Maximizing the Benefits of an On-Demand Workforce: Fill Rate-Based Allocation and Coordination Mechanisms

57 Pages Posted: 14 Jun 2016 Last revised: 22 May 2019

See all articles by Tao Lu

Tao Lu

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM)

Zhichao Zheng

Singapore Management University - Lee Kong Chian School of Business

Yuanguang Zhong

South China University of Technology

Date Written: May 21, 2019

Abstract

With the rapid growth of the sharing economy, on-demand staffing platforms have emerged to help companies manage their temporary workforce. In this paper, we study how to maximize and distribute the benefits of an on-demand workforce in this new business context. We consider an on-demand staffing platform that serves multiple employers with uncertain demands using a common pool of self-scheduling workers. To compare this method with traditional staffing solutions, we first investigate when an on-demand staffing platform can be beneficial from the perspective of a central planner. Next, we propose a novel fill rate-based allocation and coordination mechanism that enables the on-demand workforce to be shared optimally when individual employers and the platform operator make decisions in their own interest. Our results suggest that a win-win-win solution can be achieved in an appropriately designed system: Individual employers and the platform operator share the maximum benefits of on-demand staffing, while workers are able to set their own hours.

Keywords: Sharing Economy; On-Demand Staffing; Capacity Pooling; Incentive Contract

Suggested Citation

Lu, Tao and Zheng, Zhichao and Zhong, Yuanguang, Maximizing the Benefits of an On-Demand Workforce: Fill Rate-Based Allocation and Coordination Mechanisms (May 21, 2019). Available at SSRN: https://ssrn.com/abstract=2783617 or http://dx.doi.org/10.2139/ssrn.2783617

Tao Lu

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM) ( email )

Rotterdam
Netherlands

Zhichao Zheng (Contact Author)

Singapore Management University - Lee Kong Chian School of Business ( email )

50 Stamford Road
Singapore, 178899
Singapore
(65) 6808 5474 (Phone)
(65) 6828 0777 (Fax)

HOME PAGE: http://www.zhengzhichao.com

Yuanguang Zhong

South China University of Technology ( email )

School of Business Administration, SCUT
Guangzhou, AR Guangdong 510640
China

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