Why the Gig Economy is Worth Investing in
Have we all become amateur musicians looking for our next opportunity to showcase our talents? Indeed, the working world has evolved to a stage where tasks can be defined by project instead of a formal job scope. Like amateur musicians going from pub to pub to perform, working professionals in many other areas are also seeking out bite-sized chunks of work in return for additional income, greater flexibility and autonomy. The gig economy is red hot and have become a new norm in today’s labour market. At UShift, an online staffing platform, we aim to be the bridge between gig workers and companies looking to benefit from a job market, where flexibility and data play a crucial role.
With the gig economy and technological advancements, we generally see reduced traditional search costs in recruitment and this has given rise to online staffing platforms. The industry of online staffing is expected to experience an impressive 37 percent CAGR till 2025 and I firmly believe that this will change the recruitment landscape as we know it. The disruption caused by online staffing platforms, has certainly been boosted by several pain points in the traditional recruitment industry. HR departments seeking out specific skills have to conduct labour intensive advertising, screening, background checks and interviews to ensure the candidate’s fit. This has led to pain points such as difficulties in filling vacancies, rising costs as salaries had to be increased to retain trained staff, and falling service standards as existing staff had to bear the burden of under-staffing. The online staffing platform have thus been able to address several of these pain points by acting as an intermediary between jobseekers and employers via a common web app that can be accessed on multiple devices. With platforms like UShift, advertising costs are now eliminated and the jobseeker’s skillsets and companies’ needs are matched by a proprietary algorithm.
Online staffing platforms such as Helpster, Jobdoh and ours have revolutionised hiring by leveraging on the economies of scale gained by doing the hiring for thousands of companies at a go. Costs are driven down greatly and talent pools expanded when the hiring needs of thousands of companies and thousands of jobseekers are met by a single algorithm with infinite scalability. Globally, the growth of online staffing platforms have also resulted in extensive fundraising. In just nine months of 2017, online staffing platforms raised more than $500 million, indicating how attractive and hot this industry currently is.
The interest in online staffing platforms is evident on a global basis. American startup, Shiftgig, raised approximately $20 million, UK-based Job Today raised over $43 million and Helpster, present in most Southeast Asian markets, recently announced a $2.5 million investment. Clearly, investors see this is an attractive market with a potential disruption looming, like we have seen in the transportation and hospitality industry. This has created some of the largest unicorns such as Uber, Didi and Airbnb and maybe an online staffing platform is next.
UShift, for example has proprietary technology that can drive down hiring costs in both time and monetary terms for hundreds of jobseekers and employers. Our value proposition extends even beyond that, as we also offer talent management, HR analytics, performance management and payment processing features. Thereby, we help companies drive down costs not just in recruitment and selection, but also in payroll processing, training and development and regulatory compliance. All in all, companies get the right staff quicker and cheaper than traditional hiring methods, leading to a rise in service quality.
I strongly believe that short term staffing needs will continue to grow, especially across verticals like food and beverage, retail, logistics, events and insurance sectors. All these will generate both blue collar and white collar staffing needs which companies seek to fill at the lowest possible costs while expecting seamless end to end recruitment solutions. Online staffing platforms are in a sunrise industry. They are expected to become the preferred mainstream hiring solution for blue collar ad hoc and temporary jobs, as well as freelancers, interns and contractors for white collar jobs in the near future.
