The success of on-demand ride hailing app Uber in the recent years has facilitated the birth of the gig economy, where temporary, flexible jobs are common and businesses hire contractors to perform ad hoc tasks.
While companies used to hire more workers to get through peak periods, the gig economy model allows them to bring in additional temps when there is demand and cut costs.
That is what Helpster, a Thailand-based on-demand staffing platform, is doing – connecting companies with blue collar workers when they need extra hands. ecommerceIQ sat down with the startup’s CEO and co-founder Mathew Ward to talk about the ins and outs of his business.
Building a LinkedIn for blue collar workers
“There are still plenty of people looking for jobs and businesses who always need employees, but connectivity is the problem. If we talk with small business owners, finding and keeping staff is what keeps them up at night. People are always willing to pay for solutions to their pain points,” Mathew explains the business rationale behind Helpster.
Helpster was founded in October 2015 by Mathew and John Srivorakul, the CTO of the startup, as a platform that would connect customers with repair and cleaning service providers through its app.
It has now turned into a curated marketplace that matches blue collar workers seeking a job with businesses in industries with high demand for temporary staff such as restaurants, retail, and event management.
“The problem we found with the on-demand home services market is that there is limited frequency. When was the last time you called a plumber? The acquisition costs for consumers are high, and it takes too long to get that investment back,” says Mathew.
Realizing this, Helpster started pitching their platform to businesses instead. In the new business-to-business (B2B) model the team saw that companies needed not just handymen, but also waiters and warehouse workers. The real challenge was access to labor – how could they quickly hire blue collar workers?
Filling in temp jobs typically have two options – job boards or agencies. Job boards comprise of applicants of which 95% are not relevant for the business and majority of blue collar workers don’t have a resume or an email. “They don’t use traditional job boards – they generally find jobs through word-of-mouth, making it difficult for businesses to find them quickly,” explains Mathew.
Agencies are good at providing quality staff, but at a high cost, slow pace and workers usually come with constrictive contracts. If a business wanted to hire the worker after his/her temporary stint, the company would be subject to an agency fee.
So where does Helpster fit? The platform enables workers to create a simple profile listing their skills and previous experience, what they would like to do and how much they would like to earn. In a way, blue collar workers create their resume on the Helpster platform.
In the meantime, companies looking for hires send Helpster jobs requests and a description of their needs. The platform then matches job opportunities to available workers with the right skill set, and assigns them to the job in minutes.
Same, same, but different
At first, Helpster’s business seems similar to startups such as ServisHero or Kaodim that connect consumers with different home service providers – electricians, plumbers, movers and others – but how often are their services really needed in a year?
Helpster differentiates itself by focusing on businesses that frequently need temp staff, for example, the food and hospitality industry. Caterers, waiters and kitchen staff are always in demand for year-round engagements such as weddings, birthday parties, pop-up markets, etc.
Besides job requests from food & beverage and hospitality companies, promotional consultants who help staff pop-up booths in shopping malls or hand out flyers are another popular category of vacancies. Helpster also staffs telephone sales and warehouse operations.
“When we need extra waiters for catering events, I use Helpster to find them. It’s the only company I know that offers such a service and we use them quite regularly,” says Una Plaude, partner at Luka café in Bangkok.
Helpster started its operations in Thailand where the unemployment rate in 2016 was around 1%, making it no surprise that hiring and retaining staff were impacting business growth. The company also recently expanded into Jakarta, Indonesia because both countries contained businesses with 20-30% staff turnover.
Blue collar workers, on the other hand, usually earn around $10 a day and live hand to mouth. This makes having quick access to suitable jobs important because majority of them don’t have savings. Helpster works to turn their problems into one another’s solution.
But the company won’t be alone in its quest for long. Rocket Internet’s Ushift, recently launched a similar service in the on-demand staffing market in Singapore with ambitions to expand to other countries.
“If you have a good idea, there will always be competitors. I actually would be worried if there were none because that would mean nobody else thinks it’s a decent business. It shows opportunity if a company like Rocket is willing to enter this space,” says Mathew.
The company at present is offering its service for free, but will soon be introducing a subscription model by charging a flat monthly fee for businesses to access its worker network. While the fee has not yet been set, Mathew said it will be below other traditional recruitment channels such as job boards to remain competitive.
Dealing with uncontrollable factors
A good business idea doesn’t mean challenges aren’t involved.
The company is not simply selling apples and oranges, they are selling a service – the promise that an employee will show up and do their job diligently.
And this reveals a cold, hard reality.
“Businesses can do all the screening possible but if a worker can’t be bothered to get out of the bed because of the rain or traffic, there’s nothing they can do,” says Mathew.
Helpster tries to solve this by giving temporary workers a rating that increases with the number of jobs they take and complete satisfactorily through the app.
To ensure that businesses are sent qualified staff, Helpster curates the workers by doing background checks on those who register on the platform. “When we first started, we made everyone come in for face-to-face interviews and criminal background checks. But that doesn’t always give insights into someone’s reliability. Performance ratings and engagement data is a much better indicator,” explains Mathew.
Helpster also learned that the location of the job is very important for blue collar workers. They’ll be happy to work down the street if they can earn 350 – 400 baht ($10 – $11) a day but less likely to travel, buy lunch to work a job across the city for the same amount.
So, how does Helpster acquire its network of workers?
“We try everything. We obviously have a digital strategy, but it’s critical for us to have a good ground game. Get out to the market and meet the people. A lot of our acquisition strategy revolves actively targeting workers around their places of work,” Mathew reveals.
This strategy seems to be working. Over 80,000 workers and more than 3,000 companies have registered on the app so far and the company expects that number to grow considerably now they have launched in Jakarta.
Using data to make small changes for big impact
Helpster believes in using data to understand “what tweaks move the needle”. The company tracks which worker acquisition channels drive registration on the platform and if they lead to successful job applicants.
It was data that revealed that there can be such a thing as too many jobs on the platform.
Early on, Helpster was actively onboarding businesses to post their jobs on the platform, yet they noticed that a blue collar worker might take only 10 jobs a month even if he sees 100 job applications. They realized they needed to balance the supply of jobs with the actual demand from the workers to ensure a positive experience for businesses who needed temp staff quickly.
“Like any marketplace, balancing the levels of supply and demand are critical. Too much of one, and you will see high rates of churn. It can be a fine balance,” says Mathew.
Helpster can also forecast what parts of Bangkok on certain days will have high demand for a particular type of workers. For example, restaurants and bars in Sukhumvit road area look for extra hands during busy weekends.
Mathew says that 85% of the jobs are filled within 4 hours.
In November 2016, Helpster raised $2.1 million in Series A funding to expand across Southeast Asia. Now for three months, the startup has been present in Jakarta where 15,000 workers have signed up the platform. But the company is not planning to expand any more at the moment.
“Too many companies make the mistake of expanding too quickly. Blue collar worker wages in Southeast Asia make up around $200 billion per year, half of that is in sectors we’re focused on and 40% of workers are on informal employment contracts. Thailand and Indonesia are 60% of Southeast Asia so if we nail these two markets, we’re in a good position,” says Mathew.
He is not worried about the current downfall of certain on-demand startups seen globally since last year.
“I don’t think there is anything wrong with the idea to access things on demand. We’re focused on solving problems for businesses and for which they are willing to pay a premium,” says Mathew.