Week of November 4, 2018 — This Week in the Gig Economy
In this publication of This Week in the Gig Economy, we’re covering topics ranging from the latest developments in the Gig Economy, The Labour Market as a Predictor of Economic Slowdown, and trends for the Future of Work. Without further ado:
Gig Economy Developments
One of the major drawbacks of using a service like Uber, is the annoying ‘surge pricing’. Well, there’s a solution for that too, but it comes at a price. Uber is launching a new subscription based membership for its riders, dubbed the ‘Ride Pass’. The Ride Pass will have benefits for constant users of the Uber service, and it will increase consumer lock-in for the brand. This is one of the many tactics Uber is employing ahead of its 2019 IPO, in order to bolster its market position.
Amazon’s delivery service may become even more efficient. The company has decided to partner with Canadian delivery startup, Parcelpal. The firm is finding it difficult to keep up with demand created by its Amazon Prime two-day delivery service. So last June, the Seattle-based company announced with much fanfare that it would create a Delivery Service Partner program aimed at jump-starting hundreds of small logistics businesses across the country. The initiative gives entrepreneurs resources to hire drivers and lease up to 40 vans to deliver Amazon packages from warehouses to homes.
Ahead of the Gig Economy wave that is to come, a London based fintech, Portify has launched. The firm offers an app and various financial products to help gig economy workers better manage their finances and in turn improve financial well-being. With the recent trends of decreasing job security and poorer overall financial education, the firm offers a number of tailored financial products, accessible via its mobile app, to help flexible workers get insights into their current financial status and income, as well as do short and long-term financial planning.
Slowing Economy, as Predicted by Labour Market Indicators
Unemployment in the United States is at a 49 year low, as it is hovering at 3.7%. According to experts, there are hundreds of thousands of jobs that are yet to be filled. The only option for companies is to get creative in their recruitment strategies, or increase salaries. The latter is more likely to succeed in a job-seeker’s market, and will result in decreased profits.
The temporary staffing market is often considered a leading indicator of the economic health as a whole. In the UK, the report on Job Vacancies index is at 60.3 in October (well above the neutral 50.0). The report also indicated that temporary/contract employment agency billings rose further in October, and the rate of expansion was the fastest since May. Meanwhile in USA, the American Staffing Index was at 103.50 (neutral being 100) as of the end of September 2018 (WoW & YoY growth both decreasing). As a heads up, growth in the American Staffing Index also decreased in the weeks leading up to the recession.
News from the temporary staffing world paints a global picture. Adecco, Randstad, and the ManpowerGroup are facing slower revenue growth in Q3 2018. Analysts at Swiss financial expert Vontobel said that Adecco’s third-quarter results “reveal a clear and broad slowdown in temp staffing across all major European markets.” Adecco only had a 1% revenue increase in their General Staffing divisions of North America, UK and Ireland. The firm saw the bulk of their revenue increase within the Career Transition & Talent Development division, so there may be an increasing focus towards up-market services divisions such as these.
Indeed isn’t free anymore?
Indeed will no longer be free for recruitment based companies, effective January 7, 2019. This is a bold move. Their rationale is that recruitment companies decrease the overall quality of job listings, and consequently decrease the search experience for job seekers. Meanwhile, the firm quietly launched Indeed Prime (for free), targeted towards the tech sector.
The job board war is on, and Google isn’t sitting quietly. The tech giant recently launched Google for Jobs, where they crawl through various job posting websites (but not Indeed), and post the jobs directly in the google search results. It will be interesting to see who comes out on top. One interesting component to this fight is that Google owns the first exposure to job searchers (everyone just “googles” stuff anyways), and they sell AdWords to Indeed.
Future of Work
- 64% of millennials want the office to change to remote working
- 43% of Gen Y consider freelancing as an alternative to a full-time job
- 52% of millennials consider work culture as the most important factor when choosing a workplace
Building on that notion, the Gig Economy is also expected to have major reformation before it becomes a mainstay. According to experts, the Gig Economy companies have to introduce fair pay, benefits, and may even have to embrace the employer status. This sort of sounds like a minor adjustment to the existing labour laws, let’s see where things pan out.
On that note, British PM, Theresa May is planning on ending the legal loophole for companies to employment agencies. Her goal is to require companies to pay their agency staff the same wages as their full-time colleagues, similar to Bill 148 in Ontario. The British Government’s plans come as a report released revealed that more than five million people are likely to be working in the so-called gig economy by 2022.
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