The Grocery Industry and the Gig Economy

Whether you’re a New York Times subscriber, a cable news watcher, or the type of guy who gets their
news from social media, you’ve heard the term gig economy.

Business reporters can’t get enough of this buzzy phrase, as it brings to mind an image of a
revolutionized workforce, one that hasn’t changed much since unions enforced 40-hour work weeks and
institutionalized weekends off. They’re enamored by the power it holds not only for America’s capitalist
society, but for job growth and new industries.

The inherent ramifications have spawned hundreds of think pieces and startups alike. The gig economy
is taking over – even if it seems to be through a self-fulfilling prophecy.

As a grocer and employer, it’s imperative that you understand just what a gig economy looks like, and,
even better, what it means for your grocery stores and your workforce.

What is the Gig Economy?

The gig economy is a phrase used to describe a workforce that operates with short contracts or
freelance work as opposed to holding permanent positions.

In a gig economy, instead of having consistent employees on your payroll, you would outsource the
responsibilities you need accomplished to a company that provides specialized laborers, or hire
independent contractors to complete work on a contract basis.

This is the direction that our current economy is headed in. Harvard Business Review reported that 150
million workers in North American and Western Europe are currently engaged as independent
contractors.

Even in the United States, the land of the American dream, the gig economy is exploding. It is estimated
that 34% of the workforce in the United States is part of the gig economy, and it is projected to include
43% of the workforce by the year 2020.

By this time next year, nearly half of the country’s workforce will be independently contracted.
In your head you might be thinking, well, the majority of those individuals probably work in fields that
make it simple to become an independent contractor: software development, design, copywriting,
skilled trades, etc.

However, the gig economy is not sequestered in one industry or specialization. It is affecting every
industry in our economy – even retail and grocery.

To examine the potential implications of a gig economy on the grocery industry, let’s first look at the
grocery industry workforce as it stands right now.

 

Current State of the Grocery Industry Workforce

Grocery, and retail in general, have an interesting dynamic when it comes to their employees, employing
both the youngest and oldest workers in the labor force.

⅓ of grocery store jobs are held by people between the ages of 16 and 24, a fact that hasn’t changed in
decades, when a job as a cashier or a stock boy was a rite of passage from childhood into adulthood.

However, the typical team at a grocery store is rounded out by more veteran employees, individuals
who have retired from their lifelong careers and are looking to make a bit of extra cash without a lot of
commitment.

That’s another key differentiator for grocery store jobs: they’re part-time for the most part. Individuals
who work in the corporate space hold full-time positions, but on-the-ground retail employees typically
work staggered hours, allowing for opportunities to pick up extra shifts, but resulting in inconsistent and
frustrating scheduling experiences. In addition, the part-time nature of a grocery store job means that
employers aren’t required to provide benefits for these sales associates.

Grocery industry workers who work the register, stock shelves, and conduct other administrative tasks
often aren’t required to have experience before they’re hired. This makes a grocery store job a perfect
entrance into the workforce, but it also means that many hours are spent training new employees on
processes and systems that they may otherwise be familiar with. It also means that grocery store jobs
are usually considered entry-level, a stepping stone in a larger career path. Retention rates are lackluster
in retail and grocery.

Finally, entry-level grocery industry positions often pay at, or just above, minimum wage. Because
employees aren’t full-time, and the jobs don’t require a lot of previous experience, employees expect to
be paid at a lower level, and employers expect to hire people who won’t negotiate their wages. Labor
costs are low for grocery store owners, and this has largely affected the way the grocery industry
workforce has developed over time.

Pros and Cons of Gig Economy

The gig economy has huge implications for workers and employers, both positive and negative. Though
we are already on the path toward a nationwide gig economy, it’s still important to know and
understand why this labor market came to be, and how it could benefit, or detract from, your business.

For Employees:

The gig economy has been largely driven by employers who are in search of a simpler, less-strings-
attached market, but employees have jumped in wholeheartedly. The major benefit for employees is
the freedom and independence that they can experience from a gig economy compared to a
permanent, 9-5 position. Opportunities to work for companies like Uber, Wag, Jyve, and TaskRabbit let
workers work on their own time, when it fits into their schedule. This independence is particularly
appealing for members of a generation in which entrepreneurship is highly valued.

However, the gig economy does have some shortcomings for workers. Though they are given the
freedom to choose how and when they work, and they aren’t beholden to rigid corporate rules, they
lose out on the benefits of that corporate structure. Risk is moved from the employer to the employee
in the gig economy. Independent contractors aren’t given the same benefits as a full-time employee,
and so they are on their own in the healthcare market and when it comes to retirement planning.

For Employers:

There are some clear reasons why employers are interested in moving a gig economy forward, and
many of them are based in simple business best practices. Employers want to keep their overhead costs
low, and the gig economy would do just that. Grocery stores traditionally have low margins, so reducing
labor costs and expenses associated with providing benefits to employees would be beneficial to their
bottom line.

However, employers need to be aware that with the good comes a bit of bad. Employers may not have
to hire full-time employees, or even part-time employees to their payroll through a gig economy, but
this means that they’ll likely have to deal with employees who are less focused and engaged with their
company. When outsourcing tasks to independent contractors or companies like Jyve, grocers lose out
on the important connection that their employees must have with their stores, values, and culture in
order to provide an optimal customer experience.

Jyve + the Grocery Gig Economy

When it comes to the gig economy, you’re probably familiar with companies like Uber and TaskRabbit,
but neither of them quite align with the grocery industry. Does that mean grocers are being left out of
this labor revolution? Not quite.

Jyve is the biggest purveyor of gig economy workers to the grocery industry, matching workers with a
specific set of skills to employers who are looking to fulfill positions that require those skills. Jyve
workers cover tasks like merchandising, backroom stocking, ordering, auditing, and even digital
shopping so that your store can run smoothly.

As the leader in the grocery gig economy space, it’s important for you to be familiar with the jobs that
are available to workers through Jyve, and to determine whether or not dipping your toe into the gig
economy in this way would be beneficial for your business.

How the Gig Economy Affects Grocery

Let’s get down to brass tax. How exactly does the growing gig economy affect the grocery industry?
What consequences and benefits will you see from this shift in the way we work in the United States?

Loss of workers

First and foremost, the gig economy could cause you to lose some of your prized part-time workers. Gig
economy workers fit into a similar demographic as your current team: they’re looking for flexibility,
don’t necessarily need to be paid large amounts of money in one go, and they may not have as much
experience as a traditional independent contractor or employee. You may find that your workers are
more interested in the flexibility that they could attain by becoming a part of the gig economy through
companies like Lyft, starting their own independent contractor business, completing handyman tasks in
their neighborhood, or even walking dogs.

Need to hire gig economy workers

As labor markets change and your customers start demanding a higher level of customer experience and
engagement, you may need to hire gig economy workers to keep up with the times. Perhaps you are a
small independent grocer who is unable to implement large-scale technological change because of cost
or manpower discrepancies. However, you know that grocery delivery and e-commerce are becoming
integral to the grocery business, and to remain competitive you need to get on board. Hiring workers
through the gig economy could be a cost-effective way to jump on the trend without undergoing a
massive reconstruction of your operational systems.

Shut-in economy

Finally, the gig economy is not only affecting the way we work, it’s affecting the way we shop.
Customers who are members of the gig economy (and it’s a growing number) don’t get out and about as
often as individuals who work in a corporate structure. They are more likely to order the things they
need online. Because of this behavior change, you’ll need to consider other ways to get in front of your
customers as a grocer – both in marketing and through grocery delivery.

The labor market is changing, even for the grocery industry. Are you prepared for the ramifications of
the gig economy?