IE 11 is not supported. For an optimal experience visit our site on another browser.

The Next Generation of Temp Agencies

Low-cost, online-based companies like TaskRabbit and Fancy Hands reimagine short-term help.
/ Source:

Anne Ricci was overwhelmed--an all-too-common state for an office manager at a fast-growing startup. This year alone, her San Mateo, Calif.-based company, big-data firm Platfora, has increased its staff from 37 to 60 (and still hiring ). With each new employee, Ricci has more to do, from filling printers and stocking pens to maintaining the kitchen and making coffee. She needed help.

But instead of calling traditional temporary-staffing firms like Kelly Services or Manpower, she used San Francisco-based TaskRabbit, a low-cost, online-based take on the traditional temp-services model, to bid out her need for part-time help for an indeterminate length of time.

"As a growing company, we are conscious about overstaffing or understaffing," says Ricci, who ultimately settled on a kitchen helper to come in three mornings per week. "The reason we went with TaskRabbit was for the flexibility to fill that role."

The Temp Team
In March, TaskRabbit--available in most major metro areas--linked services with New York City-based Fancy Hands, which provides a different take on short-term help. As opposed to TaskRabbit's in-person services, Fancy Hands has temps who are located remotely and can handle quick jobs via phone or e-mail, such as planning and coordinating meetings, doing light data entry or tackling online research. The combination of TaskRabbit and Fancy Hands has created a full-fledged resource for short-term workers of nearly every stripe and project description. For many cash-strapped entrepreneurs, these online hiring services are making short-term help an affordable option.

While their systems may work together, the companies have different approaches to the ultra-short-term labor market. On TaskRabbit's website and mobile app, clients post jobs that can be bid on by 12,000 vetted workers. By connecting a LinkedIn profile to a TaskRabbit account, a worker can share a résumé and feedback received from previous jobs. Clients can communicate with applicants through TaskRabbit's messaging system; once a person is selected, the service does all the behind-the-scenes work, such as filing W-2s or 1099s and handling payroll, workers' compensation and taxes.

"We're transparent about our fees on both sides," says Anne Raimondi, TaskRabbit's chief revenue officer. "So it's easy for everybody to see what the [worker] will make, what we make and then what the total amount the client pays is."

Fancy Hands, meanwhile, is a subscription service that provides a set amount of tasks per month for a flat fee, starting at $25 for five requests. Its automated system uses an algorithm to estimate the time and effort necessary to complete a task. Easier jobs, like sending e-mails or booking appointments, are executed by the service itself, while more difficult requests, like proofreading or setting up spreadsheet files, are performed by the more than 5,000 workers hired by Fancy Hands. The algorithm also determines the price paid out per task. Because its software does much of the work, the company can keep costs down and reduce human error. 

"People tend to forget to do things here and there when it comes to hiring temps," says Fancy Hands founder Ted Roden. "Our computers do not."

Businesses like TaskRabbit and Fancy Hands are especially popular among startups and fast-growing technology firms that use them to schedule flexible administrative support or compile and stuff mailings. Some even use them to engage in corporate mischief--people have hired TaskRabbit to prank their co-workers by wrapping their desks in cellophane.

Helping Hands
TaskRabbit launched in 2008 as a personal-errand business, helping the overscheduled with grocery shopping or waiting for the cable guy. The company came about after founder Leah Busque realized she was out of dog food just as she was leaving to go out to dinner. She thought it would be great if there were a place online where she could say that she needed dog food and name the price she was willing to pay to have it delivered--if only there were an app to facilitate the exchange.

Similarly, Roden had a full-time job, a baby and a book deal lined up when he decided to start Fancy Hands in 2010. The impetus: He wanted to take his wife out to dinner but couldn't find the time to call and make a reservation. "Rather than make a simple phone call, I built an elaborate system to do it for me," Roden says.

Both companies eliminate the middleman of traditional staffing firms and, as a result, can offer significantly lower rates to their clients. "The markup in traditional temp agencies is quite high," says TaskRabbit's Raimondi. "Whereas ours is between 20 and 26 percent, temp agencies are anywhere from 40 to 80 percent."

Fancy Hands and TaskRabbit have seen a steady increase in clients (though both declined to reveal customer or revenue information) as they benefit from a boom in the temporary staffing industry.

According to the U.S. Bureau of Labor Statistics, between 2009 and 2012, temporary staffing firms added more than 786,000 jobs to the economy; this translated into $98.3 billion in revenue last year.

"Temporary workers are only becoming more popular because benefits have gotten so expensive for companies," says Cathy Reilly, a human resources veteran and author of The Temp Factor. "So this was an easy solution to manage those costs and yet maintain a level work force to meet the needs."