A Guide for Staffing Company Owners to Compete with the Gig Economy
Understanding the Gig Economy
The gig economy is a labor market characterized by temporary, contract, and freelance jobs. It relies heavily on independent contractors and freelancers who work on a project-by-project basis. This type of economy has become increasingly popular in recent years, with more and more people turning to gig work as a way to earn a living. Independent contractors enjoy the flexibility and autonomy that gig work offers, allowing them to choose their projects and set their schedules. However, this also means they forgo traditional employment benefits like health insurance and job security. For staffing company owners, understanding the dynamics of the gig economy is crucial to staying competitive and meeting the evolving needs of both clients and workers.
What is the On-Demand Economy?
The rise of Uber, Lyft, Airbnb, Grubhub and similar companies is no mere fad—the so-called “on-demand economy” has made a lasting impact in several industries, and all signs indicate that it is here to stay.
But what is the on-demand economy, exactly? It is quite the buzzword in contemporary business news headlines. Known also as the “gig economy,” Business Insider defines it as “the economic activity created by technology companies that fulfill consumer demand via the immediate provisioning of goods and services.” The gig economy, essentially, was brought on by all of the jobs that people acquire and carry-out through a smart-phone app, like Uber, Lyft and the like. Workers in the on-demand economy, often referred to as independent workers, do not have an office space, are not formally employed on a full-time basis and do not get the benefits (health insurance, etc.) that traditional employment opportunities offer. However, on-demand jobs are flexible and are easily acquired, so Americans are flocking to them.
Accordingly, staffing company owners need to be aware of the growing prevalence of the on-demand economy. Here is a staffing company’s guide to surviving the gig economy.
Staffing Company Owner and the On-Demand Economy
Leadership in a Staffing Company
In a staffing company, leadership plays a crucial role in navigating the gig economy. A chief executive officer (CEO) or business owner must have a clear understanding of the company’s mission, vision, and values. They must also be able to develop and implement effective business strategies that take into account the unique challenges and opportunities of the gig economy.
Effective leadership in a staffing company involves being able to delegate responsibilities, manage day-to-day operations, and make strategic decisions that drive sustainable growth. A CEO or business owner must also be able to communicate effectively with independent contractors, clients, and other stakeholders. This means fostering an environment where independent contractors feel valued and supported, ensuring that clients receive top-notch service, and continuously adapting to market changes. By focusing on strategic planning and maintaining open lines of communication, staffing company leaders can position their entire company for long-term success in the gig economy.
Which Industries are Adopting Independent Contractors in the Gig Economy?
Statistics indicate that over one-third of U.S. workers undertake some sort of on-demand or free-lance work. Technology companies that have free-lance work/services apps have completely overtaken a couple industries within the economy. Check out the economic sectors most affected by on-demand apps:
*Ground Transportation and Taxi—*obviously, Uber has almost completely taken over the ground transportation/taxi cab industry, with over 160,000 registered drivers and 1 million rides ordered per day. But Lyft, BlaBlaCar and other transportation apps are challenging the traditional taxi cab companies as well, all but throwing them into obsolescence. In the not-so-distant future, expect for the taxi to fall into extinction altogether. The gig economy owns ground transportation.
*Food and Delivery—*the on-demand economy has also given the pizza guy a run for his money—more and more, there are engineers and startups making food delivery apps, like Grubhub and Uber Eats. Now, you can get an app that brings you whatever type of food you like, on demand.
*Concierge, Odd Jobs and Errand Running—*there has been a recent push for tech companies to make on-demand apps for, well… anything. TaskRabbit is probably the best known “chores app” in the gig economy. Need your lawn mowed? Need groceries? There are on-demand apps for that.
While the on-demand economy is finding a foothold in a number of other industries, as well, its affects are felt most strongly in the ground transportation, food and delivery and concierge industries. In span of just six years, tech companies in the gig economy have completely transformed traditionally static industries and have made a sizeable impression on the overall economy. Understanding the corporate structure within these industries is crucial for adapting to the changes brought by the gig economy. That said, what impact has the on-demand economy had on the staffing industry?
The Gig Economy and Gig Workers in the Staffing Industry
The on-demand economy has found its way into one part of the staffing industry already—short-term contingent and freelance work.
Companies like Shiftgig have created smart phone apps that connect on-demand talent with companies that need short-term work. Shiftgig can provide staffing services for companies/clients that need bartenders, cooks, porters, housekeepers, retailers, call center professionals and more—they have a diverse clientele and talent pool that has the potential to really interrupt the business for short-term staffing agencies in several cities.
“Staffing apps” are still in their nascent stages, but they pose a real threat to staffing companies that provide short-term and freelance work in a wide array of industries. So what can a staffing company owner do to make sure that he/she can keep up with the competition from the gig economy? Developing comprehensive business plans is essential for staffing companies to navigate the challenges posed by the gig economy.
Day-to-Day Operations in a Staffing Company
Day-to-day operations in a staffing company involve managing the flow of work, ensuring that clients’ needs are met, and providing support to independent contractors. This includes tasks such as:
- Coordinating with clients to understand their staffing needs
- Recruiting and vetting independent contractors
- Managing the assignment of work to independent contractors
- Providing support and resources to independent contractors
- Monitoring and evaluating the performance of independent contractors
A staffing company’s day-to-day operations are critical to its success in the gig economy. By streamlining processes and improving efficiency, a staffing company can better serve its clients and independent contractors, ultimately driving growth and profitability. Efficient operations ensure that clients receive timely and high-quality service, while independent contractors have the resources and support they need to perform their best. This operational excellence is key to building a reputation for reliability and effectiveness in the competitive gig economy landscape.
Business Strategy for Staffing Company Owners to Combat the On-Demand Economy
Tech companies are thriving in the on-demand economy because they are easy to use and easy to access. Just about everybody has a smartphone in 2017, and apps are thereby an incredibly efficient medium for both acquiring talent and filling staffing assignments.
So, a prudent staffing company owner will look to fight high-tech with high-tech— stay up to date on all of the latest software. Tech companies that are spurring the on-demand economy are very savvy with HR technology. Your staffing company needs to be, as well. Identify the best cloud-based HR software and incorporate that into your central business model. It is okay to outsource to technology providers—trying to create a functional program in-house is impractical. Utilizing board management software can enhance board effectiveness by providing essential tools and resources that streamline communication and facilitate governance.
Moreover, make sure that your company has gone mobile. Create an app that potential clients can download if you have several niche roles in your industry. Smartphone staffing apps are appealing because they have a user-friendly interface and are typically more aesthetically pleasing than a clunky desktop website. At the very least, if you do not want to take the leap towards app-development, make sure that your website is up to date on its mobile compatibility. It is essential for recruiting talent and clients.
Overcoming Challenges and Capitalizing on Opportunities
The gig economy presents both challenges and opportunities for staffing companies. Some of the key challenges include:
- Managing the risks associated with independent contractors
- Ensuring compliance with labor laws and regulations
- Providing benefits and support to independent contractors
- Managing the flow of work and ensuring that clients’ needs are met
On the other hand, the gig economy also presents opportunities for staffing companies to innovate and differentiate themselves. Some of the key opportunities include:
- Developing new business models that take advantage of the gig economy
- Investing in technology that improves the efficiency and effectiveness of day-to-day operations
- Building strong relationships with independent contractors and clients
- Providing value-added services that support the success of independent contractors and clients
By understanding the challenges and opportunities of the gig economy, staffing companies can develop effective strategies for navigating this complex and rapidly evolving landscape. Embracing innovation, leveraging technology, and fostering strong relationships can help staffing companies not only survive but thrive in the gig economy.
The Future of Staffing in the Gig Economy
The future of staffing in the gig economy is likely to be shaped by a number of factors, including technological advancements, changes in labor laws and regulations, and shifting workforce demographics. Some of the key trends that are likely to shape the future of staffing in the gig economy include:
- The increasing use of artificial intelligence and machine learning to improve the efficiency and effectiveness of day-to-day operations
- The growing importance of providing benefits and support to independent contractors
- The need for staffing companies to develop new business models that take advantage of the gig economy
- The increasing focus on corporate social responsibility and sustainability in the staffing industry
By understanding these trends and developing effective strategies for navigating the gig economy, staffing companies can position themselves for success in the years to come. Embracing technological advancements, prioritizing the well-being of independent contractors, and committing to sustainable growth will be essential for staffing companies aiming to lead in the evolving gig economy.
Small staffing company owners will have to make sure that they ride the way of HR technology innovation and keep their home websites compatible with mobile devices if they are to survive the rise of the gig economy. But a high tech approach may not be enough to grow your staffing company—you also need a stable cash flow. Are you having financial problems? If so, talk to Factor Finders about the payroll funding process. We can help eliminate your financial problems so that your company can expand and take on the gig economy.
