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Top 3 Benefits of On-Demand Labor for Small Businesses

Mike Kinder
March 24, 2018
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On-demand labor gives small and medium sized businesses the flexibility needed to grow and manage costs.  No one feels the effects of capacity constraints more than small businesses.  Orders are often turned down or missed, costs are often inflated during lulls in demand, and administrative costs around hiring/firing put unnecessary burdens on an already challenging cost structure.  Veryable’s on-demand marketplace aims to address these core challenges for businesses.

Revenue Growth

The fact of the matter is that demand is always going to be unpredictable and volatile.  Advancements in technology and analytics allow companies to improve demand planning, but even the best forecasts are still imperfect.  As we discussed in a prior blog called Forecasting vs Flexibility, there is still a lot of opportunity for businesses to build in flexible capacity.  The flexible capacity is what will enable your business to respond to the full spectrum of revenue opportunities.

For an example, a Veryable client – 3rd Party Logistics company – realized it could grow revenue over 10% by bidding on small consumer product displays for a large retailer in the DFW area.  The company has approximately 20 full time employees, all of which are needed fully dedicated to the standard operational priorities: material handling, breaking bulk, loading and unloading trailers, etc.  In order to fulfill the incremental assembly work, the company used Veryable on-demand labor to come in on the day the materials arrived and build the assemblies.  Once the assemblies were built, the client inspected and signed off on the work, initiated payment, rated the workers, and bid them farewell.  Not only did the client just catch a significant revenue bump, but it was able to do so at essentially zero cost to scale.

Cost Containment

Another common challenge prohibiting small business growth is the cash outlay involved in on-boarding resources in advance and the subsequent labor efficiency issues with making them productive.  The investment always precedes value realization, often with a substantial lag.  Even managing productivity of full time labor against normal demand volatility can be a major challenge for small businesses.  With fewer employees, demand cycles are more profound since you have fewer options to flex internally, i.e., major order rate increases require external resources and decreases require a reduction in force.

Veryable helps small businesses deal with the challenges across multiple dimensions.  Many of our early clients have committed to using Veryable as the way to manage the +/- 20% order rate swings, maintaining a full-time headcount to achieve the 80% level (which typically represents the low point in any demand cycle).  This strategy has added stability among the full-time headcount, including stability in per unit labor costs, while giving these businesses the ability to always catch incremental volume.

Other strategies include the use of our piece work option where you pay a fixed price per unit produced or task performed.  The same 3rd Party Logistics company mentioned above used piece work for their assemblies.  What previously required a 5-person team over a full week from traditional temp staffing firms only took 3 Veryable operators 4 days to complete.  The company realized over 50% labor cost out using Veryable – the key driver being the ability to move the productivity burden on those doing the work.  People want to work efficiently when it is in their financial interest to do so.


Fewer Administrative Burdens

In addition to challenges around revenue growth and cost containment, small businesses typically do not have the infrastructure required to perform excess administrative tasks.  From hiring and firing to onboarding and training to payroll and benefits, small businesses need results today and need the ability to bypass the administrative burdens.

Veryable is set up to cut out all of these burdens.  All transactions are processed through the platform at the click of a button.  All costs are expensed at the time of completion with no further obligations.  All payroll costs, taxes, and benefits are invisible to you.  Your only obligation is to provide a safe place to perform the work and adequate resources.  Our process has been designed to maximize the value add to your business.

Stories From The Real World

In this video, operations leaders from several small-medium sized businesses explain how they've been able to acquire new customers by leveraging their on-demand labor pools.


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Mike Kinder

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