Sharing economy gets HR twist

There's a new dimension to China's sharing economy. Human resources, it turns out, can be shared too among employers in a way that sustains the economy during troubled times.

During a crisis (like, say, an economy-unsettling epidemic), flexible work arrangements seem an eminently sensible way to not only stay afloat individually but sustain and strengthen at least some, if not all, business segments.

Startups as well as established corporate giants that operate online grocery apps in China will probably agree. Consumers staying at home due to the COVID-19 epidemic turned to their digital retail channels to stock up on food stuffs. This necessitated additional deliverymen, in the process spawning an innovative business that has far-reaching implications for the way workers are henceforth employed and compensated.

Online grocery apps such as Hema, JD Fresh, Daily Fresh and Dingdong Grocery would not have been able to rake it in over the last two months without the help of the vast army of couriers.

What makes the latter's role even more amazing is that most of them are novices or newcomers in the delivery business. Be it a restaurant receptionist or a cashier at a supermarket, they chose to work as couriers during the outbreak to survive loss of job or extended leave without wages.

Technologies like big data, the never-say-die spirit of Chinese entrepreneurs, and their ability to think on their feet made it possible to juggle the workforce, redeploying idle hands in some affected sectors like offline retail and restaurants to businesses like e-commerce that faced severe shortage of manpower, experts said.

Zhao Yuxiang acknowledges what a difference a job switch can make to his life at this point in time. He is among thousands of employees who are struggling to maintain a steady paycheck. The restaurant chain he worked for in Shanghai was forced to temporarily shut down as customers dwindled to a trickle due to the outbreak.

"Though the company has promised to pay a basic salary and subsidies in the following months, I'm looking for a part-time job," said Zhao.

Pioneering the employee-sharing initiative is Alibaba Group's Hema, which owns both online and offline shops with a wide portfolio of premium food items. In early February, it began hiring from restaurants and retail chains big and small that were riddled with idle or excess manpower as well as a capital crunch.

Jia Guolong, head of popular catering hall brand Xibei, warned that popular restaurant chains could survive no longer than three months on loans. He admitted even companies like Xibei could be on the verge of bankruptcy if things do not improve in the short term.

"Takeout orders reach about only 10 percent of the previous average, and over 20,000 workers are unemployed," Jia said.

Two weeks since Hema kicked off the job-share scheme, over 1,000 Xibei employees have donned Hema's iconic blue vests and started work in their new job as deliverymen.

For Hema, this brought in cost and time benefits: the firm did not have to conduct elaborate interviews and background checks, given that the integrity and credentials of the staff it was hiring were vouched for by their current employers. This was just as well because the move obviated potentially risky in-person interactions during the contagion.

For current employers such as restaurants and retailers, the arrangement helps keep their idle staff employed elsewhere during the difficult period. Although the former may not gain financially from the staff-share agreements, they do value employee loyalty and corporate social responsibility－helping keep workers gainfully employed preserves social order as well.

According to Hema data, 3,000 temporary recruits have been onboarded. They were sourced from 32 brands spanning catering firms, ride-booking companies, shopping malls, hotels and cinemas.

"The idea of sharing employees first came up as a temporary measure to handle the changes brought by the epidemic, but we have seen great potential in it," said Hu Qiugen, who manages Hema's national operations.

Diminished fluidity in the labor market and an ever-increasing gap between supply and demand gave rise to employee sharing, intra-industry or inter-industry, said Han Jian, associate professor of management at the China Europe International Business School in Shanghai.

"In developed economies, the percentage of flexible employment could average between 30 percent and 40 percent," she said. "Such a trend is also inevitable in China, and the outbreak has pushed it to the forefront and under the spotlight."

Regarding the rise of flexible work arrangements, Han highlighted a combination of factors, including an aging population, industrial structural adjustment, the accompanying upgrade of products and services, and the subsequent changing requirements in terms of knowledge and skills of labor.

Many internet-based firms have jumped on the staff-share bandwagon. Top players such as JD's online-to-offline or O2O platform Dada, Suning and Dingdong Grocery unveiled recruitment plans for temps.

Suning said nearly 3,000 applications were received in just three days after the hiring notice went public on Feb 7. Dingdong Grocery said it planned to hire 1,500 people from the catering and hospitality fields.

Chen Yan, head of recruitment agency Veryeast, which is dedicated to the tourism industry, said requests from member companies to sign up for a joint employee-sharing plan were "brisk and earnest". The initiative aims to connect idle workers of hotels, canteens and travel agencies with the likes of logistics and e-commerce sites that are desperate for skilled temps.

"We hope the staff-share initiative can address the companies' urgent needs and minimize their losses during the epidemic," Chen said. "Also, staff members stand to increase income, injecting confidence that the tourism industry is set to bounce back on pent-up demand."

Gao Guolei, managing partner of Zhanghe Capital, said the outbreak has effectively allowed certain enterprises to "experience" flexible working arrangements, which are set to be a long-term trend.

"The unified permanent employment relationship and fixed schedule of '9-to-5' would become a vestige of the past," said Gao, also a visiting scholar of Columbia University. "With the passage of the time, we will definitely see a variety of work arrangements and corresponding labor agreements materialize."

Referring to cases in the West, Gao listed several income types: package, which includes a basket of equities including regular income, allowances, and even stock options; income normally fixed by annum or month; and wages, usually settled by week or even on an hourly basis.

"Select Chinese cities are likely to see a surge in paychecks calculated by hour or by workload," he said.

Han from the CEIBS believes employee-sharing is conducive to companies that are agile in human resources allocation and control relevant costs. She expects a surge in demand for specialized third-party professional services firms.

But she noted companies need to refine their human resources strategy to keep abreast of the times. They need to keep assessing the person-job fit factor, and which positions are suitable for flexible hiring (normally labor-intensive roles). At the same time, employers should ensure their core talents are retained.

"It's also important to update relevant laws and regulations related to flexible employment," she said. "These include a wide range of topics like a clearer definition on the labor relations, rights and liabilities, as well as the prevention of commercial secret leakage and damage to corporate image."

Gao said social security mechanisms should be optimized to protect legal rights of "flexible workers".

"Especially for those who come from rural areas, they only have temporary work contract with employers. Their social insurance and related benefits need to be properly sorted out," he said.