By now, the disruptive effects of technology on traditional business models are all too familiar. The battle between taxis and ride-sharing services might be old news already, but today, peer-to-peer lending platforms and other emerging tech-driven financial products are continuing to ruffle the feathers of our stalwart financial institutions. And that’s before we’ve even considered the future effects of cryptocurrencies and blockchain.
But new and disruptive business models aside, technology is also playing a game-changing role in the way businesses source and engage the best human talent to drive them forward in this highly-competitive, innovation-driven environment.
The gig economy is on the rise
Right now, we’re seeing more and more highly-skilled professionals shunning permanent, full-time jobs in favour of short-term ‘gigs’ – all thanks to the growing number of online marketplaces which make it easy for people to connect, communicate, and collaborate wherever they are in the world. Indeed, the familiar nine-to-five employment contract is rapidly being rewritten. According to studies, the gig economy could contribute around $2.7 trillion to global GDP by 2025.
It’s a win-win scenario
With Millennials expected to make up 75% of the global workforce by 2025, their alternative attitudes, values, and expectations around work will have an increasing impact on how businesses go about engaging and leveraging their skills. Today, Millennials are seeking to take control of their own career paths and development opportunities while maintaining a healthy work-life balance in the process. And of course, they expect to be competitively rewarded, too.
Whether it be for IT skills, consultancy services, creative services, or anything else, online marketplaces are enabling the Millennial workforce to build professional schedules that fit around their personal commitments, while they’re free to choose the businesses they work for and projects they work on. For most, participation in the gig economy isn’t about hopping from job to job – it’s about gaining broader experiences and upskilling faster.
Businesses operating in a fast-paced environment rife with competition understand that highly talented and agile workforces will be key to future growth and success. With online marketplaces, businesses can respond effectively to changing demands by immediately tapping into a growing pool of gig economy workers – without the expense of recruitment. And they’re not restricted to local talent, either: when finding the right candidate is of greatest importance, online marketplaces transcend the bureaucracy of visa regulations and open the door to a global network of skilled professionals.
Experiences win in a highly competitive environment for online marketplaces
The gig economy is no longer something people experiment with – it’s becoming a real career choice for Australian workers almost as quickly as it’s becoming a vital resource for businesses. And this trend isn’t just a fad: over two-thirds of the population are now said to be spending and earning money through the gig economy.
Consequently, online marketplaces are operating in a highly competitive space where going global is the only way to scale on their mission to break down geographical borders between opportunity and talent. To this end, providing a platform that appeals to large numbers of gig economy workers around the world will be equally important to providing one that appeals to consumers.
Gig economy workers gravitate to platforms that offer the best experiences, and payout processes have proven to be an essential part of that equation. It’s why Uber launched Instant Pay and Lyft introduced Express Pay – both give drivers faster access to earnings in an increasingly competitive ridesharing sector. A report from Hyperwallet, in partnership with PYMNTS.com, revealed that more than three-quarters (77%) of gig economy workers would do more work if they were paid faster. The study also found only one-third of workers (34%) are paid within a day, while 36% say it takes up to a week and 29% say it takes more than one week to get paid.
The power of payment choice
As international transactions become more commonplace, there’s plenty of scope for online marketplaces to engage fast payments practices as a mechanism to gain a competitive edge. But it’s about choice, too: workers around the world have varying preferences in how they receive their earnings. For example, some might want funds to be transferred directly to a prepaid card, while others may prefer to withdraw cash, or even receive a cheque.
Today, there are tools that can offer payees the freedom to manage their payment preferences at the same time as giving payer’s complete control and ensuring payments remain fully transparent. This type of flexibility around payments will be key to providing an exceptional experience that doesn’t discriminate against different cultures, demographics, and personalities.
Preventing platform leakage
Attracting huge numbers of gig economy workers isn’t the only challenge online marketplaces face as we head into the future – they also need to focus on retaining them. While online marketplaces are a great platform for forming new working relationships, it’s all too easy for parties to take their relationships offline for future projects. This is what’s known as ‘platform leakage’ and it can easily make the difference between a marketplace’s success and failure.
Marketplaces can reduce platform leakage by ensuring that buyers and sellers continue to see the value in facilitating transactions through the marketplace. Examples of platform value include easy and intuitive interfaces, workflow management tools, multiple communication and collaboration methods, or even software-as-a-service tools to take care of mundane tasks. But now, flexible and fast payment options are playing an increasingly important role in building this value when facilitating payouts for large numbers workers across the world.
No doubt, the number of online marketplaces will continue to increase in line with an expanding pool of gig economy workers. Platforms will have to work harder than ever before to deliver exceptional all-round experiences in this game of numbers. It’s a real chicken-and-egg situation: buyers bring sellers, and sellers bring buyers. But if you don’t have a decent coop, how long before you don’t have any chickens at all?
Simon Banks, Managing Director, APAC, at Hyperwallet