Articles & Notes

Disappointment On-Demand: Arguing for Worker-Centric Payments

TL;DRWhile customers continue to sing the on-demand economy’s praises, workers are struggling to adjust to this new world of self-directed work. Chantielle discusses the benefits of implementing a more worker-centric approach to earnings distributions—one that aligns payout choice and funds management with individual motivations and goals—as a proven way to educate and assist a growing workforce.

Amazon, Zappos, Starbucks… when it comes to service and user experience, these companies are pioneers of customer-centric operations. From the earliest stages of brand awareness, through the buying decision, and long after the sale has been finalized, these organizations put their customers’ needs and desires at the very core of their business, and for good reason. According to an often cited report by Deloitte and Touche, customer centric companies are 60% more profitable and two times as likely to exceed return on shareholder equity compared with their less customer-centric counterparts.

Before you can have happy customers, you need to have engaged workers. #ondemandeconomy Click To Tweet

Which is all well and good if you’re running a traditional linear business model, where value is created only to be consumed by the paying customer. But in a platform-driven economy, where companies rely on a cyclical value exchange between workers and consumers, companies need to invest just as much time and effort into their relationship with their workers as they do their customers if they hope to build a sustainable, long-term business. Before you can have happy shareholders, you need to have happy customers. But, more importantly, before you can have happy customers, you need to have happy and engaged workers.

When You Work for Yourself and Your Boss is Underqualified

According to last year’s study of the on-demand workforce, many independent contractors are having difficulties adjusting to independent work. “Startups like Uber, Lyft, and TaskRabbit promise they can offer higher wages per hour while letting contractors work whenever they want,” explained Davey Alba in an article posted to Wired’s website last year. “They hold out the hope of a bright, flexible future in which you are the micro-entrepreneur—a startup of one. And folks tend to believe them. Until they actually start doing the jobs.”

Being your own boss is a bit of a double-edged sword. On one hand, you’re in charge of your schedule and income earning potential. On the other hand… well, you’re in charge of your schedule and income earning potential. Your livelihood is your responsibility, and yours alone. It’s a scary reality, and one that can really impede an individual’s ability to succeed when they’re ill-equipped to manage the financial and operational requirements of a personal enterprise. In fact, according to last year’s report, the likelihood of contract workers leaving an on-demand company is directly tied to their earnings. Focusing on the integration of earnings-focused infrastructure (remember our pipes and tools discussion from last week?) in order to create a more robust worker -centric experience is thus a no-brainer. Failure to do so could cause your workers to struggle to generate and manage their earnings, and might ultimately lead them to abandon your platform.

The Next Frontier of Digital Marketplace Design

Michael Ting, our own Senior Vice President of Digital Markets, is an advocate for worker-centric design. In a recent interview taped at the Collaborative Economy Conference in San Francisco, Ting noted that, up until now, most platforms have put their emphasis on how to collect payment for a purchase, as “that’s typically their source of revenue.” He insists, however, that a shift is occurring as “more and more platforms are putting emphasis on the pay-out,” thanks to the realization that a worker-centric approach is a way to hook and drive platform loyalty.

'Workers are going to gravitate towards the #ondemandplatform that gets them paid.' - @tingmichael Click To Tweet

Michael Ting, SVP Digital Markets

“Most of these people come onto these platforms for a single purpose: that is to make money,” said Ting. “They’re naturally going to gravitate towards the one—and promote the one—that gets them paid most easily and most conveniently.”

Thing is, the process of paying people is a difficult one. As Ting noted in this post on payment issues, early on-demand incumbents have had to struggle to integrate legacy financial infrastructure (correspondent banks, clearing networks, ambiguous regulations, etc.) into their platforms in order to issue payments to their growing workforce. Unfortunately, the resulting solution is far from seamless; this is because the worker is often pigeon-holed into a single, inconvenient payout option. If multiple payout options are somehow cobbled together, the worker will rarely have a unified interface in place to help with the cost-efficient transfer, tracking, and management of these funds.

The integration of a new, worker-centric approach to earnings distribution—one that aligns payout choice and funds management with individual motivations and goals—is what your workforce wants and what on-demand economy companies need in order to avoid a disappointing worker experience.

 

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