My sister used Uber for the first time last week and she was blown away. Her family was on a mini-vacation to Disneyland and instead of waiting forever for the hotel transport or walking several miles to the amusement park, she tried this newer innovation from her cell phone. Within minutes a young woman with a minivan pulled up and my sister and her family piled in. For just a few dollars they were transported to the happiest place on earth and this young mom who needed extra cash made some money with minimal time or effort.
On demand businesses are growing at a phenomenal rate and there are a few factors contributing to this booming market:
- Smartphones are making it easier for businesses to connect with consumers instantaneously and can deliver products or services within minutes
- With Obamacare and the ease of obtaining health insurance, it’s easier to become an independent contractor without losing out on traditional benefits offered with full-time work
- Internet access allows anyone to work from anywhere
- Workers are looking to supplement their salaries from traditional employment with alternative opportunities
However, with more entrepreneurs and small businesses entering into this unique marketplace which employees on demand talent and independent contractors, are there enough available workers? Steve King, partner at Emergent Research, explains that one of the problems with this workforce is that, “Most of [these] companies are trying to attract independent contractors from roughly the same pool—people looking for flexible, independent work in the service sector. A lot of these types of workers are only interested in part time work.” King further states that, “Companies that depend on on-demand workers came of age during the post 2008 recession and its ‘jobless recovery’ are already facing worker recruitment issues. Otherwise they wouldn’t be spending so much money trying to find and hire people.”
In addition, the need for this segment of employees is projected to increase. CPO Rising, a resource for Chief Procurement Officers, sites the following statistics:
- Nearly a third (32%) of today’s total workforce is comprised of non-traditional and non-employee labor and talent.
- By the end of 2017, anywhere from 45%-to-50% of the world’s total workforce will be comprised of workers from this segment.
- 92% of enterprises cite non-traditional talent as a moderate-to-vital aspect of their overall corporate strategy.
- Nearly 60% of all contingent labor is unaccounted for in financial planning, forecasting, and budgeting within the average company.
As a small business, you may very well be basing the future of your company on this valuable and cost effective work resource. As such, it would certainly be in your best interest to research the market where you are located and brainstorm some options for attracting (and keeping) the right workers for your business. Furthermore, contact an UpCounsel employment attorney to draw up the appropriate contracts and to inform you on the different requirements between hiring employees versus independent contractors.