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Understanding the on-demand economy

Understanding the on-demand economy

In the 20th century, most employees relied on–were even loyal to–a single company, working within a generally agreed-upon schedule in exchange for certain pay and benefits. With the full adoption of the internet close to two decades ago as well as a number of economic contributors, the economy has developed a specific silo that services on-demand needs.

Whether you call it the gig economy, freelancing, or a portfolio career, the on-demand business model is gaining steam thanks to skilled employees who desire more control over who they partner with, when and where they work, and what to specialize in.

While studies disagree on exact numbers, it’s clear that this on-demand economy is larger than ever before, with up to one-third of the U.S. labor force engaging in freelance work, whether as a side hustle or for a significant portion of earnings. In fact, economists Lawrence Katz and Alan Krueger estimate that, in the last decade, the amount of people who rely on the on-demand economy as their primary income source grew by 50 percent.

For companies, the on-demand business model might seem like just another trend. But, with customers expecting more from all companies and technology driving innovation, if you’re not prepared for working with new, on-demand talent, you’ll soon find yourself working within an outdated business model that hinders your company’s success.

What is the on-demand economy?

The on-demand business model is an alternative work economy to our traditional understanding of work. It includes any economy activity that fulfills a consumer demand immediately. On-demand businesses started in the services sector–think Uber and Grubhub. Today, goods are also available on-demand, with Amazon, grocery stores, and local retailers offering on demand delivery in urban and suburban areas.

This economy means that people may have multiple sources of income from a mix of traditional employers as well as freelance work. Labels such as full-time, self-employed, and independent contractor are going by the wayside as more people opt for a mix that works for their individual lifestyles.

A successful on-demand product must seem seamless to the consumer, but it does require an advanced understanding of the given industry. The supply side is usually driven by two pieces: the technology and the infrastructure. The technology, usually an app, should likely be efficient and easy to use. The infrastructure, though, is the network that actually supplies what the customer demands: endless content to watch, drivers in your neighborhood, and employees or robots ready to grab and package the requested items.

As the on-demand economy has become more sophisticated in the last decade, a new area is emerging: on-demand workers. No matter the industry, on-demand or remote workers are available for hire worldwide by companies who need expert assistance or last-minute help getting a product to deadline.

The talented workers you partner with will have various opinions on this on-demand business model, even down to what you call them: freelancer, self-employed, or remote worker; the gig economy or a portfolio career.

Benefits of working with on-demand talent

Working with on-demand talent is actually less about the freelancer and more about the talent you need. By engaging with expert intelligence exactly when you need it, you only pay for the work you’re getting. Plus, you don’t have to bog down top talent with other lower priority workplace requirements like HR compliance and long, arduous staff meetings.

Instead, bringing in experts in a subject can help companies reclaim time, rethink ideas, stay competitive, and even drive innovation.

So, who can take advantage of the on-demand economy? Companies of all sizes are partnering with developers on an ad-hoc basis.

  • Medium-size businesses can pull in top talent for a specific project. Perhaps you’re a Microsoft agency, but a top client of yours needs an Amazon-based solution. You don’t want to lose the client because you can’t close the skills gap, so hiring a project-specific developer with expertise in AWS means you can still provide the service your clients expect.
  • Smaller companies may not have the bandwidth to secure their own top developer talent on a full-time basis. Instead, when projects come down the pipeline, they can hire a developer or two as needed.
  • Lest we forget, projects on deadline benefit greatly with help from on-demand workers. The on-demand economy can be the difference between missing a deadline or making a successful project.

Success with on-demand talent

While some employers may be unsure about partnering with external workers, companies don’t have to give up anything to partner with workers available through the on-demand economy.

Hiring talent as-needed is becoming more feasible as the on-demand economy matures rapidly. Increasingly, global companies aren’t looking for low-cost freelancers but innovative individuals that can help solve value-driving business challenges. On the talent side, more workers across all industries are preferring to work on-demand and on their own terms, so the on-demand economy may be the only way to partner with such elite talent.

Getting started can seem overwhelming at first. Of course, hiring the first developer or writer or specialist you come across isn’t going to guarantee your project’s success. Instead, look for tools that help you accomplish this, such as hiring platforms that offer only top talent in their given field. (At DevReady, we connect you with elite, on-demand developers who are ready to get to work.)

Hiring talent as-needed is becoming more feasible as the on-demand economy matures rapidly. Increasingly, global companies aren’t looking for low-cost freelancers but innovative individuals that can help solve value-driving business challenges. On the talent side, more workers across all industries are preferring to work on-demand and on their own terms, so the on-demand economy may be the only way to partner with such elite talent.

The tools that connect to on-demand talent are only part of the solution. You’ll need to embrace a company culture that encourages on-demand workers, so hiring becomes systematic. The more you know about the talent you need–skills, expertise levels, budget, timeline–the quicker a new worker can join your team. Freeing up employee bandwidth means your employees, whether full-time or on-demand, are spending more time on the work they expected to do, which promotes satisfaction.

Support and big strides for on-demand workers

The on-demand economy doesn’t make you choose: traditional, full-time employment is not going anywhere for a significant sector of the economy. Still, cities are taking note of this changing economy. In 2018, New York City opened a Freelancers Hub that promotes on-demand work through networking, workshops, resources, and free (!) coworking space. The city also recently approved a “freelance isn’t free law” that grants freelancer and on-demand rights including right to contracts and right to fair and timely payment. We suspect more cities will embrace this new sector of the economy.