Wonolo: What The Labor Shortage Is Teaching Us With Monica Plaza

Music:  00:00

This is RecruitingDaily’s Recruiting Live Podcast, where we look at the strategies behind the world’s best talent acquisition teams. We talk recruiting, sourcing, and talent acquisition. Each week we take one over-complicated topic and break it down so that your three-year-old can understand it. Make sense. Are you ready to take your game to the next level? You’re at the right spot. You’re now entering the mind of a hustler. Here’s your host, William Tincup.

William:  00:33

Ladies and gentlemen, this is William Tincup and you are listening to the RecruitingDaily Podcast. Today, we have Monica on from Wonolo and we actually are going to be talking about what the labor shortage is teaching us. So it’s going to be a fun topic. Can’t wait to actually get to know Monica and the company. And so Monica, would you do us a favor, introduce both to yourself and Wonolo.

Monica:  00:56

Happy to, and thanks so much for having me. My name’s Monica Plaza. I’m the Vice President of Strategy at Wonolo. Wonolo stands for work now locally, and we’re the leading technology platform aiming to disrupt the temporary staffing industry. We’re an app-based platform that was founded in 2014. And over the years, we’ve helped over a million workers connect with frontline, hourly job opportunities in the contingent gig economy through this mobile app. We work with such customers as Uniqlo, Aramark, Coca-Cola. Customers in different job categories of all shapes and sizes who need workers, need them quickly and need them at the ready. In my role as Vice President of Strategy, I basically help Wonolo to think big picture, both in terms of our operations, our internal operating rhythm, and also future areas of opportunity and investments. And prior to my time at Wonolo, I worked at Google for over a decade. So I’ve been in the tech space for a bit.

William:  01:58

Love it. So from your perspective, which is a wonderful vantage point, what is the labor shortage teaching us?

Monica:  02:07

Well, it’s teaching us quite a bit and actually, it’s a pretty interesting time to be in staffing, as you can imagine. And due to our flexible model that we’ve always been in, I believe we’re seeing more or less the other side of the coin from what I think are the traditional full-time employers are experiencing and learning. The trends that we’re seeing and the signals that we’re seeing is basically that workers really want to work. It’s just, they want something different than what traditional employment has historically offered. I don’t think it’s as simple as a lot of folks may say unemployment payments, et cetera. It’s really a reassessment of what people desire.

Monica:  02:47

Actually, we’ve seen this trend building for years, but this is a unique time of uncertainty and perspective that I think has been the catalyst of… There’s a growing sentiment of designing something different, design something more. To get more specific, I think, what we’re seeing is that workers have more power than ever, and they’re looking to have more autonomy to choose and more flexibility to live their lives beyond just what they do for a living and how they earn their money. And the way we work is that workers have the power to pick up shifts. It’s not a full-time assignment type of model. And we’re seeing that that’s really resonating with what workers are looking for in this current labor-shortage quote-unquote environment.

William:  03:35

So, first of all, I love the app. I love the flexibility. I love the ability for someone to turn it on, turn it off, do whatever they want. Work when and how they want, which ultimately I think does seep over into corporate America in a way from some of the things that you say. It’s just going to probably take a little bit longer. You said we are already on this trajectory, anyhow. COVID probably sped some things up, but I think probably a basic question that folks would ask is how did we get to this shortage? How did it happen? Is it just through the years? It’s just building, I think we topped 10 million open jobs. Is that right?

Monica:  04:21

Yes. Something along those lines, yeah.

William:  04:23

We’re close, right? I think people will probably wonder, how did we get here?

Monica:  04:29

Yeah, it’s a great question. And I think there’s a lot of research happening now trying to sort that out. And like I said, I think a lot of the overly simplistic explanations, maybe aren’t really hitting the mark. I think you can see this outside of even labor, but just the generational changes of what work looks like and what people want from their workplace has been evident for years, decades, really. I mean, the era of working at the same company for 40 years until you retired doing the 9:00 to 5:00 coming home to home-cooked meal, it’s just not the way things are anymore. And the demands on individuals, whether it be childcare or other obligations. Taking care of folks at home, or even simply the need or desire to work more than one place, that has definitely been contributing as well as the desire to uplevel and upskill.

Monica:  05:29

And I think we work in the more blue-collar, low-skill categories, and there’s definitely a desire to be entrepreneurial, grow your skill set, try new things, and not be tied down to the same work all the time. And I think to call it a labor shortage is accurate in that it’s hard to find workers, but when you dig below the surface, it’s really about changing expectations, changing desires, changing environment and context, the rise of the gig economy that actually tapped into this change in desires and really the changing home life in terms of having other obligations as well.

William:  06:11

So from the company’s perspective, when you look at talent in this way, how do they win? What do they need to do? And obviously communications, and flexibility, and adaptability, and all this other stuff, but when you get to interact with customers in kind of a right interesting way, what’s your advice to them so that… They want to win no matter what it is. They want to win. So what’s your best advice for them?

Monica:  06:44

Absolutely. Great question. And yet we want them to win, right? We work with our customers day in and day out consulting on this very question. What do we do? How do we respond? How do we change our former practices? And there’s a few things I would recommend. So the first is what we’re talking about here, is just rethink how work works. Start exploring different types of employment. Sure, you’re always going to have your full-time workforce, but with churn rates that we’ve seen at various warehouse environments, at quick-service restaurants, and different types of environments, that you can’t just continue to rely fully on your full-time employment. It’s just not realistic any longer with the churn rates we’ve seen. So exploring different types of employment, how do you change the way scheduling and shifts work?

Monica:  07:34

How do we bring in contingent work workers? How do you add flexibility to even those who are full-time to better respond to the changing desires and the changing needs, as I said? So that’s one just high-level way. And then, in addition, I mentioned how home context is changing. And the category of parents that work is really an interesting one, especially over this time of COVID with kids who were out of school, there were growing obligations at home. Parents want to work as well and sometimes there’s some limitations. And so thinking about the parent community within your workforce, offering flexible work arrangements, thinking about childcare, whether it be stipends or other arrangements, we see that parents tend to work weekend shifts or nighttime shifts to be able to earn while not having conflict with their childcare obligations during the day.

Monica:  08:30

Other things I would recommend is considering new talent pools. One example, there is those who were formerly incarcerated. We actually have a program here at Wonolo called Path Forward, that helps those who traditionally not pass the pretty standard background check that I think a lot of companies have just fallen into practice of using, help them get back to work and give a little bit more of a voice to those who want to reenter the workforce and have trouble because of some of the standard onboarding processes. Couple other ones, being creative with benefits. Even though we’re a gig economy workplace, we have partners that we work with, like PerkSpot and Keeper Tax and others that add to not just earning money on our platform, but getting financial advice, getting discounts, and sort of adding to the rest of their life.

Monica:  09:24

And then finally and most importantly is, think about the wage you’re paying. There’s a big minimum wage debate that has been happening in the administration for years. And the way we think about it is thinking about it from the living-wage perspective. What is the livable wage for workers in that local region? We’ve been partnering with MIT who has a living-wage calculator and does a lot of research on the topic to really try to understand and incorporate into our business, how we can influence our customers to pay more and pay closer to a livable wage and a living wage, to encourage folks to accept those jobs and to stay because the quality of life is there. So those are just a few things that I would recommend.

William:  10:14

It’s interesting because it’s a power shift, right?

Monica:  10:17

Absolutely.

William:  10:17

So candidate-driven market at the end of ’19, beginning of ’20, and all of a sudden, for a brief moment, we were an employer-driven market, especially on the corporate side. Maybe not as much on the hourly side. And then all of a sudden, we’re back to being full-on candidate market. What is your take on a couple of things, one is the concept of ghosting? And I was talking to a staffing, a leader, the other day. And he was just like, “William…” And they deal with restaurants. So he’s real myopic for just restaurants. And he said, “Listen, as a recruiter, you make the offer. You find somebody, you make them an offer. They say, yes. 50% of those folks show up for the first day. And second day, 33% of those people show up.”

William:  11:11

And you did everything that you would have normally done two years ago. It’s just there’s no… It’s not loyalty. That’s the wrong word. If they find something better or if there is something better, then there’s no issue with just saying, “Yeah, done move to the next thing, which again for us as HR and TA, we have to recognize that’s changed. The ground beneath us has shifted, and we either adapt and deal with that. And I love the way you hooked it back to wage, because again, a way another way to ensure people showing up, it’s just paying them more. That would help. But what are y’all finding when you look at your data and you look at your customers and look at the rates of people that say yes, and then don’t show up, et cetera?

Monica:  12:14

I think it’s a great question and very relevant and definitely something we see as well. I think you’d be hard-pressed to find anybody working in staffing that doesn’t have a no-call, no-show kind of situation that occurs from time to time. But I do think there’s a lot of lessons in that, that relate to what we’ve been talking about. There’s always going to be a few people that maybe never intended to show up, but that’s the minority. What really it comes down to is a lot of the same things that we’ve been discussing about the power dynamic. Historically, for better or for worse, and I think everyone’s well-intentioned. You needed to do whatever you needed to do to go show up at your job and get a paycheck.

Monica:  12:58

And if you weren’t treated well, if the environment was uncomfortable, if the pay was below what you even needed to live. Maybe your options weren’t great. Even though you were maybe unhappy at this job, maybe you didn’t feel like it was fulfilling you in what your need or building your skills or whatever it is that you desired. You really didn’t have maybe as many options. That has changed, and I think employers would benefit from recognizing that change. People have options, first and foremost, as we can see there’s lots of jobs and fewer people to fill them. So the highest paying or the best environment, or those with the best perks and benefits are those with… I mean, even as simple as respectful supervisory staff or in our case the people that those who work with the contingent workforce. All of these things matter.

Monica:  13:54

And they always have, it’s just that the options are different. And beyond even options as we’ve talked about earlier, the perspective is different. I deserve more, I want more. I always deserved more and I always wanted more, but I feel empowered now to actually demand it. So when you think about the way things were two years ago as you said, they’re just not that way anymore. And so taking a hard look at the local living wage is really a great place to start for any business. Are you paying what it takes to live a decent life and pay for the bare minimum goods it takes to live that life?

Monica:  14:36

If not, think hard about how you can plan to get there and think about what that takes. What is the environment that folks are showing up to? So in terms of ghosting on day two, you mentioned 33% come back the second day. Those are folks who came and tried and thought and experienced, and they didn’t come back. So that’s an even different version of ghosting then the no-shows on the first day. Maybe they’ve found something different. So it’s really taking a hard look at, from start to finish, the experience that workers are having and thinking about elements of where you could optimize and really improve the experience.

William:  15:16

It’s really interesting because again, these are things that should have always been there. So respect and treating people nicely and paying them well. This is foreign to anyone. It’s just for a long time, companies got away with it. And I wanted to get your take on the relationship between some of the societal movements, Me Too, Love Is Love, Black Lives Matter, et cetera. The empowering of those movements to then just say enough is enough. Have you seen that? I mean, do you believe there’s a relationship between some of that and workers today? Just going, “Yeah, I’m just not going to do that.” And therein lies one of the reasons where there is a shortage.

Monica:  16:06

I would argue that that’s exactly right. I mean, we’re sort of in this era of the disenfranchised speaking up and demanding more and demanding to be seen and heard, and hourly minimum wage workers absolutely fall into that category. It’s actually why we went into business in the first place, our founders back in 2014. That was their aim. And we have a lot of bells and whistles and tools, and we’re really optimizing a business practice, but the mission and the goal was always to give voice to the voiceless in this worker category. And we’re definitely right place, right time. We may have been a couple of years ahead of our time, but now is the time where that mission that we’ve always had is starting to grow as a movement for others. And I absolutely see parallels with all the other movements of the voiceless and the disenfranchised speaking up. So I think it’s an amazing time, but definitely something we need to work through from the worker, excuse me, from the employer standpoint. How do we respond is really what I think your listeners are thinking about.

William:  17:18

How do they adapt? I mean, this is all adaptability and flexibility. These are words, not necessarily associated with HR or recruiting, historically, at least. But now they have to be deeply woven. You mentioned skills earlier, and I’ve noticed a lot of people talking about potentiality and capability, but also seeing as a two-way street like, what if someone wants to learn? What do we need to teach them? And then that goes both ways, right? So what are y’all seeing on the front line, in terms of how people engage on the skills level with candidates? That maybe they don’t have the skills. Again, you mentioned warehouse jobs. I’ve worked in warehouse, and I can tell you that I probably didn’t know what I was getting into. I had no idea. I didn’t have the skills. Two weeks into it, yeah. I could fake my way through the rest of it.

William:  18:28

What do companies need to do to then convey either through job advertising or however they get in front of this audience that, “Yeah, you might not be thinking of these transferable skills. “You’re great in retail, you’ve worked five jobs in retail, by the way, hospitality, real similar.” Super similar or food service, real similar to some of those things. You have some transferable skills. So what are you learning from some of your customers?

Monica:  19:00

So there’s a few things we could talk about here. So one that’s interesting is because we’re a contingent labor platform, the folks who accept jobs on our platform in many cases have never worked at that particular location or have worked here and there in that particular location. So I think knowing that flexibility in that category of worker in terms of not somebody who’s there every single day, every week for months and months is more the growing reality, regardless of whether it’s contingent labor or because you are full-time employees are churning, you have to think about almost modularizing it a bit. So for us, we always approach things with the entrepreneurial side of things, because the workforce that signs up for Wonolo are independent contractors often with a desire to gain skills by trying different jobs.

Monica:  19:58

We give them opportunities to connect with different places where they can maybe gain those skills. But it’s really about thinking how do you make any worker, whether they’re there for the first time, haven’t been there for weeks or are there every day, as effective as possible given the environment. And when it comes to skill building, I think there’s two angles. One is for full-time employees, is to make sure that you’re not setting loose the workers immediately without providing the proper information and the proper context and training on your particular environment. And then for those who are looking more at the temp laborers side of things is ensuring that it’s just clear what the work is and what skills are required to be successful and able to perform coming into that workplace. And just recognizing that jobs aren’t one size fits all, and simply considering workers to be just simply a body coming into your workplace is just the wrong way to think about it.

Monica:  21:15

You need to think about the whole person and what they might be bringing to the table and what you may be able to provide. And then for us, we also encourage the users on our platform to share with us what their future desires are, what kinds of jobs they’re looking to maybe go into full-time outside of our platform, or do an attempt-to-hire type of arrangement through our customer base. And we like to hear what skills they want to build, and we hope we like to try to provide outlets or connect them with organizations externally who can potentially help them feed that entrepreneurial spirit.

William:  21:56

It’s funny because we’re rethinking retention. So on one level, I’ve worked in retail and food service 100 years ago. It was seasonal work. We just cast the net, fish would just show up. We’d throw bodies at things and I didn’t really think much of it. And I think we took that, A, that was probably the wrong approach but it was also, we took that for granted. One of the things, the major shifts, and maybe even back to the topic, what we’re learning is we need to think about retention differently. We’ve thought about retention of high performers and high potentials. That’s 30 or 40 years old. We’ve done that. We’ve even done that through the organization, but I don’t think we’ve done that with the workforce that you’re dealing with at all.

William:  22:55

And again, first, you got to attract and then you have to retain, and both are hard, both are critical. Some of your customers, what are you seeing that they do well in terms of retention? Again, getting back to that how long that person stays there and is valuable and productive. Some companies are just doing better at that and that could be just as simple as pay. Great. Fantastic. And if that’s it, great. Are there any other things that people are doing to help them just increase the odds of retaining this talent?

Monica:  23:40

Absolutely. And I think you’re exactly right. Historically it’s been a bit of, let’s just bring in more bodies and see what happens. And I do think that thinking differently is step one. Absolutely, and something that we’ve been focused on since we launched years ago, but yet I think wages when you think about the hierarchy of needs, absolutely wages, number one. I mean, if you’re not paying a fair wage, or a livable wage, or a wage that is relevant either in the local context with the competitive set of other jobs in the area or the context of the work that’s being done, that is a non-starter. And I don’t know if it was before. Unfortunately I think there were definitely folks who had no other options and needed to go work when they knew they weren’t being paid, what they felt they deserved or what they felt that they could live on.

Monica:  24:30

So wage is always a great starting point. And when we consult with customers on how they set their wages, we absolutely ensure that we provide as much data as we can on what’s the competitive wage. What does MIT say to living wages? Let’s talk about it. How do we build a path to success there? That said, wages are not the end or be-all. And we have done some work internally, and it’s not publishable conclusive research, but even directionally, we’ve seen that the… So like many gig economy-type app-based platforms, we have rating systems, et cetera, where Wonolowers, which is what we call workers on our platform can rate the job environment that they go to. And it’s hard to tell exactly what goes into those ratings. Sometimes they’re rating it high or low based on the wage, but when you dig below the surface, we find that wage can only go so far.

Monica:  25:22

And there are companies who pay actually highly competitive wages or pay average or really isn’t a problem that have trouble retaining Wonolowers over time. And they’re constantly are churning. And when you look at ratings that usually reflect things like, is the work environment organized where I was able to do the work successfully? Was I treated with respect? Could I find where I was supposed to be as simple as that was? Are the instructions clear? All of that really has to be considered as well. And we have some companies that are customers of ours who maybe don’t pay as high as others, but are among the most popular when it comes to filling quickly people waiting for those jobs to be posted, getting very excited when they do because they just enjoy the work.

Monica:  26:17

They enjoy the people that are there. They feel a certain way in terms of being fulfilled for the day. And you mentioned that that wasn’t what people thought about when they thought about blue collar work. We always think about… I as a white-collar office worker, I’ve always enjoyed a lot of those considerations, like culture and respect and upward trajectory and a formal onboarding and things like that, that really, we haven’t always trickled down to other work environments. And I think that’s starting to happen, realizing that every category of work has humans there and humans have certain needs and certain interests. And now they’re speaking up and it’s starting to show in the numbers.

William:  27:06

Again, these are things that historically like Plato wrote about homeless in the Republic, 2,500 years ago. That’s not a new concept, treating humans nicely. Not a new concept. I think what’s interesting and it’s reconceptualizing the term, but frontline is actually a military term. And you can go back to any war where you think about historically frontline is where you just throw bodies. And so it’s steeped in our culture and in our crevices of our brain, that’s what we do is just throw bodies at the problem and the bodies now, thank God, are empowered to then go, “Yeah. Not going to do that.”

William:  28:03

I’m good. I appreciate that. Wage, super important. Treat me like a human. Loving the work. These are, again, kind of basic things but they’re not basic because we historically have not been great at doing them. As we go out to just your favorite success story over the years. As you’ve contemplated this, you probably have interacted with, obviously, prospects or customers that just didn’t have the problem or say they didn’t have the problem. And then all of a sudden they bloomed in front of you that, “Yeah, they did have the problem,” and then they overcame it. So what I’m looking for and what the audience loves hearing about is someone who is reluctant, whatever. We’re all reluctant on certain things. Someone who’s reluctant, and then they got over their reluctance. You don’t have to name names. That’s not that important.

Monica:  29:08

Probably, shouldn’t.

William:  29:09

It’s the story. There was reluctance and then here’s what they did. And here’s the outcome. Here’s what they’re finding now.

Monica:  29:17

Absolutely, I think that’s a great question. And yes, everyone is reluctant. In general, when you have a traditional industry like staffing, where things are done a certain way for so long that it takes these early adopters to really start breaking the mold. The example I’ll give is… I’ll give this one because it’s really relevant to the times. So we have a customer whose business model in itself involves a lot of flexibility for their consumers. we can have another half hour conversation about consumer demands changing as well, but consumers like you and I have different evolving demands as well. We want the quick shipping and we want things flexible. I want to be able to cancel last minute. There’s just lots of things that have emerged in this new e-commerce environment.

Monica:  30:07

And we have a customer whose consumer policies and business model means that predicting and forecasting their labor needs is challenging and hesitated and didn’t really know how to solve this and really solved it, probably, with inefficient ways prior. And started working with us to fill sort of the very, very last minute type roles just the very, very last minute, considered it completely supplementary and probably expected that. Yeah, we won’t work with them long-term. This is it just an urgent, oh no what do I do, kind of moment.

Monica:  30:48

And flash forward over a year later, and that’s not the relationship that this company has with us now. This company now relies on us for a significant chunk of their high volume of day-to-day workers, because of the other benefits beyond just being able to get people there quickly. Building this pool of workers who are at the ready, because they’ve been to your work site, they’ve done the job. They may not do it every day, but they will pick up shifts here and there. And they’re finding that instead of relying on a smaller subset of full-time employees that can leave permanently at any moment, they can also tag on a growing number of ready contingent workers to be able to more flexibly and reliably fill shifts every day.

William:  31:46

That’s smart because it creates a burstable environment. When demand is high, great, you’ve got a much larger pool to pull the talent from. When demand is low, great.

Monica:  31:57

Yeah, you’re not simply having to let people go. It’s just, “I don’t need you today, but we might need you tomorrow.” And with our users, that’s exactly what they’re looking for as well. So it’s really trying to match the needs of the work environment with the needs of the workers.

William:  32:13

And if you combine that with a great wage and a great experience, then you’re going to have some semblance of loyalty. Because again, I love it. I love it. I love it. I love it. Thank you so much, Monica-

Monica:  32:28

Thank you.

William:  32:29

… for coming on the show and also just teaching us.

Monica:  32:32

Absolutely. This was really fun. I appreciate the opportunity to talk about Wonolo and hopefully, we can start seeing some of these trends start to blossom and bloom for the workers. So appreciate it and glad to be on.

William:  32:46

Absolutely. And thanks for everyone listening to the RecruitingDaily Podcast. Until next time.

Music:  32:52

You’ve been listening to the Recruiting Live Podcast by RecruitingDaily. Check out the latest industry podcasts, webinars, articles, and news at recruitingdaily.com.