SnagWork, all candidates have to advance through a behavioral-based interview and background check before being approved for work. Wonolo doesn’t require candidates to submit a resume or participate in an interview, though a background check is the final step of the vetting process; some companies on the platform, Brustein adds, require a drug test.

ShiftGig’s Burgess says that most of the company’s clients just require that candidates are legally allowed to work in the United States, though workers may need to submit to extra screening if they primarily work in more-regulated industries.

First Advantage’s Staples says businesses looking to on-demand hiring need to be conscious of how deep of a background check they need on their gig workers.

“If a company is looking to protect their brand and go for the absolute lowest risk possible, there’s no way a background screening can be done in a couple hours; they’ll need something more thorough,” he says. “But if you’re looking for some sort of moderate risk, then yes, it’s possible.”

Staples says his company has had to update its models to ensure it can deliver services at the speed that on-demand hiring apps need.

“We’ve changed our processes to make sure we’re doing everything as fast as possible,” he says. “The gig economy is all about speed but it’s also all about technology, so we’ve looked at how do we integrate with platforms, with other tech, and how do we provide a better candidate experience via mobile apps or whatever it may be.”

The mobile experience is the crux of InfoMart’s digital background-screening solution ASAP ID, which launched in 2016. The app allows job candidates to kick off a screening process with a scan of their government-issued identification and a selfie, which is analyzed for facial recognition, and starts generating results in just one minute.

“Especially in the gig economy, people want a quick, seamless experience,” says Tammy Cohen, founder and chief visionary officer at InfoMart. She notes that her company has seen an uptick in clients hiring gig workers, especially in business contracting, food services and communications.

InfoMart CEO Marco Piovesan says that, among both current clients adopting gig hiring as well as new gig prospects, trust is key to a successful screening process, especially in light of the quick turnaround most require.

“Trust is part of our business model, which dictates that we produce good results, accurate results, speed and continuous modeling,” he says. The company’s “self-sovereignty” model—which gives job seekers control over the process and the data—also goes hand in hand with the gig economy’s pivot toward empowering workers, Piovesan adds.

Apart from the tools to enable gig work, another priority HR leaders raised in the Global Talent Trends study is the need to reimagine the workforce—and jobs themselves—to allow for integration of different kinds of workers.

“There is a mosaic of talent now developing at organizations,” Mercer’s Penner says. “It’s the critical core in the middle and then that’s supported by this elastic workforce that includes freelancers and contractors working on demand. So the question now is how to redesign jobs to better enable the mixture of this talent. The concept of gig work is here to stay.”

With on-demand gigs moving in, does that mean temporary staffing agencies are moving out? Not necessarily.

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There are some potential downsides to gig work—the tax implications of being a 1099 professional or the fear of unstable income, for example—that staffing companies can mitigate, Penner says. “By being a pure gig-economy player, you have to be really good at marketing yourself on these digital platforms,” she adds, “and not everyone is good at that.”

While there is a place for traditional staffing agencies, they need to transform their business models, she says, a process that should focus on determining their unique value proposition—and aligning it with what future workers will want: flexibility.

Burgess says he envisions that evolution to continue across the hiring market, which he predicts will become even more fluid in the next three to five years—with apps like ShiftGig serving as an important connector.

“We imagine a world where thousands of sources of work, of workers and employers of record all flow freely to where the labor needs are,” he says.

Jesuthasan agrees: “I really think these types of platforms are going to continue to transform how talent is sourced, and how work is done in the future.”