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Labor-For-Hire Company Struggling to Find Gig Workers Despite Hiking Wages

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  • Laborjack said it can’t find enough gig workers to meet soaring demand for its services.
  • The Colorado-based company boosted staff wages but said there’s huge competition for labor.
  • Clients are so desperate for labor that they’re no longer price-sensitive, its founders added.

A labor-for-hire company in Fort Collins, Colorado, says it’s missing out on huge chunks of revenue because it can’t find enough workers to take more jobs on.

Blake Craig and Josh Moser, founders of Laborjack, told Insider that more people had been applying to work at the company during 2021, but that it still wasn’t enough to meet the massive growth in demand for its services.

“Good help is hard to find,” Craig said. “And it’s even harder right now.”

Read more: These 9 food tech startups are capitalizing on the labor crunch with tools that help franchisees hire or automate the restaurant workforce

Laborjack staff doing landscaping work

Laborjack’s staff are mainly college students who do gig jobs in landscaping, moving, and general staffing.

Laborjack


Laborjack hires out labor to help with moving, landscaping, and general staffing — often to individuals who need extra help with projects.

“But right now, the bulk of our business is focused on helping other businesses that can’t get the staffing that they need,” Craig said. This includes delivery, brewing, and construction companies.

Around 80% of its workers are college students or recent graduates. But some of them have full-time jobs and use their gig work at Laborjack to supplement their income. During the pandemic, they’ve been working more hours at their main jobs and don’t need the side income anymore, Craig said.

In June, just over 200 workers completed a shift on Laborjack’s platform – but nearly a fifth of these only did one job.

This US is currently in the midst of a huge labor shortage that’s causing some businesses to cut operating hours, slash production, and raise prices. Joblist CEO Kevin Harrington told Insider that it’s primarily driven by people in entry-level, hourly-paid, and customer-facing jobs.

“Hiring had never been an issue for us until about February of this year,” Laborjack’s Craig said. “There’s a lot of other people going after the same talent that we are – not only new workers but also our existing workforce.”

“There are a lot of people fishing in a small pond,” he added.

The demand for Laborjack’s services roughly tripled over the past year, while the number of job applicants has increased by just a quarter, Craig said.

“We’re still struggling to keep up with the demand that’s coming in for the service we offer,” Moser said. 

This is despite Laborjack rolling out its biggest set of worker perks yet. This includes increasingly average payouts, made up of wages and on-job bonuses, to just over $26 an hour. The company is dishing out $75 hiring and referral bonuses if a new hire completes five jobs, too.

Businesses are ‘on the verge of desperation’

Laborjack has made its services more expensive to cover the higher wages. Moser said its clients had changed their pricing tolerance “drastically” over the past three months and were no longer price-sensitive.

“They just need to get people in the doors because otherwise their business will collapse,” Moser said. “They’re on the verge of desperation.”

Moser said that, for example, the event and trade show industry had rebounded massively with the reopening of the US economy. “They’re chomping at the bit for any amount of workers we can get them.”

Laborjack founders Blake Craig, Josh Moser

Laborjack’s founders say the tight labor market is holding them back.

Laborjack


Laborjack’s June revenue is up around 90% year-over-year, but “we could be growing more if there was more labor on the market,” Moser said. Laborjack is turning down jobs worth up to $2,500 each day and is struggling to balance its B2B and consumer sides, which are “both in full swing,” Moser said.

“Our margin has decreased despite the fact that we’re increasing prices, just because we’re trying to pay out all these bonuses,” Craig added.

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Maura Healey approves gig economy ballot question but fights idea in court

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“We better be able to walk and chew gum at the same time.”

Jessica Hill
Attorney General Maura Healey remains in a dichotomy after approving a ballot that would make gig economy workers independent, but continues to fight against Uber and Lyft in court to make drivers employees. Jessica Hill / AP

On Sept. 1, Attorney General Maura Healey gave the go-ahead to a ballot question that, if approved by voters, would maintain gig workers, such as Uber and Lyft drivers, as independent contractors.

At the same time, Healey and her office continue to spearhead a lawsuit against Uber and Lyft that accuses the rideshare companies of denying benefits to workers — whom she believes should be classified as employees, not contractors, under Massachusetts law.

On GBH’s Boston Public Radio segment “Meet the AG” Tuesday afternoon, host Jim Braude asked Healey to clarify the two simultaneous actions.

“We better be able to walk and chew gum at the same time,” Healey said. “Under the state constitution, there’s a process that allows regular folks to go ahead and get things on a ballot for a vote, and that happens every year … There may be litigation, there may not be litigation, but that’s just the hat that I wear as attorney general.”

Healey noted that her job is to review the ballot question’s language and to see whether or not it satisfies the legal requirements to make the ballot, regardless of her personal preference.

The ballot question garnered much attention in recent months as supporters — including a coalition of app-based businesses like Uber, Lyft, DoorDash and Instacart — argued that by keeping workers as independent contractors, the workers would be able to have more freedom with their job and set a minimum earnings guarantee. 

Opponents of the ballot question — like Healey — have said that it would continue to allow gig economy employers to provide less security for those who work for these companies. Throughout the pandemic, these companies have seen pushback from both gig economy workers and users on the treatment of employees. 

“As the economy grows, and work and the type of jobs change, there’s something they have to abide by,” Healey said. “We need to continue to treat workers fairly in this country, we need to make sure they’re not exploited.” 

Healey’s lawsuit, which was first announced in July 2020, asserts that rideshare drivers and similar workers should qualify as employees rather than independent contractors under Massachusetts Wage and Hour Laws.

In the lawsuit, Healey said her fair labor team determined that, under state law, gig workers should have access to minimum wage, earned sick time and other benefits and labor rights an employee would have. In March, the Suffolk Superior Court denied Uber and Lyft’s motion to dismiss Healey’s lawsuit. 

“Yes, gig workers and the gig economy are super convenient for all of us as consumers, right. There’s a price for that. And as we move forward with this gig economy, certain principles have got to abide. That’s why we have employment laws here in Massachusetts, and that’s why I’m in court against Uber and Lyft,” she said.



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This futuristic gig platform is owned by workers who keep 100% of earnings – The Hustle

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Five basic but essential steps to help take your side gig to the next level

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The pandemic isn’t crushing the entrepreneurial spirit. It’s fuelling it.

People normally tied to a desk or working double shifts used lockdown to launch side hustles, often out of necessity. And some have turned those side gigs into full-fledged businesses.

According to the U.S. Census Bureau, 427,842 new business applications were filed in August 2021 alone. That figure was 288, 026 in August 2019.

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While a side gig can be spontaneous, growing a legit business requires research, planning and organization. Otherwise, your fledgling enterprise could crash and burn in a couple of years.

These basic but essential steps can help you take things to the next level and give your new venture a shot at staying power.

CHOOSE A BUSINESS STRUCTURE

There are six common types of business entities: sole proprietorship, general partnership, limited partnership, C corporation, S corporation and limited liability company. The option you choose determines how your business is taxed, as well as who is financially responsible if your business is sued.

Entrepreneurs often default to sole proprietorship because it’s the easiest, but it’s also the riskiest, says Nellie Akalp, CEO and co-founder of corpnet.com, a document filing service that helps streamline the business formation process for entrepreneurs.

“There is no registration required nor are there corporate requirements,” Akalp says. But “there is no legal separation from the company, so the sole proprietor is personally responsible for any debts or liabilities.”

Registering as an LLC or corporation is more expensive and requires more paperwork, but it shields your personal assets from lawsuits.

OPEN A BUSINESS BANK ACCOUNT

Mixing business and personal finances can get messy, especially when it comes to filing taxes or securing a business loan. Open a business checking account to keep business income and expenses organized and easily accessible.

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Look for a business account that has low or no monthly fees and fits your business needs in terms of transaction and deposit limits.

A business credit card can also help you track expenses and identify tax deductions. Plus, you can earn rewards, like cash back on gas, office supplies and business consulting services.

UPGRADE YOUR BOOKKEEPING

No more manual spreadsheets or shoeboxes full of receipts; scale up to an accounting software that can do some of the heavy lifting for you, like tracking cash flow, managing invoices and generating reports.

Expect a learning curve with any new system, but know that it will help your operation run more smoothly. The right accounting software can also give you deeper insights into your business and help you identify weak points and opportunities to save money.

“Accounting is the language of business, so invest time and money into understanding how to do your books,” says Danetha Doe, founder of Money and Mimosas, a financial education platform for independent contractors, freelancers and small-business owners. “As a business owner, learning how to manage your company’s finances, read profit and loss statements, and understanding cash flows will make you a better entrepreneur.”

SPELL OUT YOUR BUSINESS PLAN

Your side hustle may have started organically, but turning it into a full-fledged business requires research and planning.

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Sketch out short – and long-term goals for your business, along with a sales plan, financial projections and potential roadblocks. Be realistic, set specific targets and spell out how you plan to reach them.

Building a business plan gives you a road map for how to grow your business. It also shows lenders you’ve done your homework should you need to secure a business loan.

Need help with your business plan? Turn to your local Small Business Development Center. These outposts are run by the U.S. Small Business Administration and offer free business consulting services.

INVEST IN PROFESSIONAL HELP

Entrepreneurs, by nature, wear many hats. But you don’t need to wear all the hats.

Outsourcing some aspects of your business frees you up to focus on other things, like customer service or product development.

Not hip to social media? Consider hiring someone to build and manage your business’s presence on Instagram, TikTok and the like.

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Do tax forms make your eyes cross? Invest in a certified public accountant to file for you.

“CPAs may be more expensive than doing taxes on your own, but it will be done right,” says John Pham, founder of The Money Ninja, a personal finance website. “Plus, they will maximize your tax deductions, which will most likely give you a higher return than the cost of a CPA.”

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

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