The Business Case For On-Demand Labor

The service delivery dilemma

Service providers have been under intense pressure for years. Revenue and margins have been falling, while COGS and OpEx have been going up. Desperate for relief, service leaders turned down bids, said goodbye to unprofitable customers, and reduced their footprint in order to survive. And this was before COVID-19 came into the picture.

Win on cost or quality?

Even with these challenges, customer experience is still a non-negotiable. But how can businesses deliver great service at a cost that’s competitive? Historically, service leaders have had two choices: leverage subcontractors to solve for cost, or use W2s to solve for quality.

Subcontractors may help protect margins, but at the expense of visibility and control over who’s representing a company with their customer. Full-time employees may improve the ability to monitor outcomes, but they are extremely costly to employ, especially when they need to travel.

Building a modern workforce

For many years, top service leaders have used on-demand labor as part of a blended workforce strategy to optimize the labor type for the job’s required skills and location. The modern approach combines the coverage and variability of the subcontractor model with the technician selection, control, transparency, and management favored in the employee model. This approach gives companies more control over the quality of delivery while allowing them to reduce costs, typically by 30 to 40 percent over full-time workers.