Online Part-Time Recruitment— An E-Commerce Approach to Social Issues

IT Does Matter

Kenneth Or Bing YangDerek Hui Chin HoVincent Fung Chi ChungFlavia Tai Lai YungAlfred Yuen Lap Chau

Agenda

• Problems with existing employment market

• Solution: existing part-time websites

• Our solution– Business model– Underlying magic – how it works

• Marketing and sales

• Feasibility evaluation: SWOT analysis

Problems with Employment Market

• Marginalized groups cannot find permanent jobs

• Workforce with special skill-set cannot be offered a dedicated position

• Want extra money• Cannot work full time

– Family role– Pregnant, sick or injured

• Elders or retired people still want to contribute to the society

Problem for Employers

• Seek workforce with other unusual commitments e.g.:– Childcare– Taking care of pregnant women

• Want top-up workers at irregular times

• Temporary position required

• No regular headcounts allocated for some positions e.g. copywriters, translators

Problem for Both Parties

• Hard to match supply and demand

• Wage rate is not open, fair nor just

• For workers, they want flexibility yet continuity

• For employers, they also want flexible replacement and want insurance of workforce quality

Current Oversea Websites

• www.prospect-us.co.uk– Specialize in jobs in the not-for-profit

sector and actively seek to place people with disabilities and minority groups

• www.silversoftime.com – Link together companies searching for

workers at short notice for temp jobs and individuals who want to spend their free time to earn money

• www.womenlikeus.org.uk

Current Oversea Websites

• www.womenlikeus.org.uk – Find part-time positions for women who

need to work around their family commitments

Our Solution

• To have a web site which can link the part-time workers and employers together with adjustable prices

• Key points:– Workers/employers can set their desired

wage rate– Both parties can rate each other according

to their qualities– Price vs. Quality → Indexes for selection

Business Model

• Commission e.g. 5% + 5% on contract sum

• Employers need to pay for full resume and history of workers

• Applicable jobs:– Tax declaration, auditing, promotion, HR

training, paper-marking, tutorials, babysitting, graphic/web design, programming, system integration ……..

Underlying Magic

Time 0 Wage per hour (w)

Self-rated value (s)

α (w)

Employer value (e)

Overall value (v)

= s x e

Worker 1 35 3 3 9

Worker 2 33 2 3 6

Worker 3 33 2 3 6

Worker 4 36 5 3 15

Underlying Magic

• Remarks on time 0:– Values s, e ranged from 1-5– Workers can set their own price w– Price w can positively affect self-rated value s

– As there is no employment history, e is 3 for all workers

– w and v are visible to both workers and employers; but s and e are not

– However, individual rate given by employer is known to worker

Underlying Magic

Time 1 Wage per hour (w)

Self-rated value (s)

α (w)

Employer value (e)

Overall value (v)

= s x e

Worker 1 35 3 3 9

Worker 2 33 2 3 6

Worker 3 33 2 3 → 3.5 6 → 7

Worker 4 36 5 3 15

Underlying Magic

• Remarks on time 1:– Employer x just wanted a lower-priced

worker. He arbitrarily chose worker 3– Employer x hired worker 3 for 10 hours– Contract sum = 10 x 33 = 330– Commission = 16.5 + 16.5 = 33– Employer x found worker 3’s job good, so

he rated 4 for worker 3– e3 changed from 3 to 3.5 (3+4 / 2)– v3 also changed from 6 to 7

Underlying Magic

Time 2 Wage per hour (w)

Self-rated value (s)

α (w)

Employer value (e)

Overall value (v)

= s x e

Worker 1 35 3 3 9

Worker 2 33 2 3 6

Worker 3 33 2 3.5 7

Worker 4 36 5 3 → 2.5 15 → 12.5

Underlying Magic

• Remarks on time 2:– Employer y wanted a high-quality worker.

He looked at v and chose worker 4– Employer y hired worker 4 for 20 hours– Commission = (20 x 36 x 0.1) = 72– But employer y found worker 4’s job bad,

so he rated 2 for worker 4– e4 changed from 3 to 2.5 (3+2 / 2)– v4 also changed from 15 to 12.5

Underlying Magic

Time 3 Wage per hour (w)

Self-rated value (s)

α (w)

Employer value (e)

Overall value (v)

= s x e

Worker 1 35 3 3 9

Worker 2 33 2 3 6

Worker 3 33 2 3.5 7

Worker 4 36 5 2.5 → 1.75 12.5 → 8.75

Underlying Magic

• Remarks on time 3:– Although v4 was lowered, worker 4 is

ranked highest in terms of quality– Employer z also wanted a high-quality

worker, and so chose worker 4 still– But employer z also found worker 4’s job

bad, and he even rated 1 for worker 4– e4 changed from 2.5 to 1.75 (2.5+1 / 2)– v4 also dropped from 12.5 to 8.75

Underlying Magic

Time 4 Wage per hour (w)

Self-rated value (s)

α (w)

Employer value (e)

Overall value (v)

= s x e

Worker 1 34 3 → 4 3 9 → 12

Worker 2 33 2 3 6

Worker 3 33 → 34 2 → 4 3.5 7 → 14

Worker 4 36 → 32 5 → 1 1.75 8.75 → 1.75

Underlying Magic

• Remarks on time 4:– In view of the v has been lowered a lot,

worker 4 has to lower his price to remain competitive

– But, the new w4, as compared to w1,2,3, will lead to lower s4 – it is a matter of self-confidence. At last, v4 dropped a lot

– So, worker 4 needs to rethink his strategy

Underlying Magic

• Remarks on time 4:– On the other hand, suppose worker 3 feels

confident of his work (perhaps employer x thanked him so much); he raises his w

– s3 will be then higher, and v3 will be higher too

– At the same time, as s depends on the w chosen by other workers, one’s actions will affect the others

– Now, both s1 and v1 are higher, just because of worker 3’s action

Underlying Magic

• Questions:– Can someone raise his w extremely high in

order to increase his v? No, because:• The highest s he can get is 5• The platform will prohibit him from doing so• Even s is 5, v is still in the middle if e is not high

– After a worker has finished a job with an employer, they will trade secretly to avoid paying commission• e will drop steadily over time if no further

transaction declared; v will be affected

Underlying Magic

• The same concept is applicable for the employer side

• The only different is that s (the self-rated value of employer) is inversely related to w (the wage rate the employer offers) i.e. s α 1/w

• Worker side can automatically matches the employer side by setting criteria e.g. v: 12 – 18, w: 35 – 37

Underlying Magic• Both workers and employers have the

bargaining power — different from traditional post-and-apply mechanism

• Overall quality of workers/employers v depends on both the self judgment s and the comments of the other side e

• Wage rate can be up/down to reflect the market

• The Nature of Firm: firms exist because of transaction cost in a free labor market; the system can lower the transaction cost

• Advocacy: people are talented and of values, even they cannot contribute in full-time

Marketing and Sales

• Social enterprise concept: meets the needs of social concern

ProfitSeeking

Charity – HelpingPeople

Advocacy – responding to social issues e.g.gender equality,poverty concern,green solutions, helping disabled…

Corporation: profit-seeking + helping people Lobbying groups: helping people + advocacy NGOs: mainly helping people Government: helping people + little profit-seeking Religious groups: helping people + advocacy

Social enterprise: concerns ALL 3 areas

Marketing and Sales

• Fact: a social enterprise organization approaches us for cooperation — there is indeed need in the market

• Alliance with NGOs

• Alliance with corporations with social care in their mind

Feasibility Evaluation

• Strength– Both workers and employers have

bargaining power– Workers / employers quality depends on

both worker self judgment (s) and employer comment (e)

– Both workers and employers control labor quality

– Both workers and employers can have a clear understanding of the market situation.

Feasibility Evaluation

• Weakness– Not all employees willing to reveal wages

and performance so openly– Not all employers willing to provide

feedback to evaluate employees– System depends on both employers and

employees’ cooperation– Factors such as fringe benefit, working

environment cannot be quantified easily

Feasibility Evaluation

• Opportunity– Gathered data are useful for social

problem analysis, government’s society planning, etc

– A low labor force participation rate = A demand for part-time jobs

– More competitive business environment + companies tend to recruit permanent position = Part-time job is an option

Feasibility Evaluation

• Threat– Prevailing job seeking web sites are

available in the market– Part-time job seekers may seldom use web

sites, or hesitate to use IT to help them find jobs