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Win on cost, win on quality, win in 2023: How (and why) field service leaders should leverage on-demand labor

November 2, 2022


Field service is at a crossroads.

Sustained demand from the retail sector has led the industry into a transformative new era. Changing consumer expectations have driven substantial new retail investments in point-of-sale equipment, sensors, IoT technology, and the cabling/networking infrastructure needed to support the digital customer experience.

At the same time, volatile market conditions are pushing costs upward across the board. Stubborn inflation rates make travel and materials more expensive. Persistent labor shortage issues (combined with high demand for technical labor) push field service costs even higher. And to twist the knife a bit more, supply chain disruptions are driving a backlog of work going into 2023.

In short: field service leaders are in a bind. They need to watch costs with unprecedented care to keep their margins from disappearing. At the same time, they need to provide a quality service experience to stay competitive.

Some service companies ensure quality by leaning on a staff of full-time employees, which often results in long, expensive drives (or even flights) to job sites. The typical, well-utilized employee racks up over $8,000 in mileage costs per year––and that’s not including the significant idle cost your service company spends on their “windshield time,” i.e., the time a technician spends on the clock getting to and from distant work locations.

Other service companies lean on subcontractors to increase coverage and agility, which shuts the company out of the technician selection process and leads to a loss of quality control. The gap in service quality can become dramatic during labor shortages because subcontractors can’t source the depth of talent they need. If and when subcontractors leverage other regional and specialty subs, it becomes virtually impossible for service companies to have direct control over quality outcomes––an unacceptable prospect for service leaders looking to protect their brand. 

The resulting cost/quality dilemma places service leaders in a precarious position. Either give up control of their brand to gain flexibility and coverage, or cover the gap with travel and absorb enormous costs.

Luckily, there is another option service leaders can add to their toolbelt: on-demand labor. By supplementing their full-time employees and subcontractor relationships with a network of trusted on-demand technicians, field service companies can reduce costs, expand their coverage, and ensure the quality of service that keeps their clients coming back with new work.

Bridge a key gap in the service delivery model

The modern approach to on-site services staffing has evolved toward fully embracing a blended workforce comprised of employees, subcontractors, and on-demand labor. This trend takes advantage of the growing number of self-employed technicians and empowers service organizations to weave a much-needed element of flexibility and agility into their planning models––all while reducing the costs associated with getting full-time employees to distant work sites. In total, these cost savings can add up to as much as 30 or 40 percent.

On-demand talent combines the coverage and variability of the subcontractor model with the control and transparency of the employee model. Talent platforms like Field Nation allow companies to select technicians based on a wealth of available information––location, experience, certifications, reviews from previous clients––which restores insight typically lost in subcontractor arrangements.

Field service techs are increasingly the face of service delivery brands: they are often the primary (or only) in-person interaction point with end customers. On-demand labor gives service companies the much-needed option of personally selecting and educating the contract technicians who bear this important responsibility.

Say goodbye to painful and costly tradeoffs

The traditional employee and subcontractor models are at opposing ends of the spectrum, resulting in tradeoffs between coverage, cost, and control. By incorporating on-demand resources into their labor mix, companies can bridge that gap with flexible, local resources while also having visibility and control of the technician selection process.

The result is a blended workforce model that aligns each option’s strengths with the work’s complexity, variability, and location. Service leaders are positioned to deliver it all: a competitive price point at a profitable margin delivered with a high quality of service.

Break from tradition: how to get started

Legacy organizational models have served field service leaders well for years. These models have gotten them where they are today. Unfortunately, they won’t get them where they need to go next.

The hard truth is that traditional labor sourcing strategies hamstring the growth of many field service companies in a macroeconomic environment that demands adjustment. Current market volatility is not a phase to be waited out. It is the announcement of a new economic reality defined by prolonged uncertainty, agile organizational models, and the ongoing digitization of the customer experience. Field service companies that fail to recognize this will find themselves playing catch up and losing deals to more agile competitors in the not-too-distant future.

On-demand labor is a crucial lever that field service organizations can pull to build resilience and a sustainable capacity for growth into their business models. What’s more, partnering with a trusted on-demand talent marketplace helps simplify the ramping process. Here are three steps service organizations can follow to begin incorporating on-demand labor into their blended workforce model.

1. Validate

Timeline: 1-3 months

Scope: One project, one region

Start small. Choose one project you can complete using on-demand labor.

Establish the criteria you will use for selecting technicians. Work with a partner who understands on-site talent platform best practices and can help you set up your instance for success. Create the materials (i.e., company-specific instructions, job posting templates, etc.) you’ll need to promote and manage work on the platform. Establish parameters to measure the effectiveness of engaging with on-demand technicians upfront. Common examples of these parameters include average price per ticket, first-time resolution, and customer satisfaction ratings.

2. Adopt

Timeline: 3-6 months

Scope: One project, nationwide

Now that you’ve validated that the on-demand model can work alongside your other types of labor, we recommend scaling to additional geographic regions across the U.S and adding more types of work.

3. Scale

Timeline: 6-9 months

Scope: Multiple projects, nationwide

Once you’re confident the on-demand model works well for multiple locations for a single project, you’re ready to scale to multiple projects. Upon reaching this milestone, we recommend integrating an on-demand labor solution with your field service management software to reduce redundant data entry.

If you have questions about how on-demand labor can address your business’s unique needs, connect with an expert and get the answers you need.

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