HOW TO LAUNCH A MARKET: Page not ready

The key challenge around launch of a market for hour-by-hour work in any region is finding the demand for labor that will start activity. Public agencies are big users of flexible labor and the easiest place to start. Community bodies and mid-size companies come next.

The Oversupply Issue

Organizations we work with typically have mailing lists, social media accounts and newsletters they use to announce initiatives. If a platform for personalized hours of quality employment is just announced like this, hundreds of work-seekers will quickly register, inputting their hours of availability and awaiting verification of their requested digital badges.

We have seen it in city after city. So many people want an alternative to terrible gig work apps or illegal, off-the-books, unprotected work. But businesses that use flexible labor will move more slowly, typically waiting for an unfamiliar market, and new pool of workers, to prove themselves.

So no-one gets work through the new channel. People who registered will become disillusioned and walk away. You then have no workers and can't meet any demand for labor that can be found. Gig work apps solve this problem with huge price subsidies to attract initial buyers. That cost can then be recouped with pay cuts and escalating "take rates" from workers' earnings.

Subsidies are unlikely to be an option for one of our launches. But a regional, horizontal (all types of work in one joined-up market) market can find the demand to start activity more cheaply.

The Art of Making a Market

A market making project involves identifying local users of nonstandard labor who have most to gain from early adoption of a new platform for the regional economy. We suggest a rough target of $20m of wages committed to go to local workers over the first 12 months of the market. That will keep around 800 workers engaged, with many proving reliability and adaptability. Their available hours then become increasingly attractive to local companies, agencies, organizations and households.

A lower figure can work, but $20m should be achievable in a region with 250,000 population or more. In some cases it can be found quickly, possibly from one source. A more likely process starts with roundtables, online or in person, for local business, charitable, government and educational leaders.

By outlining the possibilities for a new regional labor market, sharing learning, perhaps showing a market from another region in action, we aim to identify leaders who see immediate benefits for their organization. That may be in growing a business, staffing up for peaks, coping with churn/absenteeism, sourcing new workers, retention of people unhappy with shift rotas, using flexible workers as candidates for jobs, cutting temp agency costs, scheduling work experience, or dozens of other reasons.

These local stakeholders become a catalyst for further research. We seek introductions to others who didn't attend a roundtable. At each step, the aim is understanding scale, times of need, capabilities required, to what extent there are existing workers who might come across and what it would take to attract this demand to a new market.

So a hotel manager might tell us "I have banquets or weddings typically on two lunchtimes a week, I need 25 waitstaff each time who must have ServSafe certification, commit to arrive in black and white attire, and have completed my hotel's 45-minute induction. I pay $21.20 an hour for a typically 3 hour shift and have a core of 10 temps I already like to use from the Acme Staffing Agency. If the regional platform can match the costs, keep my existing 10 workers and source others, I will come across."

As we build a patchwork of needs like this, market activity can be modelled on a spreadsheet. Only when it is clear there is sufficient demand, access to aligned work-seekers, and ready labor market intermediaries if required, do we offer a timetable for launch.

Where to Find Initial Demand

Direct approaches to the largest individual users of flexible labor locally - distribution hubs, retailers, security/janitorial outsourcers, fast-food outlets and the like - probably won't work. Those big companies will run one-sided employee scheduling systems that can drive down labor costs and keep pools of staff on-tap. Why would they move their demand into a platform that will open each worker to other sources of employment, additional skills and everything needed to start progressing to higher hourly pay?

Efficient market making involves finding users of nonstandard labor who have motivations beyond deploying their own lower-skilled staff as cost-effectively as possible. Our usual priorities for engagement in any region, in order, are:

Public agencies: A city with 250,000 population could spend $4-5m a year on summer labor in the parks; stewarding, cleaning up, running events, landscaping, doing public outreach. Typically, managers will have a spreadsheet of people who get called every April then told the schedule available for July/August. Beautification crews, events workers, street wardens and tourism ambassadors are other budgets like this to seek out in city hall.
Public-sector-adjacent: We hope to engage managers at local stadiums, convention centers, airports, housing bodies and other entities likely to see benefit from growing a pool of very localized workers in a market which advances and motivates.
Community service providers: Promotores, interpreters and support workers are the kind of roles where responsiveness, rather than 9-to-5 schedules, are best for service users. Allowing each worker to control their own scheduling can increase responsiveness to service users' needs.
Colleges: Like housing bodies, which seek work for their residents but also need receptionists, inventory takers, groundskeepers, janitors and other roles, community colleges or universities have both a source of workers (students) and work that needs to be done. An employment department may see value in using her college's staffing needs to let students prove themselves, then marketing students' to businesses, particularly where activity relates to the course being studied.
Mid-size businesses: Genuinely local businesses offering senior care, childcare, building, transport, leafleting, hospitality or events are typically too small to benefit from aggressive monopsony workforce scheduling systems. They can see benefit in growing a pool of approved workers within a wider market where each person can leverage a track record of reliability to get extra hours.

Bringing this diverse demand into a new market doesn't require any changes to existing pools of workers, employment contracts or conditions. We are just adding options for all concerned. Take the summer parks workers. The platform allows their reliability and achievements to be verifiably captured (through a "City Parks Inducted" badge perhaps). The market then gets to work finding them opportunities from September on, for landscaping businesses or building companies maybe. It's up to each person.

Tips for Market Making

As veterans of this process, happy to advise anyone doing it for the first time, we offer some key lessons on market making:

Look for projects: The easiest wins can be from sudden influxes of need for labor rather than recurring demand. A budget to clean up local beaches, a program to scan piles of documents, refitting a public building, a traffic count or wildlife census, weatherization. Get a project like one of these on-board and it can complete your market making in one go!
Integrate regularity: Don't focus just on short-notice or short-length periods of work. A market for hour-by-hour labor can handle semi-regularity or regular periods of work just as easily. If a business has 5 full-timers, 10 part-time workers and periodic need for top-up staff, it can all be handled within the market. Administration tools like timesheets, budget management or in-app clock-ins are useful even for workers who have predictable hours.
Think badges: What attributes (not just conventional skills or certification) might any buyer of labor need locally? Would a badge identifying workers happy to ride a bicycle help a courier firm? You can create it in minutes. Or perhaps a badge showing a criminal records check had been completed successfully? Any badge can be hidden from general view.
Seek aggregators: Some demand is too diverse to be economical to track down. Small businesses are an example. But if an umbrella body, perhaps a Chamber of Commerce, that already has relationships will help, it can become viable. If a Chamber will convene members to hear your pitch, perhaps organize a panel to explore options and recommendations, you could gain wide-ranging demand from a few meetings.
Look for micro-roles: Quality flexible work in sectors like care or building often requires deep trust between the parties. A family with budget for childcare for example might have unique needs because of their son's disability. A role with set payrate, capturing all the badges that must be up to date, and what the worker(s) must agree to can be specific to the boy. If there is then only one worker who the family will accept it's no problem. Ongoing work relationships are good for the market.

Aligning the Initial Workers

As your spreadsheet of commitments to use the regional platform builds, it is time to start looking for the workers that will be needed during a first year of operation. Some of your buyers will be bringing existing pools of part-timers into the market, but you will likely also be able to open the platform to other work-seekers, confident they will get booked at times they want to work.

In the early stages, your market will need a bit of handholding to ensure your pool of workers meets the needs of your first-wave buyers. Do they have the right abilities? Want work at the times of demand each day? Live within travelable distance of the demand? Once you have a sense of what your early buyers of labor require, it's time to engage worker groups, community organizations, possibly job centers, and other channels to the supply side.

As your market develops, it will produce data that allows demand and supply to align by themselves. But in its fragile early days it may be worth considering:

On-boarding processes: We worked with one school district that was short 300 lunchtime supervisors and nutrition workers. The city's market offered a "I have informal childcare experience" badge which generated a pool of adults clearly ready for the formal vetting allowing them to do non-teaching work in a school. But the district had a 6-month process to take on any new worker that had caused their shortage. A granular new labor market can fast-track some administrative steps if an organization is willing.
Group trainings: Paying for basic skills inductions may be a good investment if budget is available. Perhaps you have a community partner with 80 work-seekers who have retail experience. Paying to put them through basic food handling training might cost $50 each, but it then creates a pool of people experienced in customer-facing roles, ready to work in restaurants if that is where you are picking up demand.
Meet-the-client sessions: Workers can be cautious about an unfamiliar sector, some companies have low expectations of ad hoc staff. To foster market activity it can be worth organizing a get together where, for example, a local manufacturer invites 25 of your first-wave workers to a tour of their facility. A manager could explain what working there involves. Some of the workers might share their experience, and what circumstances caused them to seek employment outside a job. Willing attendees could then be badged, creating an immediate pool of people comfortable with the company, where a manager already knew some workers.

You should now have demand and workers ready to fill it. Testing the economics is a final step. For example, if a local theme park wants a pool of top-up ticket sellers, but does not want to be their employer-of-record, and is used to paying $20 an hour including overheads for workers accustomed to $15 an hour, a local intermediary - an employment charity perhaps - needs to be willing to meet employer-of-record obligations for $5 an hour.

Dialogue with a range of potential intermediaries will identify the ones who already have the scale and experience to match the charges of temp agencies.

Once this all makes sense, you are ready to unleash your market. Good timing can help. For example, tourism and leisure work peaks in the summer in most regions. Catering and hospitality surges pre-Christmas. A major event, or other regional peak in need for labor, can also be good opportunities to launch just ahead of increasing demand for workers.

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