Age old problem, new age solution
My thoughts on Gigs.
When we first launched Instawork three years ago, we articulated our vision to create economic opportunity for local businesses and local professionals, globally. We started this journey by being the essential hiring engine for the hospitality sector. We’ve grown quickly and are proud to share that we’ve connected thousands of Bay Area small businesses with a talented pool of job seekers. That said, we still hear from operators and owners that the labor market is tougher than ever. We hear from workers that the cost of living is higher than ever and they often need multiple jobs simply to make ends meet.
Hiring and retaining a family of restaurant workers is no simple task. We won’t get into the economic analysis which has been studied by many, but we have noticed patterns of behavior that point to a deeply ingrained culture of “speed hiring”. A spray and pray, numbers game that hiring managers have to play in order to keep operations moving smoothly. We believe that speed hiring is one of the major factors contributing to high turnover.
Does this sound familiar? A hiring manager is desperate to fill a position and moves quickly to hire a candidate that may only meet some of the criteria for the position. The applicant knows there are real costs associated with a job search (after all time is money) and is not likely in a position to negotiate wages or weigh other options, so they take the first job that comes their way, even if doesn’t meet all of their needs (wages/schedule/team dynamics). Sound like a recipe for high churn? Yep.
Low job satisfaction results in higher turnover rates and the revolving door keeps turning. According restaurant research group, TDn2K turnover reached 133% in 2017. Further their report indicates that 70% of restaurant workers leave their jobs voluntarily citing job dissatisfaction and higher pay as reasons why they choose to leave.
There is no magic solution to this systemic problem, however, we do believe there are ways to alleviate the stress and strife of being short staffed. Last October we began testing Instawork Gigs, a way for businesses to book hospitality workers on demand. We learned quite a few things along the way, here are the notable findings.
For business operators
- Most restaurants, bars, cafes, and catering companies have never considered using temporary staffing until they tried Gigs (Staffing agencies that service the hospitality industry are relatively expensive.)
- Managers love the fact that Instawork handles all the paperwork and payroll, and insurance for Gig workers.
- The dreaded last minute call out. Until Gigs, many restaurants or caterers would simply struggle through a shift or event if they couldn’t find someone on their staff to cover it. The premium cost of a Gig worker, is worth the few extra bucks if it means that operations and customer service will run smoother, leading to a more positive experience for customers of these businesses.
- Gigs gives operators the flexibility to grow their business via special catering or event or food delivery orders that they may have not had the staff for previously. Operators need staff to grow their businesses.
For hospitality workers
- Priceless flexibility. This is the first time that restaurant workers are able to make their own schedules.
- Higher hourly wages. On average, after taxes a dishwasher may take home 14% more per hour and prep cooks up to 29% more per hour!
- Develop their own network. Gig workers have the opportunity to work in a wide range of restaurants of their choice. This exposure gives them the opportunity to see how different management teams treat their employees — and helps them make informed decisions on what type of job environment they want to be in.
- Learning. Gig workers have the ability to develop and acquire new skills working across a variety of businesses. For example, a dishwasher with a desire to learn new skills can try her or his hand at being a prep cook or even line cook.
- Multiple job offers. More than 60% of Gig workers report being offered a job on the spot.
For both parties, Gigs empowers each with unmatched flexibility. As an operator, you can’t put a price on having the luxury of time to make the right hire to fill a line cook position. Conversely, for experienced workers who are looking to pick up a few extra shifts, or those who are looking to find a new team to join, Gigs empowers them with the means to be selective in their job search — resulting in better wages and higher job satisfaction. If both sides are able to make informed employment decisions, we believe we’ll begin to see a reduction in turnover rates.
I am confident that we’re well on our way to achieve Instawork’s vision to create economic opportunity for local workers and local businesses with the official launch of Gigs. A sincere thank you to all of our early users who have supported us along the way!