State of Recruitment: On-Demand Economy

State of Recruitment: On-Demand Economy

American employment patterns are evolving at an unprecedented rate. With connectivity and mobile technology soaring, workers are transitioning from more traditional, rigid work patterns to those that are more varied and flexible – simply because they can.

BLS studies report that approximately 16.5 million Americans are working in “contingent”, “alternative” or “diversified” work arrangements – which include temporary work, freelancing and jobs created by on-demand apps.

Trends in American work arrangements

27.7 million people worked part-time in 2016. While some chose this route voluntarily, others were compelled to do so for reasons related to income or job scarcity. This increasing number of people choosing jobs that require less than 35 hours per week of their time is significant; not only does it allude to the toppling standard of a neatly packaged 40-hour workweek, but it also precludes a shift in the way workers are hired for positions in the new, digital economy.

Among the voluntary reasons for choosing part-time, freelance or gig work is the freedom it brings to working life. Many workers seek the flexibility that comes with swapping full-time for part-time work, as it affords a more appealing work-life balance and provides more optimal conditions for quality output. Independent contractors made up 6.9 percent of employment in May 2017, and the vast majority of them were satisfied with the setup of their work. Freedom in these diversified work setups means that workers have more say in when, how and where they make an impact in their jobs.

There’s no better example of this freedom than the on-demand economy (alternatively: sharing economy, gig economy or freelance economy.) Platforms such as Uber, Lyft and Postmates are among the household name employers driving both hyperlocal and international ecosystems in which jobs are doled out in bits and pieces (e.g. making deliveries, driving passengers or hosting guests).

The on-demand economy ushers in exciting challenges for recruitment professionals. Not only does it operate under a new set of hiring circumstances that, if navigated correctly, can work in favor of both employer and employee, but it also presents an opportunity for companies to gain competitive advantage through innovative recruitment strategies.

The challenges of recruiting for on-demand

Before diving into best practices for hiring in the on-demand economy, let’s look at the challenges involved. The unpredictable nature of work arrangements based on temporary gigs is not without its bottlenecks. The good news is that recruiters can circumvent these challenges with the right planning.

On-demand economies function only with the right balance of supply and demand. As demand (consumer interest) increases, supply (job seeker availability) must be able to match it. In this sense, marketplaces in the on-demand economy must be ‘liquid’ to function seamlessly. Unfortunately for many ‘Uber for X’ companies that have come and gone, the balance between supply and demand was never quite reached. This issue poses a challenge for recruiters: with aggressive growth goals within on-demand companies comes the the pressure to source enough applicants and recruit enough workers to keep up.

Competition is another area that must be addressed in the on-demand economy. With unemployment rates currently low, applicants and workers can afford to be extra choosy. It becomes the employing organization’s job to attract top talent and keep them happy.

Getting ahead in hiring for the on-demand economy

Developing a recruiting strategy in the on-demand economy can seem daunting at first, but a targeted approach can make a difference in both the volume and quality of hires made – as well as those hires’ loyalty over time (e.g. a driver giving rides exclusively via Uber for several years).

A successful recruitment strategy for the on-demand economy begins with examining the job market from a gig worker’s perspective. Hiring organizations should be sure to cater to the needs and desires of those who have chosen the route of diversified work.

Two areas that companies should pay close attention to include:

Offering competitive hiring packages

Companies in the on-demand economy should consistently strive to make applicants and workers happy. Without doing so, they run the risk of losing talent to the next company who was willing to offer benefits such as competitive base pay, bonus structures, legal setups or flexibility. Recruiters must keep employer branding in mind in every step of their recruitment process; for example, offering a $750 bonus to drivers who give 100 rides as part of rideshare recruitment marketing plan will be hard to pass up when compared to a pay structure without bonuses.

Using all available recruitment channels

The use of programmatic technology can place companies at the forefront of competition by allowing them to gain job ad visibility at the right times, in the right place and with little manual operation. In the competitive on-demand economy, companies cannot afford to waste resources on crawling through Craigslist or other gig advertisement platforms. The top recruiting companies in the gig economy already understand the importance of sourcing candidates with data-driven technology.

Bottomline: The on-demand economy requires companies to re-examine their recruitment strategies to make the most impactful hires.

The selectiveness of job seekers, coupled with the necessity for service supply to meet consumer demand, means that recruiters have a window of opportunity to excel in the on-demand economy.

Tailoring employer branding through enhanced benefit packages and exercising all options for candidate sourcing are two key best practices for on-demand employers. With the right strategy, on-demand companies can hire more efficiently, recruit quality workers successfully and ultimately stay afloat in a competitive environment.


Perengo is a programmatic recruitment platform.

High-growth businesses and Fortune 1000 companies use Perengo DSP to solve their recruitment challenges at scale. The platform provides tools for recruitment automation and business intelligence.

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