New buzz words making the rounds today include “Mixed Labor Models” and “Hybrid Work Forces,” which basically describe the “Uberization” of the labor market. Companies are looking to reduce the number of full-time employees and have a more nimble, adaptable labor force that can expand and contract with market demand.
This has routinely been the case with manual labor and service staff—think of resorts staffing up for the season or the post office hiring additional temporary employees over the holidays. But this new push for flexible labor models in field service is different in that it looks to change the ways organizations manage their core labor component in new and challenging ways.
Challenges in the labor market—such as the aging of the population—are partially responsible for driving these changes. Increased longevity and reduced birthrates have positioned us where people aged 60 and over will soon outnumber children aged five and under, according to the World Economic Forum.
The “graying” of the workforce is particularly significant for equipment service providers. In the Oil & Gas industry, almost 30% of the workforce is within 10 years of retirement age, with the average age of an Oil & Gas worker being 43. This industry will face a significant labor shortage as their seasoned workers begin to retire in the so-called Silver Tsunami.
One of the ways in which companies are facing these challenges is by using emerging technology to change the way people work. Many companies have taken advantage of easy access to broadband to extend the working life of older, more experienced technicians by creating a “Tier 2 Equipment Support” function.
These older technicians may not want to drive a van and work on equipment as they approach the age of 60, but they are very capable of providing expert remote support, via phone and video, to younger, less experienced technicians. This approach provides multiple benefits:
- Reduced labor costs: A Tier 2 Support Representative can support many junior technicians who command lower salaries
- Improved Knowledge Transfer: Active engagement between the more experienced technicians and the less experienced ones promotes extremely effective knowledge transfer
- Improved Metrics: Overall key metrics like First Time Fix Rate, Mean Time To Service/Repair/Install are maintained or improved
Another approach to overcome the Silver Tsunami is to create a skilled labor pool of partners or contract technicians. These pools and technicians can gain their own certifications, training or licenses, and then register on a company’s website and select jobs from a list of available work.
This is particularly attractive to companies that are obligated to service areas that are less populated and don’t have enough work to support dedicated full-time employees. Pooled labor allows the company to provide service to those areas without the expense of maintaining full-time staff.
Some technicians find this really attractive, as they can manage their own careers, increase their own skill sets based on the work available, and work when and where they want. According to Brookings, as many as 10% of the labor market is engaged in nonstandard work agreements or the “gig” economy.
In Practice: Video Chat Powered Pooled Labor
New mobile technologies have given equipment companies a wide variety of options for how they structure their workforce. Every permutation is possible, from 100% on-site staff to a fully flexible labor pool of independent contractors.
One company I advised created a flexible arrangement where they ship IT equipment to a local UPS Store and hire an independent contractor to pick up and install the equipment. To complete the installation, the contractor video chats with an experienced technician who remotely guides them through the process. Afterward, the contractor sends the old equipment back in the same box the new equipment arrived in. With this strategy in place, the company plans to reduce its technician headcount by more than 90%, grow its revenue and new sales placements, and improve its margin significantly.
The Right Technology For Riding The Silver Tsunami
The benefits of mixed labor models for service providers are very clear: reduced fixed costs, higher margins, increased flexibility, and greater talent retention. Workers can benefit from non-standard work agreements as well by having the ability to focus on the areas that interest them, build their own skill sets and professional reputations, and work when and where, and as often, as they like.
What is critically important is the technology you use to power your hybrid workforce. An end to end Field Service Management tool equipped with a Partner and Customer Portal and a secure communications platform that encompasses voice, text, and video will get you there. The use of this technology allows you to take advantage of the workforce models outlined above while staying focused on the customer experience.
With an FSM tool, every activity can be monitored, time-stamped, standardized, and measured for accuracy, timeliness, and customer satisfaction. You can provide real-time communications with customers including advance notification of who is coming and when they will arrive (whether FTE or Contractor). You can also administer NPS or Customer Satisfaction Surveys in real-time. As these technologies continue to mature and develop, equipment services providers and their labor markets will never be the same again.
To learn more about the labor shortage and changes taking hold in the field service industry, read our post: Ringing in 2020: The 7 Field Service Trends to Expect