June 22, 2024

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Why Small Businesses Struggling to Hire New Employees Should Embrace Gig Workers

Opinions expressed by Entrepreneur contributors are their own.

What a unique situation we find ourselves in: an economy seemingly on the rebound after a long pandemic, but with about 10 million job openings and few takers, even with federal pandemic-related unemployment benefits stopping. So why won’t unemployed or underemployed Americans take these jobs? Simply put, for many, the daily 9 to 5 grind was their old normal, but it’s no longer appealing in a post-pandemic world. Millions of American ‘digital nomads’ are seeking more flexibility to work from anywhere, and this trend is creating major challenges for companies looking to attract and retain top talent, from Wall Street to Main Street.

What if some of those unfilled jobs were restructured as gig-based roles? If you’re a small business owner especially, perhaps it’s time to consider a more innovative approach to attract and retain today’s talent. Gig-based independent contractors set their own hours, by definition, and typically work remotely. They tend to be less expensive than full-time employees and can be scaled up or down depending on seasonal or weekly demand fluctuations.

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Consider these statistics. About 36% of US workers are already part of the gig economy, 12% of whom started a freelance job during the pandemic. At its current growth rate, more than 50% of the US workforce will participate in independent gig-based work by 2027. Today, the US is already contributing 44% to the global gig economy, which will reach a gross volume of $455 billion by 2023.

Bottom line: the gig-based work trend is here to stay, and it’s also a distinctively American phenomenon.  

The New American Dream: Maximum Flexibility and Work-Life Balance

For months, we’ve heard about “The Big Quit” employee exodus. According to a recent Monster survey, more than 90% of American workers are now willing to change jobs or switch industries for a better work-life balance and job satisfaction. (Must be a very busy time for HR departments).

In fact, the pandemic has forced people to rethink their entire careers and the type of work-life balance they want moving forward. Burnout is real. The office environment will probably never be the same as more workers demand telework flexibility. And if those workers aren’t accommodated, they will find a new employer who will offer them remote work. With the ongoing uncertainty of new Covid variants, some workers may also be hesitant to return to a crowded office setting for years to come. Lastly, there’s always a risk of future furloughs or layoffs, pandemic or not. No job is ever 100% secure. It’s a harsh reality, but workers are always replaceable.

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The traditional American Dream of working at the same company or within the same industry for decades is over. The definition of what is a ‘good job’ has also evolved. The new American Dream is all about maximum flexibility and work-life balance. Side hustles and gig work are one way to potentially make that dream a reality for those who are interested in pursuing a non-traditional approach. Gig work is ideal for high school and college students who don’t want to wait tables, those with childcare or eldercare responsibilities at home who still have free time, those in a job or career transition who need a new source of supplemental income, as well as retirees looking for multiple income streams. (Social Security ain’t what it used to be.)

This new reality has created an incredible opportunity for small businesses to embrace gig workers.

My Pandemic Pivot

For example, in early 2020, many of our HotelPlanner customers found great comfort in speaking to an actual person, not a chatbot or pre-recorded voice. Despite the reduction in travel, we were receiving a significant increase in customer calls. We soon realized that as long as our call center agents had a reliable WiFi connection from home, they could still provide the same quality of customer service. Incidentally, we also had a lot of friends and family furloughed or laid off who were looking for something they could do besides becoming an Uber driver. This was a simple supply & demand challenge to solve.

In May 2020, our global gig-based travel agent concept was born and we haven’t looked back. To our knowledge, we are proud to have pioneered this concept for online travel agencies (OTAs), some of whom don’t even have a customer service platform. Our high-performing remote agents can earn up to $30-40/hour, which is better than the average Uber driver (or Starbucks barista for that matter). And that money will stay local to wherever the agent resides.

Unlike typical call centers who pay a flat fee, thereby paying for a lot of unproductive downtime, we only pay our gig travel agents a commission when they actually book a hotel room (i.e. when they convert a sale.) Our gig-based customer service platform is a sales driver, not overhead. This is a different model from traditional call centers. Our biggest operational challenge right now is activating and training them even faster because we have so much interest.

This is just one example of what’s possible when a business in growth mode embraces a more innovative approach to staffing its workforce. 

How to Transition to the Gig Economy

If you’re a business owner interested in pursuing the gig worker concept, I would suggest an incremental approach to test the waters first. You could start with a comprehensive HR review of all roles and identify which ones could easily be turned into gig-based opportunities. Next, pilot a gig-based concept in just one department, perhaps the one most likely to attract gig workers such as IT, customer service, or content creators. The pilot should reveal whether this concept could be applied across other departments.  

There is no one-size-fits-all approach for embracing the gig economy. It will look different at every single company across industries. For some, they may only be able to transition some of their middle and back-office roles into gig-based. Others may just hire gig-based workers during their busy season. Either way, this is an idea whose time has come. If you’re struggling to find and retain employees, business owners of all stripes should seriously consider how to incorporate gig-based workers. 

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