October 12, 2023

Warehouses Seeks More Gig Workers in the US

Warehouses are fast embracing the gig economy. Other players in the global supply chain have increased their preference for gig workers which has in turn taken a toll on logistics operators and warehouses who still adopt the traditional work model. With the labor force going down, there is increased competition for workers, and logistics companies feel to be on the losing side. Hence the adoption of the gig economy into the system. 

Logistics operators/warehouses have decided to offer more flexible working hours to workers. This is a model greatly imbibed by companies such as Shipt, Uber Technologies, Care.com, Instacart, etc. This is a bid to meet up with the competition in the labor force and maximize the available personnel. 

What The Gig Economy Looks Like 

It’s safe to see this system as one with immense worker flexibility. Workers set their availability and shifts are allocated based on the availability. This has resulted in more freelance or independent contractor activity. It is focused on part-time positions, hence winding down the glamour of full-time positions. 

As of 2021, experts claim that a third of the US population belongs to the gig economic system. The COVID-19 Pandemic was a major boost for the gig economy. It was originally a quick response or fix to the pandemic effect with technology and digitization being significant triggers. The gig economy continues to be on the rise as employees are enjoying the flexibility it brings.

It is predicted that 60% of the American workforce will be independent in 2027. Also, the number of gig workers tipped to reach 86.5 million by 2027. Experts also predict that 80% of large organizations in the US will depend more on gig workers than traditional work models in the few years to come.

Coming down to the logistics space, gig workers have risen by 21% compared to the 15% in 2021. Experts predict more growth as current logistics workers buy the idea of the gig economy and are willing to explore the model. 

The Gig Economy Works A Bit Differently in the Logistics Space

On a general scale, especially outside the logistics industry and some other technical spaces, gig workers can fill in several positions immediately. According to Hisham Khaki, the founder of Alpharetta, “It actually takes someone who understands warehousing to operate a forklift”. His idea is that logistics companies and warehouses cannot hire gig workers via the same procedures as other organizations such as Uber, etc. 

One of the reasons for the disparity in procedure is that logistics gig workers must be trained and capable of warehousing operations for which they are to be assigned. “You can’t just have someone who lists themselves as a warehouse worker go into a facility” – Hisham Khaki.

HapiGig, an employment agency for warehouse workers located in Georgia is an ideal illustration of Hisham Khahi’s point of view. The available personnel looking to be gig workers go through training and the employer can track their performance before offering them the part-time job. 

Some Effects of the Gig Economy on Warehouses

Oftentimes, the effects of the gig economy are analyzed from the worker's point of view. However, it has an effect on employers. This route which logistics companies and warehouses are taking by storm could bring in several benefits. 

The gig economy triggers lower labor costs. It eliminates the high volume of full-time workers and offers wage flexibility as gig workers tend to receive lower pay compared to full-time staff. The cost of hiring and training full-time employees is also reduced. 

With the gig economy, there is no need for employers to pay health insurance to workers. There is no form of medical payment but employers can put the money back into the warehousing operations. Gig workers as of now are not qualified for 401(k) benefits. This can save employers huge sums of money per year. 

Hiring gig workers is a perfect solution for the sick leave issue. In a case where a worker has to take a sick leave, a part-time worker can easily step in to fill the position at a lower rate. This also solves the issue of seasonal employment as warehouse managers can boycott the cost of using emergency employment agencies. 

The adoption of gig workers gives logistics operators the flexibility to scale. They can easily increase the labor force with lower costs. This is especially perfect for small-scale or startup warehouses.

The gig economy beings a balance between employers and employees. Employees have more control over their work-life which can result in increased productivity. 

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