Navigating the on-demand economy

15/10/2021

The on-demand economy as a strategic competitive advantage: invest in what you need only when you need it, and scale as your business grows.

Navigating the on-demand economy

Hiring on-demand is the new way of getting work done. You might be playing catch-up later if you don’t participate now. Businesses are leveraging the on-demand economy as a strategic competitive advantage. The new mantra is to invest in what you need only when you need it, and be certain solutions can scale as your business grows.

The forces of globalization and technology are changing the way the world works. Together, they have created a significant trend: on-demand workforces that help businesses scale faster and smarter while they reduce risk and control costs. This post will introduce you to the ecosystem of on-demand workforces.

These businesses are connecting people who have specialized skills to other businesses in need, regardless of geography.

Who should consider the on-demand economy business model?

  • Startups looking to create or scale products and services
  • Executives looking for innovative service models that could give their companies an edge in a competitive market.
  • Marketing Teams that need creative and specialty services, such as a logo or template creation.
  • Enterprise Companies whose products or services include routine, repetitive back-office work that can be automated and/or outsourced.
  • Investors looking for a new competitive advantage for portfolio companies.
  • Entrepreneurs who seek to develop a new service or product

On-demand workforces: what they are and how they start?    

  • Offline – Platforms connecting people in the physical world to provide a service on-demand
  • Online – Platforms levering crowds of people in the digital world to provide near-immediate service delivery

It’s no secret: the rapid advancement and adoption of technology have radically transformed how we get work done. Platforms that once connected us to people in the physical world to provide a service on-demand now connect us to crowds of people who can provide near-immediate service delivery for businesses. The digital revolution has transformed the world of media, upending centuries-old companies and business models. Now, it is restructuring every business, every job, and every sector of society.

One such transformation is in the area of work, particularly how people get work and are compensated for it. Companies can connect a person with work in real-time, based on the worker’s expertise, location or availability. They can assign tasks automatically to people who want to work and pay them once it is complete. Companies can hire workers on demand. Put another way, companies now can hire workers on-demand, investing in resources when they need them, and not when they don’t.

Consumers were among the first to benefit from the concept of an on-demand workforce. One of the first successful on-demand models was once a little-known startup called UberCab. Today, it’s “everyone’s private driver.” When a customer uses its mobile app to request a ride, Uber sends a signal to available drivers in the area, and one of them chooses to accept the rider. The entire transaction – including the driver’s payment for services – is conducted via Uber’s Application Program Interface (API).

Examples of the on-demand concept in the consumer world are showing up everywhere.

  • AirBnB connects homeowners with travelers. Owners rent their spaces and travelers find lodging that’s more suited to their personal and travel needs. It also can be more affordable.
  • People shop for and deliver groceries with Instacart. Place your order and your choices can be delivered to your front door in as little as an hour.
  • TaskRabbit connects people in select cities with area workers who perform household repairs, clean, shop, deliver, help with a move, and more.

On-demand work characteristics:

  •  Pay-per-use
  •  Multi-tenant
  •  Near-immediacy
  •  Scalable
  •  Elastic, to meet the growing and waning demand

In the on-demand model, you can source the person or group best suited to your task based on expertise, location or availability.

The on-demand workforce: a phenomenon with many names

The on-demand workforce model serving consumers has given rise to a variety of names to describe its influence. Among those that stuck :

  • Gig Economy – Workers pursue work that matches their interests, location or availability. They choose multiple streams of income over the traditional single, full-time job
  • Sharing Economy – People, companies and governments share access to goods and services using community-based online platforms
  • Workforce Virtualization – Companies extend their capabilities by tapping talented workers from down the street or across the globe without the burden of hiring, training and retaining them
  • Platform Economy – Businesses use cloud-based platforms, smartphone apps and social networks to manage business activities. The supervisor is not a mid-level manager but a software platform

No matter what you call it, on-demand platforms and services are changing the way we work and interact with anywhere in the world. Whether they seek business services or a ride from Uber, consumers access labor using a growing number of on-demand technology platforms.

B2B on-demand labor model

As the consumer service model has grown and matured, enterprise companies have used its services. Business travelers use Uber to catch a ride to the airport and AirBnB to find lodging, making travel more affordable in the process. At the same time, new business-to-business (B2B) on-demand models are emerging. From sales and marketing to product engineering, HR to operations, businesses are using on-demand workforces and platforms to scale faster and smarter than ever, gaining a competitive advantage in the process. Marketing teams order creative services on Fiverr or 99Designs, which offer a wide variety of choices at fixed rates with a fast turnaround. Businesses can use a service provided by RevBoss who is seeking to solve some of the most challenging problems related to the outbound sales process by combining software and cloud labor to help SaaS businesses build their pipelines on-demand. A growing number of companies, particularly global enterprise and local startups, are using on-demand workforces as their strategic, often a secret, competitive advantage to scale smarter by reducing risk and controlling costs.

Key changes: on-demand vs. old economy

  1. Work is done by intelligent software platforms in partnership with people
  2. Technology-enabled networks can deploy talent more cost-efficiently than traditional companies