May 24th, 2021 | Sterling
The Gig Economy Influence: What Every Industry Can Learn from Gig
What is the first thing you think of when it comes to the gig economy? Is it a food delivery service like GrubHub? Or perhaps it’s a popular ride sharing app like Uber. While these services are ubiquitous and well-known within the gig space, it is important to look at gig a little broader and see that these services are all around us and span across multiple industries.
A traditional way of understanding the gig economy is to look at it as an elephant. Yes, an elephant. Depending on the area you are focusing on, it may look/feel different, but at its core is the idea that an individual is their own free agent and chooses a specific nature of work. The way in which these individuals relate to a business or platform is by picking and choosing opportunities, performing the work, and getting compensated for said work.
You might now be thinking, “How then does gig relate to other industries?” and we can help answer that. Recently, on an episode of Sterling Live, Steve Smith, Managing Director, Sterling EMEA, joined David Bloom, General Manager, Gig, Consumer, and Volunteers at Sterling, to discuss an overview of the gig economy, the influence it has on other industries, and why every industry can be considered gig.
Here are some of the main takeaways:
The Evolving Workforce
There is no “gig industry,” according to David Bloom. “There is a gig model and approach to work that is gig. It has been made famous with things like rideshare and meal delivery, which were always where people went to grab a few shifts of work or a couple hours to get some extra money. But it is way more than that now.” Gig is a “horizontal” as opposed to a “vertical” and a gig approach can be found in industries like healthcare, finance, retail, logistics, and manufacturing.
As the workforce continues to evolve, we see a shift in how people engage with work, but the actual organizations and the industries remain the same. This shift should have organizations asking the question, how can we disrupt in different ways and create gig-like opportunities for our established business? Steve Smith provides an answer: “Businesses need to be a little bit gig, and gig needs to be a little bit of every business as well.” At Sterling, we use a verticalized approach to support our clients, enabling us to deliver functional and deep market expertise across industries. We see first-hand how organizations within healthcare, transportation, and retail, for example, can benefit from a gig-like approach and model.
Steve Smith shared an example from a retail client. “They’re applying gig thinking to some areas. They’re thinking, well, we need to sometimes deliver our goods to customers’ houses. We need to send taskers out to assemble things. We need to get creatives and designers involved. So taking a gig model and applying it within that traditional model is exactly how it’s happening at the moment.”
In February 2021, the UK Supreme Court ruled that Uber drivers are not self-employed and that they are entitled to worker benefits. This ruling reflects on the maturity of the sector, the strength of the gig workforce, and the importance of delivering a great customer experience, which traditional businesses need to look at closely. Gig workers are now driving the conversation by still acting independently but also having the option to receive full-time employment benefits. As stated above, the workforce is evolving at a fast pace, and one way to keep up is to listen to your employee base to spotlight opportunities to adapt, grow, and scale.
“There is a push and pull to gig dynamics here. The pull is by the employees themselves who don’t want to work in one company the same way. We will see fewer people wanting to engage with traditional models. You must go where the market is taking them. And then the second part of that is how quickly these dynamics are changing. These are not multi-year business cycles anymore. These are in some respects seasonal business cycles,” said David Bloom. Workers are looking for more flexibility and businesses need to have more flexibility and mobility to offer.
How Gig Companies Successfully Scale and Grow
Gig has been growing for years, but some gig organizations saw significant growth during the Covid-19 pandemic. And although some organizations did not see growth, lessons from the pandemic allowed them to understand where they can scale and grow in the future.
2020 positioned gig organizations to put their approach and models under a microscope for better decision-making. Instead of adding new lines of business, some gig organizations doubled down on their programs, allowing for more efficiency. Incorporating a robust background screening process allowed for organizational focus at a high level, more focus on what program was needed at the trust and safety level, and thinking about an individual applicant’s onboarding experience.
Competition also drives organizations to scale, and, for the most part, scale more aggressively. If there are two or more organizations offering the same service and going after the same market, the questions needed to be asked are: where are we targeting first and which areas will be the most successful? These questions are important when scaling against competitors because in the gig economy, you must go where your customers are. Organizations cannot get locked into one area when growth opportunities can rise in another — building out your worker pipeline will allow you to serve customers while remaining flexible and serving when and where they need to be served.
Industries not building out a gig workforce still use these practices by leveraging existing gig platforms. As gig organizations scale, traditional B2B brands can tap into their services as a logistics arm of their business. This addition allows for another approach to scaling and growth for both organizations.
Building a Foundation of Trust and Safety
The approach to trust and safety can differ from organization to organization and across multiple industries. At Sterling, we receive the common question from our clients: how can we balance cost with our desire to create to trust and safety?
To understand how different gig organizations are committed to creating safe work environments, we can look at how they approach background screening. Looking into this approach can reveal the appetite for building out trust and safety for the people on their specific platform and those using the service. For example, a delivery service may look into specific areas like Motor Vehicle Records and develop other options with expansion, while an organization within healthcare has a greater requirement for trust and safety. This shows that baselines are developed and will vary per industry.
Once baselines are established, some organizations create further options. Workers may seek out a more robust background check to build a stronger profile (if applicable to the platform) and the confidence to deliver a more trustworthy customer experience.
We have come a long way from the mentality that trust and safety is someone else’s responsibility within the gig economy — this does not protect the brand or the userbase. The workers you hire represent your organization. If you’re thinking about leveraging gig workers for your business, whether you’re using an established brand to help you or building your own platform, they represent you, so building a foundation of trust and safety must be a priority.
A shared experience in the gig economy that spans across the globe is moving potential workers through the hiring and onboarding process as quickly and easily as possible, while being diligent and thorough. Gig workers can drop off one platform and move to another if the onboarding process is frustrating or just takes too long. A key to success is to think of the processes like a supply chain — place importance on individuals getting fully onboarded quickly, diligently, and thoroughly, but also put emphasis on getting as many people through as possible.
David Bloom puts it this way: “I think of the background check as the customs house of the gig supply chain, and the longer your supply sits in customs waiting to be cleared, the more likely those products are to get stale. So that is why the experience and the efficiency throughout matters in gig.” Trying to execute on a quick and efficient experience can be difficult on a global scale, which is why it’s important to partner with an organization like Sterling. We help educate our clients on the differences of background screening from country to country, which allows them to effectively change workflows, onboarding cadences, and product and operating decisions.
Aside from a background screening partner, all other vendors that gig organizations partner with should have global reach and local expertise. Vendors that operate globally understand how to scale and how to operate efficiently, but local expertise is crucial when guidance is needed with local laws or customs. There is a lot of opportunity for growth and the fluidity in which businesses are starting to not only imagine new opportunities but also execute on them is an exciting global trend that organizations need to be ready for.
We are constantly seeing how quickly and frequently the workforce changes. There are many synergies between the traditional workforce and gig, and as traditional organizations adapt to these changes and grow, they should look to the gig economy as a resource.
If you want to learn more about how Sterling is a one-stop shop, with all the core screening services as well as newer offerings designed specifically for gig, click here.
Sterling is not a law firm. This publication is for informational purposes only and nothing contained in it should be construed as legal advice. We expressly disclaim any warranty or responsibility for damages arising out this information. We encourage you to consult with legal counsel regarding your specific needs. We do not undertake any duty to update previously posted materials.