Rethinking Retail: The Gig Economy in a Post-Pandemic World
If the gig economy was growing before the pandemic, it has now burgeoned into a trend that will have a major impact on how retailers manage their human capital into the foreseeable future. As most Americans adapted to working from home, the value of remote work—primarily, independence and flexibility—literally hit home for many people. For many people who were furloughed, forced out of the traditional workforce, or laid off, joining the gig economy has given them the chance to rebound fast. But a significant portion of workers has simply declined invitations to return to the office because they want to maintain control over their work/life balance and skip the 45-minute commute.
The pandemic has accelerated the rate of change and expectations around work flexibility, and recent surveys bear this out. A survey conducted by Upwork found that 36% of the American workforce has been freelancing during the pandemic—an increase of 2 million over 2019; and those freelancers contributed $1.2 trillion to the U.S. economy in annual earnings, a 22% increase. A Monster.com survey found that 92% of respondents said they think now is a good time to look into the gig economy. Among those, 52% said they desired long-term contracts.
The gig economy is poised for more growth, and not merely by moonlighting as Uber and Lyft drivers. A study by PRO Unlimited, a global innovator of contingent workforce management software and services, showed that 40% of skilled, white-collar workers are contingent workers. PRO’s CEO says, “By late 2021, we expect over half of skilled workers will be contingent and employers will need to successfully manage this expanding workforce as part of their overall human capital strategy.”
Looking ahead, it is Gen Z, the youngest segment of the population, that is driving the trend. A 2020 study by Edelman Intelligence found that 50% of Gen Z workers and 44% of Millennials have participated in the freelance workforce. Their first jobs are generally as part-time, independent contractors, and it’s not solely because they are unskilled or have a hard time landing a job. They comprise a highly qualified, highly productive portion of the labor market. In fact, the average retail worker is 20 to 40 years old—all Millennials and Gen Z.
THE GIG ECONOMY: RETHINKING RETAIL
Embracing the expanding gig workforce isn’t optional anymore; it’s a necessity for many businesses, and especially retailers, that want to maintain optimal productivity and successfully compete now and into the foreseeable future. Merging the gig workforce into your current employment model may require some intelligent rethinking of your financial, marketing, and human capital strategy.
THE GIG ECONOMY: OUTSOURCING ADVANTAGES
Outsourcing your gig workers is a recommended option in many circumstances, particularly when:
1) You need temporary workers to handle times of heavy need. While certain functional areas of your business are manned with a core company staff, there is also a cyclic nature to the work. You may want the flexibility to surge your labor force to peak capacity in response to the rollout of a specialty product or new brand, for instance, and then as the work levels off and volume decreases, begin to release staff.
2) You need access to specialized planning resources, and those skills are not readily available in-house. This is common in the retail strategic solution area, where unique modeling or analysis must be conducted during the design phase of a project. This may require highly trained business process engineers or GIS data scientists to step in to ensure you are maximizing your process, approach, or coverage.
3) You require staff augmentation for a particular functional area. This is not simply for a surge, but for filling new roles in a particular program or project. At the start, because of the uncertainty of the effort’s future, you may not be ready to justify the addition of full-time staff. Outsourcing partners can help here by monitoring the work and, if sustained, allowing conversion of temporary employees to full-time company staff after a pre-defined period of performance.
THE GIG ECONOMY: GETTING A RUNNING START
Ready to start incorporating gig workers into your business model? These basic steps will get you started:
Determine new ways of recruiting, starting with identifying who you want to attract and why. This may involve identifying new roles, establishing new qualification standards, and recreating schedules within your organization so you can maximize the work. Your employees must, of course, possess fundamental qualifications and skills, and in addition you should map out flexible availability and scheduling options, create procedures for matching their career pathing steps to your organization’s work, and connect their different interests to future roles.
Offer learning and development opportunities for employees to improve their skill sets and knowledge base.
Provide ways to auto-schedule all employee resources based on a balance of when the work is needed, so you are consistently matching what needs to be done with who’s available and qualified to complete the work.
Utilize technology to bring all this together so that your matching of qualified resources with work needs will come together to both maximize the employees’ time (giving them the hours they desire) and optimize the hours for you as an employer. There is no one, single system that likely does everything for you—in some ways technology is still catching up with the times—so you’ll need to define your requirements and do the research to pull together the right solution.
Ensure that there are commensurate benefits for the type of employee you are recruiting based on the classification of full- or part-time in your marketplace.
THE GIG ECONOMY: FACING THE FUTURE
The toughest challenge companies initially face in taking advantage of the new gig economy is adjusting their mindset. You need to think differently about how you source employees, train them, manage them, and even how you pay them. It’s a lot of change all at once. Once you commit, take it one step at a time.
Of course, this is one reason why companies choose to partner with outsourced sales organizations: We’ve already figured these things out. Through years of industry experience, we understand how to create solutions customized to your particular business.
Some companies fear the new gig economy model because they think it will take away jobs from current employees, or because they don’t feel they can’t trust workers hired by a third-party staffing partner should they choose that route. We have not found this to be the case with our clients. In fact, typically our gig workers actually become an extension of the client’s brand and consistently outperform current employees, and without the necessity of unseating them. Our clients and our employees appreciate how we deploy technologies and make operational changes to take advantage of this strategic evolution in human capital management. They are excited to be a part of it all. And our close business relationships reach a point where, truthfully, we are providing an insourcing service.
You may be familiar with gig workers in terms of related legal challenges. In 2018, California Assembly Bill 5 (AB5) extended employee benefits to many independent contractors in that state. Then in 2020, California Prop 22 would have reclassified drivers for Uber, Lyft, and DoorDash as employees as well. Ultimately, Prop 22 was voted down. Although the Biden administration’s new Labor Secretary Marty Walsh is pro-worker, a move to apply an employee model to gig workers could inadvertently dissolve what they value most, i.e. flexibility and the ability to “hire yourself.” And if big companies must provide full-time benefits to independent contractors, it may not be as easy to justify those additional hiring costs.
However, from what we’ve learned, no level of governance will kill the growing gig economy. With millions of future employees having been exposed to the gig economy, the genie is out of the bottle and you can’t put it back in! It’s similar to what happened when the music industry fought against Napster, which allowed MP3 music downloads for free. When the government stepped in, not only did the music industry survive, it inspired innovations in the marketplace that resulted in better and easier ways for people to access the music they wanted. We expect similarly positive innovations to occur in the labor market.
Regardless of any new laws or requirements, the companies destined to succeed in navigating the new gig economy will welcome it with the help of advanced workforce management platforms and an experienced outsourcing partner that can rapidly maximize the recruiting, hiring, and onboarding of these talented and willing workers.
Change can be scary, or it can be something we embrace. As the American engineer and futurist R. Buckminster Fuller famously said, “You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.”
You don’t have to figure out the complexities of hiring gig workers on your own. MarketSource professionals are hyper-focused on recruiting, training and workforce enablement to drive performance and can ramp up your workforce to meet rapidly changing needs. The team members we put on board consistently outperform other retail workers.
Are you interested in making the most of gig workers in your labor force? LET’S TALK.