Hailing a ride. Delivering takeout. Tidying up the house.
They all fall under the growing list of services offered in the gig economy. Many of us have made such conveniences staples in our personal lives.
More businesses have started using gig economy services through online labor platforms. Think of the platforms as Uber-style portals that connect companies with on-demand talent. While the gig economy as a whole is not growing as fast as headlines would indicate, the labor platforms that help fuel them are.
Why have these matchmaker platforms gained steam in corporate America?
The reasons vary, though most boil down to the challenges associated with today’s tight labor market. Rising labor costs and a dwindling number of available workers have compelled companies to seek new options when it comes to recruiting.
And as a sign of their growing popularity, the companies that use platforms to tap gig workers extend well beyond small businesses and niche start-ups. Today, large legacy companies count platforms as key tools in their staffing toolkits.
Here are four ways businesses are integrating gig-style platforms into their talent acquisition strategies.
Hiring Blue-Collar Workers
Who would have ever thought? These days, companies have more difficulty recruiting blue-collar workers than white-collar workers.
Young adults are shying away from the trades and manual work and instead are flocking to white-collar work. And at the same time, those who perform much of America’s blue-collar work — baby boomers — continue retiring in droves.
Blue-collar shortages will persist for at least another decade in sectors including hospitality, transportation, manufacturing and retail. Without a sufficient pool of available workers, companies will have to offer higher wages and absorb weakened corporate profits as a result.
Consider Coca-Cola, which uses the platform Wonolo to hire merchandise delivery drivers for restocking shelves in between scheduled deliveries. For fast-moving consumer-goods companies like Coke, hiring drivers on demand can mean avoiding “out of stocks” and salvaging billions of dollars in revenue missed due to empty shelves.
Developing Talent Marketplaces In-House
Rather than rely on outside third-party platforms, some companies are creating their own. Internal freelance platforms can offer many benefits: workers who are a better cultural fit, distilled onboarding so they can hit the ground running, and reduced compliance and IP risks.
PwC has developed its own platform and talent network. While initially focusing on alumni and its current community of contractors, it also accepts external independent professionals to bid on projects. And then there’s The Washington Post. Its internal platform streamlines the process of hiring freelance journalists from anywhere to cover almost any subject, allowing them to more effectively report breaking news.
These in-house labor platforms, with their hand-picked talent pools and direct connections to internal projects and teams, encourage ongoing relationships between companies and independent contractors. As such, both parties benefit.
Hiring On-Demand Teams
The conventional thinking is that online gigs work best for one-off tasks or discrete projects that can be completed by an individual. Think of driving from point A to point B, designing a new company logo or tagging website images.
But rather than focus on individual freelancers, companies can now turn to “flash organizations.” Such groups comprise teams that are assembled on demand and then disband after they finish the project. In much the same way that a Hollywood film is created — by hiring a director, producer, and actors, all with predefined roles — a flash organization fills a predefined hierarchy of temporary roles. But it does so dynamically, using algorithms that source talent from online labor platforms.
IBM and Mastercard have used Gigster’s AI-driven platform to hire on-demand software development teams. Using these teams, the companies designed and created programs in a matter of days or weeks, compared to months of planning and sourcing using legacy hierarchies.
Achieving Innovation Through Crowdsourcing
To accelerate innovation, some companies are leveraging not teams but, rather, the power of the crowd. General Electric uses various crowdsourcing platforms, including its own GeniusLink and Fuse, to find solutions to tough engineering problems and innovate new products. For example, in one crowdsourced competition, an Indonesian engineer solved the company’s challenge to increase airplane fuel efficiency by reducing the weight of a single part by 84 percent.
The scope of services being offered through on-demand labor platforms is widening. Expect online labor platforms — especially those outside of transportation — to continue innovating on the types and modes of work that independent contractors can complete. As such, labor platforms will intensify their offerings of enterprise solutions so that more businesses can use them for taking their talent efforts up a notch.