The American workforce has moved significantly beyond what Dolly Parton was familiar with.
Instead of a set 40-hour, “9 to 5” work week, we have flextime, gig work, and digital nomads. Technology has allowed us to work at all hours and days—and maybe has us working too much.
But even with those changes, many aspects of how human resources departments interact with employees remain the same. Two Texas startups are attempting to use artificial intelligence and other software innovations to transform the HR department.
“We are disrupting the 1099 contractor ecosystem,” says Craig Lewis, founder of Gig Wage, which sells payments software aimed at helping companies manage and compensate contract workers. “We’ve all been contractors at some time in our careers and dealt with the headache of being paid.”
Four-year-old Gig Wage’s client roster includes gig economy businesses that provide food delivery and on-demand babysitting services, for example. But Gig Wage also helps customers pay professionals such as insurance inspectors and adjusters, Lewis says. The startup’s software enables contractors to make payments to freelancers, and it also gives those workers a financial portal they can use to track payments.
Having a central place for documentation is attractive to workers because it provides the sort of corporate salary history that can be required when seeking loans, Lewis says. “Banks require proof of income and a lot of gig workers have a hard time with that,” he says. “They can print a contractor report to show how much they’ve been paid, the frequency of when they get paid, the industries they are working in.”
Features beyond payment processing give Dallas-based Gig Wage an advantage over other tech-enabled tools such as PayPal or Venmo, Lewis argues. As gig work becomes more common, contractors will cite the compensation method as a factor in deciding who to work for, he says.
To help pay for further technology development, Gig Wage announced last week that it raised $1 million of a planned $2 million funding round. Revolution’s Rise of the Rest Fund, founded by Steve Case, is one of the participating investors.
Gig Wage charges businesses $10 a month, a $1 fee for each direct deposit processed, and $5 for each 1099 form at year end.
The startup seems to have hit on a ripe opportunity. By 2020, nearly half of the U.S. workforce will be independent contractors, according to according to Pymnts.com. Digital marketplaces make it easy to match gig workers with employers, which are increasingly turning to freelance arrangements with employees for maximum flexibility.
That means companies will need to more effectively grapple with managing what will become an even larger portion of their workforces, Lewis says.
These workers are increasingly being paid by apps and other technologies. A majority of gig workers are paid via cash or check, but more than a third are being paid through apps like PayPal, according to Pymnts.com’s August 2018 Gig Economy Index. The number of tech-enabled payments is growing, the index shows.
Maylin Siler, who’s spent about 20 years working in HR departments, says hiring in the trades and the manufacturing sector could also use a jolt. “The number one way of hiring blue collar workers is word of mouth and referrals, or physically going to Home Depot,” she says.
That’s why she founded Crew Collar, a Houston startup that is working on using artificial intelligence in lieu of resumes, a document, she claims most blue-collar workers don’t have. (For now, Crew Collar is focusing on full-time employees though Siler says the technology could be used for one-off, project-based hires.)
Automating blue collar staffing is a growing field. FactoryFix is a Chicago-based startup with software to connect companies with maintenance technicians and other tradesworkers. The startup focuses mostly on short-term staffing needs but says those temporary assignments can lead to fulltime jobs.
At the Houston-based Crew Collar, tradespeople—welders, landscapers, electricians, and the like—upload images of their work. Siler says experts in each field analyze and rank the images, which gives information to the algorithm to begin to analyze the information in the images on its own.
“So, when an employer says, ‘I need an experienced welder,’ the person who’s attached to the that image will come to the top,” Siler says.
Crew Collar charges employers a $297 monthly fee to hire one position. Still, it’s early days for startup. Developing a more sophisticated algorithm will take time, Siler says. In addition to modernizing the hiring process for these workers, Siler says the startup’s technology can help to avoid implicit bias that can lead to discrimination among candidates.
“A lot of hiring managers make off-the-cuff decisions, and mistake attractiveness with intelligence or likeability with aptitude,” she says. “In the day of Instagram and Tinder, and because skill trades are so demonstrative in nature, we need to leverage the imaging of work product to provide more value than a written resume.”