Question:
I’ve heard about new staffing apps, but it seems to me like I’d just be paying more. Do you have an opinion?
– Fast-Casual Owner/Operator, Philadelphia
Answer:
A recent addition to our gig economy has been staffing apps such as Pared, Jitjatjo, and Jobletics. These apps and others are often referred to as Uber for restaurant workers. While each has its own pitch and value proposition, they all work in roughly the same way:
- The agency interviews and vets a pool of qualified restaurant workers.
- Restaurateurs put out a call for staff in a particular position at a particular time (such as "Last-minute dishwasher needed tonight").
- Candidates are notified and can select an opportunity.
- Employers rate the employee (and sometimes employees rate the employer).
Typically employers pay via the app, with the company taking a cut of the hourly rate, assessing a per-shift fee, or some combination of the two. Fees, payroll taxes and other withholdings are deducted, and the employee gets paid.
Just as Uber is not a huge departure from taxis—just a more intuitive, user-friendly, cost-effective (at times), on-demand system—so too are these staffing apps not too different from temporary staffing agencies, which have been around for decades. Accordingly, most of the drawbacks of using temps—the need to train, the higher cost over hiring your own employees, and the uncertainty of not knowing whether the employee who enters your operation will match what was promised, apply to the apps as well. That said, by automating the process, the costs with these apps can be a bit more competitive; the rating system may help with choosing qualified candidates.
Overall, like using temporary staff in general, using the app can be great for some circumstances:
- Unexpected call-outs/no-shows.
- Emergencies such as inclement weather.
- Large events/peak periods.
- Filling in for vacation/sick leave.
It may also be a low-risk way to identify and try out new potential hires.
To your question, yes, you will likely pay more for staffing with an app than hiring directly. You may find some efficiencies in not needing to interview and vet the employee, not dealing with payroll or onboarding expenses, and, of course, being able to get someone working within hours of identifying your need. Overall, I think these staffing apps are another useful tool for an operator to use thoughtfully as needed, but like many technology tools, do not replace the solid fundamentals of having your core team in place.
More on staffing apps here.