With the gig business model on the rise and more companies paying independent contractors, managers are tasked with incentivizing a relatively new and growing class of workers. Motivating gig workers isn’t an easy task when the traditional rules of engagement and retention don’t apply.
What benefits can companies offer gig workers?
The gig workforce is driven by the opportunity to work on their own terms. The flexibility and freedom that comes with working for multiple companies are attractive for many, but there are some drawbacks for workers as well. Because gig workers are usually not classified as W-2 employees, they’re not entitled to benefits like health insurance or paid time off. To compensate for the lack of traditional benefits, business owners and managers need to find other strategies to keep gig workers engaged.
How to motivate gig workers
Motivating gig workers is different from regular employees because gig workers have the freedom to choose their hours and work for whoever appeals to them. To motivate these workers, you need to offer incentives that suit a gig worker’s interests and lifestyle.
This list of ways to motivate gig workers will help you offer the right incentives for a workforce in a world of unprecedented flexibility. If you want to make sure you’re building a retention-minded culture, walkthrough the worker retention checklist.
1. Pay gig workers every day
A process that lets workers get paid every day is incredibly attractive to gig workers, and not just for the flexibility it brings in enabling workers to draw their earnings when they want.
There’s a huge psychological advantage to flexible pay. It’s reinforcement for good work, and it helps motivate workers to plan on performing future shifts. Getting paid immediately is a nice reward for a hard day’s work, says gig economy expert Harry Campbell, who founded the popular Rideshare Guy website.
In our recent webinar on gig economy trends, Harry explained why daily pay is one of the key ways you can position your company to attract and keep gig workers.
“Having quick access to cash is probably one of the top features ride hail and delivery workers appreciate,” Harry said. “There’s a really good feeling attached to simply pressing a button, and having your earnings come into your bank account right away versus at the end of the week. It feels like you’re getting a nice return on all the effort put in that day.”
Faster pay for gig workers also highlights the benefit of working with your company immediately. A gig worker is more likely to stay with a company that rewards them instantly for work performed. Fast pay also incentivizes workers to log more hours, because they receive gratification for putting in more time. The more positive exposure a gig worker has with a company, the more likely they are to build affinity for your brand and choose it over another lesser-known opportunity.
2. Offer sign-up bonuses
If you need a greater volume of gig workers and are looking to attract new people to your company, consider providing a bonus just for signing up.
Offering sign-up bonuses are especially important if you’re a new service and needing to launch your offering while recruiting independent contractors to join your service. Sign-up incentives can help grab the attention of gig workers, who are often already working with two or more companies, according to our own 2021 gig worker survey.
A financial incentive like a signing bonus can attract money-conscious gig workers who are on the fence about joining your company. A one-time bonus payment is also attractive to commitment-averse workers who are primarily motivated by flexible working conditions.
That said, a sign-up bonus doesn’t always have to be cash. It can also be accelerated earnings for a period of time, free tools or services related to performing the nature of the work (e.g. a bike tune-up for delivery workers) or free access to a community offered by your company.
3. Provide milestone incentives
Incentives can also be tied to milestones, which are designed primarily to retain gig workers, though may motivate new sign-ups as well. For example, you might offer a monetary bonus after six months of service or upon the successful completion of a certain number of jobs. Even small awards for milestones reached, like company swag, can go a long way.
So, how do you choose what milestones to recognize? Keep in mind, gig workers are less interested in staying with a company on the basis of time-worked and are simply looking to engage with companies that offer the most to them. Instead of time-based incentives, consider the nature of your business and how you measure success.
While it may seem obvious to choose “number of jobs completed,” look for opportunities to highlight your worker’s skills, rather than just their tenure. Offering an incentive for collecting a certain number of 5-star ratings highlights the impact of your worker’s achievements. Getting creative with milestone incentives will help you find the signals for and reward highly engaged workers.
According to Harry, more companies are turning to retention-led growth instead of purely measuring acquisition metrics: “So many of these startups have been focusing on growth, and are just now turning their attention to retaining good talent. Showing that your company really cares about retaining the most experienced and the most loyal workers is something that has really been missing in the gig economy until now.”
4. Make tipping easy and clear
Another opportunity to keep workers happy? Make sure the tipping options on your app are clear and easy for customers to use.
Tipping is a code for “I had an enjoyable experience,” and the more often a worker can hear this message, the more positive their outlook about their gigs. When tipping is easy, gig workers receive fast feedback and feel rewarded for a job well done. Additionally, the ability to see tips for workers can give you the insights into who you should be working hardest to retain.
Fostering a positive UX while encouraging customers to tip is a delicate balance. The easier it is to tip, the more likely customers are to send gig workers a little extra, which in turn motivates the worker to continue performing shifts. Some companies choose to make a tip a default setting, while others let customers opt-in. A popular tactic is providing a list of calculated tipping options (15%, 20% or even 25%) to garner more and larger tips from users.
And, of course, be honest with customers and gig workers regarding payment terms for tips. Recently, the gig economy came under fire for tip theft by companies like Doordash and Amazon. Doordash was forced to pay millions earlier this year after workers sued the company for using tips to cover operational costs.
After a lawsuit by the Federal Trade Commission, Amazon agreed to pay $61 million dollars for misleading customers and gig drivers after it claimed 100% of tips went directly to workers. In announcing the proposed settlement with Amazon, the FTC warned gig companies to practice better communication. “When advertising gig opportunities at your business, be transparent about material terms,” the announcement read. “Like other objective claims about product attributes, performance, or price, companies also must live up to their representations about tipping policies and practices.”
Motivating gig workers has never been more important
If you want to motivate your gig workers, it’s critical you approach engagement and retention strategies with more nuance than your standard full-time employees. To be successful, companies must remember that gig workers respond less to recognition among peers or professional mentorship and more to transactional benefits that support their flexible lifestyle.
Changing your perspective on perks for gig workers to be used (and continually invested in) as retention strategies will help you build programs that engage and motivate your workforce. Offerings like daily pay, sign up bonuses, milestone awards and a straightforward tipping structure are key to incentivizing long-term loyalty in a short-term work culture. To learn more about what gig workers want from employers today, watch our on-demand webinar on the gig economy trends shaping 2021 or download our 2021 Gig Worker Survey Report.