Increasing Staffing Company Profits with the Gig Economy

The term “Gig Economy” may have different meanings, so a definition is in order.

The term “gig” comes from the word “gigue”, meaning a short, lively, musical composition. This is probably why musicians first, and then other entertainers, began to use the shortened version “gig” to refer to their own short-term performances (jobs), as in “I have a gig Saturday night to perform . . .etc.”.

As used in this article, and, as related to the staffing industry, “The Gig Economy” refers to those very large, cloud-based digital platforms where millions of freelancers, with a wide variety of skills, are available, and easily accessible,for short term jobs or “gigs”.

Taking a closer look

While many staffing companies are, no-doubt, already using these platforms, many more are not and may be missing out on a significant source of profits while also being able to provide an increased level of service to their clients.

If you are not a current user of these platforms, this article is for you.

It will discuss both the benefits and the potential pitfalls of using them. The primary focus will be on the small to medium sized staffing companies who may want to explore or experiment but with minimum cost and time requirements.

To begin with, the point should be made that the “traditional” staffing company is, almost by definition, the original “gig” platform. A staffing company is one that provides workers with certain skill profiles to companies that need them for short terms, i.e.“temp workers”.

That is what staffing companies have always done and what the “new” Gig platforms do as well. The only real difference is in how it gets done. Although digital technology is a critical element in every staffing company (think staffing software), the new staffing platforms simply have greatly expanded the use of technology (Web, Cloud, Data management, etc.). While many of these newer platforms are a significant opportunity for staffing companies, others are not.

For example, many of these cloud-based platforms directly connect local freelancers with customers in their own locality, like Uber**, Lyft, HomeAdvisor, Grub-Hub, Instacart, etc.. Here the connections are direct, and they do not need “agents” to facilitate the service.

(**At the time this article was being written there was a significant NBC News article about Uber that changes what is being said here)  I intend to write more on this new development as more information becomes available)

Just as often, however, many of the larger worldwide digital platforms, offer hundreds of specific task fulfillments that have not usually been offered by traditional staffing companies. Here “agents” or agencies, can be quite useful in delivering these services to their clients. This new ability can also open doors to new clients.

On these platforms, the freelancers may be many hundreds or thousands of miles away from the businesses they serve (90% is B2B), and because of the distances involved, these platforms need to match skills that can be easily transportable(digitally)like those in the following categories:

This area of the Gig economy has several hundred thousand users (workers) in companies like:

Hundreds of different job orders (projects, services, etc.) can be provided. Fivver alone lists 147.

UpWork is one of the largest freelancer platforms, and although it may have less jobs “listed” than Fiverr, it really has hundreds available when you include their option to describe jobs not listed. For example, you may want someone to illustrate a concept or a manufacturing process. These may not be “listed” but can certainly be accomplished by a good Graphic Artist or Designer.

Because you will be drawing from a talent pool that is worldwide, you should be able to add your normal agency fee and still provide your client with a very competitive work product.

But, if you are going to sell some of these jobs to your clients, you will, obviously, need some experience working with the platforms.

Getting Started.

It is quite easy to begin and the initial steps cost nothing. I personally prefer UpWork. You can set up an account in just a couple of minutes and then “Post a Job”.

But, before posting your job, you may want to request a demo from UpWork to get some important details of how they operate. The demo is free. Afterwards, just choose a category and subcategory, describe your project in detail, and submit.

You will then get offers from many freelancers with a price and time frame for completion. Since you will, most likely, receive several offers with profiles of the people making them, you will want to review the profiles and ratings before making your selection.

UpWork also shows you how much money that person has earned on their platform which gives you another insight into how well the person may perform.

Although there is no obligation to accept any offer, you may want to follow through and hire someone to do a small, inexpensive job. This will give you some detailed experience working with and communicating over the platform. You will be working directly with your freelancer.

When you have accepted an offer, you will need to pay for it up-front, but the person who is doing your work will not be paid until either the whole job is accepted by you or a certain previously defined milestone has been satisfactorily achieved.

If there is a quality issue, get it fixed, request a revision, etc. UpWork appreciates this quality feedback. Workers also want to make you happy, not just to get paid, but, since you will be rating their performance, they need to keep their ratings high to ensure future “gigs”.

Quality has been an issue on all these platforms, but the vetting system has been constantly improving. Also, when you have completed one or more tasks, the system will bring up all previous jobs so you can access a preferred person for a future gig without “publicly” posting another job. You can simply send it to your preferred person.

Although it is a worldwide platform, UpWork also offers an easy option to present your job posting to only US freelancers. Using this option, you can still get very competitive prices, first because it is all bid work, and, secondly, because there are many areas in the US where the cost of living is much lower than NY or LA.

When you are sourcing workers from a world marketplace, language can be a problem even when the person’s profile claims to be “fluent in English”.

The good news is, as you know, that there are millions of people in other countries who speak English. Their technical skills indicate a level of education which often includes some working proficiency in English. We all have had experience with “Call Centers” in India, the Philippines, and elsewhere. Not perfect but it works.

There is an important caveat here, in that, foreign speakers can also miss the subtler parts of your directions. it is important, therefore, to be very clear. If your initial communications indicate that language is a problem, it would be better to move on to another vendor who has responded to your job posting.

The money you invest in getting some experience with these platforms could also yield some other benefits if you look for jobs (“gigs”) that will also benefit the normal running of your business.

Perhaps some graphic illustration for your website, or a 30 second animated video about your company to use as a TV ad and/or a post to your website and social media.

With a little experience, you will be ready to incorporate some exciting and very competitive new offerings to your clients. Make up a list of the jobs they may want to outsource before your next meeting then get back to them with a proposal the next day.

Move as slowly or as aggressively as you wish or are comfortable with. Every small job you do for your clients will increase your experience and produce a little profit.

When you are ready,set a modest goal of $100,000 or $200,000 in added business with your existing clients in the following 12 months. Then maybe set another goal of $100,000 with new clients.

Presentations of your core business will be enhanced by these new offerings, making them more interesting and helpful.

You could look at this new opportunity as if your staffing company simply added a few hundred thousand“temp workers” with an extremely wide variety of valuable skills!

Two important caveats 1. Never forget your core business; and, 2. Don’t sell clients on the platforms, just sell them on what you can do for them with very competitive pricing.

Good Luck!