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Problems with On-Demand Labor and How to Fix Them

By Steven Calhoun on Dec 3, 2020 3:12:46 PM

When you’re first looking into on-demand labor, it’s a bit intimidating to consider all the ways this new model might or might not work for your business. You probably want to know what might go wrong. Even if you’re not thinking about it now, we know it’s important for you to be aware of the problems that could exist with a solution like ours. 

This article will address these common problems and give you solutions for fixing them. Full disclosure, most of these problems are avoidable and a few of them are only problems with perception, not actual problems with the on-demand labor model.

Here at Veryable, we are an on-demand labor platform. You might think that could make us biased about these problems, but it has also given us experience steering customers through these issues. We have helped thousands of companies implement on-demand labor, and now we are here to give you an honest look at the problems you should be aware of so you can avoid them by planning ahead.

We wanted to clear up any confusion and save you from wasting your time, so we’ve outlined some of the most common problems with on-demand labor and how to fix them.

 

The most common issues with on-demand labor and how to fix them

  • Training new on-demand workers frequently
  • Building a labor pool is necessary to see the full value
  • Time commitment required by platform administrators
  • Workers you want aren’t guaranteed to want to work for your company

 

Training new on-demand workers frequently

Many businesses do not like the idea of constantly having new workers coming through their door all the time. It’s understandable that you don’t want to train new people frequently and instead prefer to rely on the same workers consistently.

This presents a problem when companies start using on-demand labor.

By its nature, on-demand labor will introduce new workers frequently at first, and then periodically after you build a roster of workers familiar with your business. These new workers along the way will require training.

One way around this issue with on-demand labor is to simplify work processes and assign general work to on-demand labor. If there are any parts of a job that can be simplified or broken into smaller parts that require less skills or training, this is a way to create more general work that is separated from skilled work. This will reduce the time needed to train new workers, and has the benefit of tasking existing employees with higher-skilled, value-add functions.

Even with other staffing methods, training new employees is something businesses have to do because of turnover. If you aren’t improving and updating your work processes to accommodate the workforce, you certainly should be, because you need to be prepared to integrate new workers if your current employees get sick or quit unexpectedly.

 

Building a labor pool is necessary to see the full value

On-demand labor provides the greatest value when it is being used to build a flexible labor pool. Training new workers regularly and taking chances on new workers are a necessary part of this process. When on-demand labor is only used as an alternative to temporary staffing, the full value of this model is not realized. 

We admit that it does take some work, but to see the rewards of the on-demand labor model, you need to trust the process and invest the needed time and energy. When you do, the process of building a labor pool is ultimately rewarding in the form of reduced hiring costs and increased ability to meet demand.

 

Time commitment required of administrators

On-demand labor is not a hands-off solution. It will require someone to spend time managing the administration of the program, confirming workers have arrived, ensuring they are ready to work, and making sure your company is consistently building your labor pool.

The only solution for this is to understand the time commitment someone in your company must make to manage your on-demand labor implementation. This can be one person or multiple people, but they should all clearly understand the goal of the initiative and how to best use on-demand labor strategically in your operation.

 

Workers you want aren’t guaranteed to want to work for your company

The fact is the same as with any job posting: you cannot guarantee that a good worker, or any worker for that matter, will choose to work with you. 

Businesses sometimes think that since they’re using a platform like Veryable, they are guaranteed to find workers. This belief is a ghost from the old staffing paradigm that haunts the on-demand labor model. 

Many on-demand labor platforms are marketplaces. That means they prioritize the workers’ ability to choose which companies they work with just as much as the companies’ ability to choose workers. With this model there will be winners and losers, based on the value that businesses choose to signal to the workers in the marketplace.

One way to be a winner is to offer higher pay and favorable shifts. It is also important to treat the workers who come to your company well, because they might spread the word and help recruit more good workers. For example, on Veryable, your company receives visible ratings from workers based on job posting accuracy, how safe your work environment is, the support you give workers, and the culture of your workplace. These ratings might affect whether or not workers want to work with you.

 

Starting with on-demand labor the right way

There are a few key ways to avoid most of these problems. We’ve assembled these steps into one blog article, outlining things like understanding the time commitment required, involving multiple people in the implementation process, focusing on one area first, and more. 

Avoid the most common problems with on-demand labor by reading our guide on how to get started the right way.

Steven Calhoun

Written by Steven Calhoun