Is there a win-win in the context of the new sharing economy for part-time workers?
Over the past three years of building Wonolo, I have had the privilege of being in a unique position to meet and talk with two diverse groups. One group is those who are looking for work, but having difficulty finding work. Another group is those who are looking for workers, but having difficulty finding workers. One of the most recurrent topics that both groups discussed were issues relating to part-time work. From the worker perspective, one huge issue was trying to maximize work hours, especially combining part-time jobs. From the company perspective, HR executives identified that part-time workers were not only the hardest to recruit, but also the hardest to retain, resulting in a heavy turnover rate.
Let me take a pause. There are many perks to having full-time, benefited positions for workers. I will not discuss that larger issue of benefits surrounding full-time positions vs part-time positions here. However, the reality of the current economy is that the trend is moving towards part-time employees. In fact, it has been exacerbated with the Affordable Care Act as well as volatile recovery of the economy, which resulted in many companies like Target, Trader Joe’s, Forever 21 increasing the proportion of part-time workers to their total workforce. Within this large pocket of workers, there is a huge problem that is being unaddressed. Instead of ignoring the problem, my hope is to try to solve the problem that many companies and workers face.
There are numerous data supporting their pain points. For example, turnover of sales associates in retail is 66% for part-time workers compared to 27% for full-time workers according to the Hays Group. In addition, a Berkeley Haas School of Business study demonstrates that industries with 100% or more average annual turnover such as retail, food services and call centers account for more than 30M workers. Unfortunately, this problem is not going away soon.
Aside from the operational burden of constantly recruiting for part-time workers, it is also becoming an expensive problem for companies where the cost of losing an employee is between 16%-20% of annual salary in high-turnover industries. This means that it costs a retail company about $2,400 every time it loses a $10/hour part-time employee. That’s an astonishing number, especially for companies that employ thousands of part-time workers.
So, why is this happening?
HR Executives I met over the years explained that there were many reasons for this, spanning from job satisfaction issues to training opportunities, but one of the most common reasons was lack of hours available to work for part-time workers. Part-time workers are limited to 29-hours per week on average at many of these companies. As a result, they would have to constantly look for additional part-time job opportunities elsewhere to supplement their incomes. Sometimes, a nice combo of jobs can work out, but oftentimes in their search, if a part-time worker finds a better opportunity elsewhere, they will leave their current job immediately, resulting in the employer scrambling to find another worker.
This is a paradox.
On one hand, we have part-time workers who are constantly looking for additional jobs to maximize their work hours. On the other hand, we have retail companies like Target, Walmart, Home Depot, Lowes and GAP going after the same part-time worker pool with the similar set of skills that can be applied at any of these companies. Same thing is happening on the quick service restaurants like McDonald’s, Burger King and Wendy’s as well as hotels like Marriott, Hyatt and IHG. These companies spend millions of dollars fighting to recruit, train and eventually lose them to one another and repeat the process.
To many entrepreneurs, this is a fascinating problem and a huge opportunity for disruption. Companies want to keep part-time workers, and part-time workers would like to maximize their work hours. There is clearly a disconnect in matching supply and demand.
So, here is a solution to this problem to help both employers and workers: Share your part-time workers so that part-time workers can work at many other similar companies easily.
Let’s suppose that Target needs a part-time worker to cover Tue/Thur morning shift. John Smith, a part-time worker at Walmart, only works on Mon/Wed/Fri and is looking for additional jobs on Tue/Thur. If Target can get connected with John in the easiest way possible to cover Tue/Thur, the problem is solved.
- Target gets its job filled by someone who at least understands what the job entails with tangible transferable skill sets.
- John now has 5 days of work/week.
- Walmart has a part-time worker who is not dissatisfied with lack of hours, resulting in lower risk of turnover.
HR leaders may argue about potential conflict of interest, confidentiality, flight risk to a competitor, etc. However, the benefit far exceeds the potential risk (recall, this is a hundreds of millions of dollars problem).
Specifically, this is how it can work.
- Company A, B and C set up a strategic partnership to share their part-time worker pool. They agree on rules and boundaries they each abide by.
- Each company in this partnership sets up a corporate-wide program that helps part-time workers find job opportunities during their off shift at their strategic partners.
- Each company onboards their part-time workers into a centralized software platform that integrates with various existing HR systems in place.
- Partnering companies post available shifts (scheduled or just-in-time) on this software platform.
- Part-time workers are notified of available shifts via the software platform and pick up their normal shift at their “Parent” company as well as available shifts at their “Sibling” companies during their off shift.
Just imagine what this will enable.
- Companies get to help their part-time workers find extra jobs, allowing them to make extra income.
- Workers get to find extra jobs in the easiest way and meet their needs for additional income while potentially learning new skill sets and sharing best practices.
The networking impact this can have is huge. Think about Target partnering with companies like Best Buy, Home Depot and Safeway to share their part-time worker pool. Part-time workers work at Target, but also get to work at Best Buy, Home Depot and Safeway.
There are so many buzzwords about the new “sharing economy” of sharing cars, houses, food, but sharing part-time workers? This is the ultimate sharing.