Can Gig Apps Help Reduce Labor Shortages?

The pandemic devastated businesses in all industries last year, leaving many unemployed. In fact, at the height of the pandemic more than 1.6 million Arizonans were collecting unemployment in June 2020. Now more than a year later, many businesses are fully open but are struggling to hire new employees despite companies offering incentives like sign-on bonuses and improved pay. This struggle has resulted in some businesses closing early, offering limited services or temporarily closing altogether. Can anything be done to reduce the labor shortages?

What’s Causing Labor Shortages?

There are a few different theories as to why businesses are having a difficult time finding employees. The initial shock of the pandemic led unemployed individuals to reconsider their jobs. Was there a more stable career out there that is less likely to be impacted in future crises? Additionally, a variety of surveys have found that many workers are seeking more flexibility after having worked remotely for weeks or even months during the pandemic. It’s also possible that unemployed individuals went on to create their own business. In fact, according to the Census Bureau, more than 4.3 million new business applications were submitted in 2020, up from 3.5 million in 2019.

Gig Apps Are Evolving

When gig apps like Uber, Lyft and InstaCart began to emerge, it allowed individuals to essentially become their own boss. They could decide when, where and how long they want to work, which provided an opportunity to create additional income during the pandemic. Now, new gig apps are emerging that still gives the individual the power to choose when they’d like to work but provide businesses with employees when they need them most. For example, the app Instawork connects businesses with hourly workers near them to help cover peak hour shifts at restaurants, provide an extra set of hands for a project and more. This allows businesses to fill the shifts they need to operate while continuing their search for full- or part-time employees.

Are Apps the Way of the Future?

It’s still too early to say if these short-term gig work apps are here to stay, but they do provide businesses the flexibility they need to weather the ongoing pandemic. Businesses like restaurants have especially felt the rapid increase and decrease in demand based off the rise and fall of COVID cases, and having the ability to bring on a person for their immediate needs is a huge benefit. While it may not be the ideal solution, it brings a new adaptability that’s never been seen before. Whether an employee unexpectedly quits or needs to quarantine due to COVID, businesses can now find a gig worker to fill the gap.

The pandemic has created many challenges for businesses and hiring is now one of the most difficult to overcome. As short-term hiring apps continue to grow, I believe more companies will adapt to the changing job market and take advantage of the flexibility this process provides.

Wayne Goshkarian is the director of communications for Scottsdale-based Association for Entrepreneurship USA, where he assists entrepreneurs nationwide with creating, establishing and expanding their businesses. In addition to AFEUSA, Goshkarian is the forward-thinking founder of Dylan Consulting and is known for bringing the slow changing insurance industry cutting-edge technology.