Survey says: Today’s “on demand” economy brings new challenges in presenting a brand and its contractor base as one - ClickSoftware

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Survey says: Today’s “on demand” economy brings new challenges in presenting a brand and its contractor base as one

June 9, 2015 Robert Stanley 0 Comments

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Modern business practice, especially in the service industry, is in the midst of an evolution toward the use of “workers on tap” for service fulfillment, to the point where it’s not far-fetched to visualize a day when freelance labor will become the rule, not the exception. One needs to look no further than the seemingly overnight emergence of on-demand providers like Uber, Lyft and dozens of others to see the trend borne out.

Established household brands are also putting the model to use; manufacturers increasingly turn to contracted providers to carry out branded installation services for their goods, and big-box home retailers do the same for, say, flooring or HVAC equipment that was purchased in-store.

Trouble is, the relationship between these primary brands and their contractors is not foolproof; in fact, according to a new ClickSoftware survey of companies in the installation, home service, retail and utility industries, there are major service gaps that are weakening company reputations and increasing the cost of service every year.

And technology may be the weak link for these brands.

The findings from 200 mid-level and senior executives within departments that deal with third-party contracting not only affirm that third-party contractors are being used more year over year, but also that the more often contractors get used, the more likely customers are to report poor performance. This correlation creates a fairly severe red flag for any company looking to increase its use of contracted services:

  • 66 percent of contractor managers believe costs associated with repeating work due to poor performance of contractors/subcontractors increases year over year
  • Companies with more than 25 percent of their work handled by contractors/subcontractors are almost 30 percent more likely to agree that poor performance of their contractor work increases year over year than companies with less than 25 percent of their work handled by contractors and subcontractors

Dissatisfaction most often arises from inconsistent scheduling and a lack of communication on the part of the contractor, but failures on both ends of the transaction contribute to the shortcomings:

  • Two-thirds of complaints about service by contractors are attributed to scheduling issues, with a third stemming from late arrivals.
  • 89 percent of contractor managers agree that contractors and subcontractors should be more transparent and communicative in order for the general business to succeed
  • A significant percentage of contractor managers say they don’t consistently measure on-time arrivals, customer feedback/satisfaction and time spent to complete projects.

The good news is, these mishaps are correctable when we begin to investigate, “Why?” The common thread among respondents is that they are simply UNABLE to gain enough visibility into their contractor’s day-to-day activities to establish performance metrics that would bring about a change for the better. Traditionally, that disconnect occurs from a simple lack of technology to meld third-party service-people and the companies they represent.

  •  87 percent of contract managers agree there would be fewer customer complaints if there was a solution that kept both the contractors and subcontractors better informed; 84 percent wish there was a tool that helped monitor contractors/subcontractors

“When we’re seeing more than 80 percent of contractor managers express desire for a tool that would help them better monitor and communicate with their contractors and subcontractors, it’s clearly gotten to the point where, as an industry, we really need to think about creating new methods and technology to do the job,” said Stephen Timms, ClickSoftware president, Americas. “We believe our new Service Networks for Contractors solution, with built in analytics, structured problem-solving algorithms and artificial intelligence, will change the game for a brand and its contractor base to be presented, and managed, as one.

Use of the “contingent workforce” is only going to become more common; the challenge for in-house managers is to support these contractors better, so that customer satisfaction—and brand reputation—goes up, not down.

To learn more about the survey results and analysis, download the full report here.

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