In April 2020, at the height of the US pandemic lockdown, the unemployment rate surged to a staggering 14.7%, with 20.5 million jobs lost in April alone. Many of those jobs were in the retail sector as brick and mortar stores nationwide closed.
The April month job losses shattered the previous record and wiped out the nearly 23 million jobs created since the 2008 financial crisis. Fortunately, many of those jobs have come back, and while some of the employees who were laid off may return to their former employer, many of them won’t.
In the short term as businesses open back up — from retailers to restaurants to childcare — we expect some employers will re-hire some of their former employees. We also expect many employers to hire new workers.
So how does a company that experiences aggressive hiring swings handle sourcing and screening of new employees at scale?
Turn, a Silicon Road portfolio company, is a sourcing and screening platform for gig and 1099 workers. According to ADP Research Institute, gig workers constituted 16.4% of the workforce in US enterprise firms in 2019. Turn is focused on helping companies identify and vet a worker fleet that can quickly scale as needed. For many companies, from retailers who are reopening, to two-sided marketplace startups trying to balance supply and demand sides, being able to quickly scale and contract workforces is a make-or-break capability.
We are bullish on Turn in both the short term as the nation recovers from the pandemic and also the longer term (2+ years) as the gig economy continues to go mainstream.
Employers spend billions of dollars annually to source 1099 workers. The average cost of screen is $200 per worker and filtering by worker capabilities and background is often not possible. Turn’s screen costs around $15 per check per candidate.
And now, six months after what we all hope will be peak unemployment of this pandemic, we’re seeing improving employment trends. In September, retail trade added 142,000 jobs, including over 40,000 in clothing and clothing accessories. General merchandise stores accounted for 20,000, but employment in retail trade is still 480,000 lower than in February. *Statista Employment Trends report 10/2020.
As employers navigate what will likely be a long recovery, solutions like Turn can help bring more scalable capabilities to previously high touch, low tech processes.