How Fast Growth Companies Can Hire Smart in the Gig Economy

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How Fast Growth Companies Can Hire Smart in the Gig Economy

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The on-demand economy is growing, and companies that service consumers through the quick delivery of goods and services through apps are expanding across industries from transportation to health care.

A report from the McKinsey Global Initiative in August found that about 4 percent of the working-age population has used digital platforms to earn independent income. That number is growing rapidly.

This success has relied on tapping into the large, and growing, pool of potential employees that earn their income from part-time or temporary sources. There are clear advantages these working models can provide for temporary workers, particularly students, seniors, working parents, or others that need flexibility in their schedules.

Still, the acquisition and retention costs of these workers can be costly for a fast-growing start-up, with companies offering lucrative bonuses and income guarantees to new employees. And, the flexibility of on-demand employees cuts both ways, with workers able to move quickly to new, to take advantage of more lucrative platforms or recruitment bonuses.

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Employees come to work for a number of reasons, and stay put or leave for a number of reasons. The on-demand economy gives employers an opportunity to think differently about how they motivate and retain employees, and how they make them successful in their work. MGI’s report identified four segments of independent workers: those who derive their primary income from their independent work and choose to do so; those who use independent work to supplement their income; those who make their living from independent work but would prefer more traditional jobs; and those who do independent work above and beyond other work to make ends meet.

For growth-stage companies, it is critical to assess which of these pools employees may be drawn from, and try to access the pool that will most meet their needs, particularly in light of cash constraints.  Do you need truly temp employees or longer-term independent contractors?  What is the cost of churning an employee for a particular task?  What are your demands for training?  Growth companies need to think strategically about how to source employees through the gig economy.

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