“Depending on which forecaster or pundit you believe, the on-demand labor pool may be as much as 50% of the workforce by 2020 - or as little as 18%.” - Jeff Dickey-Chasins

The on-demand labor world – better known as the gig economy – has been with us for a while now. Many recruiting ‘marketplaces’ focus on on-demand workers; others supply candidates to on-demand companies like Uber or DoorDash. Depending on which forecaster or pundit you believe, the on-demand labor pool may be as much as 50% of the workforce by 2020 – or as little as 18%. Yet talking about it at such a high, abstract level isn’t particularly helpful if you’re in the business of running a recruiting site focused on a particular niche or location. You probably want to know, ‘What is the on-demand economy doing to my traditional audience of candidates and employers? What is changing, and what is staying the same?’. You want to know that because, well, it’s your business. So let’s get granular.

First, let’s separate out the traditional freelancers – the graphic artists, consultants, and so on – from the on-demand crowd. These folks have been around for a very long time, so to say they are a ‘new’ part of the economy and lump them into the on-demand labor pool seems misleading. The traditional freelancer often came from a conventional job where he/she learned their skills and made their connections, then made the leap to freelancing for a variety of reasons. These freelancers usually work full-time and treat their freelancing like a full-time job. Often they’ve set up their own business to handle their work. Most of all, they are highly skilled at what they do, which allows them to command pay well above minimum wage.

Jeff Dickey-Chasins aka "The Job Board Doctor", HRExaminer.com Editorial Advisory Board

Jeff Dickey-Chasins aka “The Job Board Doctor”, Member HRExaminer.com Editorial Advisory Board

So who, then, are the media talking about when they say on-demand labor? They’re talking about low – or unskilled workers doing simple tasks – driving a car, delivering a package, walking a dog, and so on. These workers usually use a marketplace app to obtain and schedule their work. Research indicates that most are either working on-demand to supplement existing income from a ‘regular’ job, or ‘filling in’ until they can find a more permanent position. Only a small segment are using on-demand work as a full-time, long term job. Why? The employers they are serving are more focused on eliminating the need for humans (think Uber’s push for self-driving cars) than they are in retaining contractors with higher pay. The marketplaces themselves are optimized to pay the minimum amount required for maximum productivity, minute by minute. That means workers truly don’t see – and can’t expect – a long term future with their employers.

If you’re running a recruiting site or business, where does this come into your specific audience of employers and candidates? It probably depends on the types of work performed. Highly skilled jobs requiring considerable expertise, experience, and training are less likely to be affected by the on-demand economy, simply because employers need a higher degree of reliability and continuity than a marketplace can provide. Think about it: if you’re running a repair shop for an auto dealership, do you want to take your chances on a gig worker showing up on Tuesday morning to work for 3 hours on specific types of cars? Or would you rather have a mechanic that’s been with you for a while, that’s been trained by the manufacturer, and who shows up every day? I’m guessing the latter. And what about the candidate: would he or she rather have a regular paycheck, benefits, and predictability, or would he/she like to move from town to town, chasing 3- and 5-hour shifts at different auto shops for higher pay but no benefits? Probably the former.

But what if the candidate audience is low- or no-skilled? What if your employers offer simple, easily-taught tasks (in fact, tasks that may well become automated soon)? In that case, you are probably seeing a decent amount of your market shifting into the on-demand economy. Maybe you saw it coming a couple of years ago, and your ‘traditional’ job board or recruiting site is now a marketplace. If you haven’t, you should be thinking hard about your next moves. Is it worth staying in your niche, if there is a high likelihood of the jobs disappearing due to automation (think about those kiosks that seem to be displacing fast food workers these days)? Or should you follow where the jobs are going (who is going to install and service those kiosks)?

It’s obvious that on-demand labor is growing – although by how much is up for debate. It’s also obvious that its effect on the recruitment marketing industry will be unevenly distributed. Here’s a question: when was the last time you asked your employer audience about its usage of on-demand labor? Not recently? Never? Well…it might be a good time to start.

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