One day, companies will lend each other employees

Published on 04/05/20

Extraordinary circumstances, extraordinary solutions. Given the magnitude of COVID19, not only are we seeing full mobilisation but we are witnessing unprecedented collaborations and behaviour. This is particularly the case with certain retailers who have exchanged employees. Could it last beyond the pandemic?

When Chinese employers share employees.

The maths is simple: on the one hand there are entire sectors (such as catering, hospitality, non-food retail and tourism) whose employees can no longer work. On the other hand, supermarkets and delivery services have been completely overwhelmed by demand during lockdown. Hence the idea of the interconnecting systems: taking from Peter in order to give to Paul. This is essentially what has been happening in China since the beginning of the pandemic with the increase in “employee sharing” schemes.

ALIBABA employs workers from troubled sectors during Covid19

The idea is to allow employees to belong to two companies at the same time. The employees remain under contract with their original employers, but are paid by the company which employs them for the required period. It’s a scheme that has been taken on by highly structured company groups such as ALIBABA. The Chinese e-commerce giant has employed hundreds of restaurant and karaoke bar workers mainly to help them prepare and deliver food products. And the practice has expanded at the rate of the epidemic.

AMAZON is getting LYFT drivers to work during the coronavirus.

In the United States, AMAZON announced in March that it was looking for 100,000 people to meet demands. The jobs are mainly in logistics and delivery. Jeff BEZOS’s company has gone one further by partnering with LYFT. It has offered the drivers from this private chauffeur service platform the chance to join its ranks to transport and deliver parcels and foodstuffs; and it includes a temporary wage increase of $2 per hour. It’s a win-win deal, especially as it is estimated that in the US demand for carpooling has suffered a nearly 20% drop since the start of the epidemic.

McDonald’s lends employees to Aldi.

In Europe, employee sharing has also started, particularly in Germany. For the lockdown period employees from 1,500 McDonald’s restaurants have been offered the chance to join ALDI discount supermarkets (over 2,400 outlets across Germany). Deployed in the logistics and supply centres, these McDonald’s employees have been hired under ALDI’s usual terms and will be able to return to their jobs under the Golden Arches at the end of the crisis.

What if employee sharing continued?

While it is still too early to measure the potential consequences of this unprecedented cooperation in retail, it is undeniable that it has already enabled food retailers to manage the situation at the same time as providing workers in difficulty with concrete and beneficial alternative support. It remains to be seen if this new form of flexibility will be required in future. For its part, the Chinese government, which has been won over by the initiative, is considering re-activating the process at peak consumer periods such as Singles Day (on 11 November) or Black Friday. It just goes to show that, even in the labour market, there will be a “before” and an “after” Covid19.

The Main Think:

Faced with both an unprecedented influx of customers and an increase in last-minute absences in its ranks, retail distribution has been able to rely on reinforcements from “shared employees” in some countries. It’s an unheard of collaboration between retailers that illustrates how everyone can “do their part” during a crisis.

Crédit photo : iStock, Lyft, Alibaba