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Industry News

Emergence of the On-Demand Tradie Economy in Australia

New research studies by EY Sweeney and L.E.K. reveal the potential for growth in the residential trade sector, as tradies and consumers seek smarter ways to engage. Commissioned by hipages, the research reveals that digitisation of the trade sector is fuelling an ‘On-Demand Tradie Economy’ in Australia.

The On-Demand Tradie Economy represents an emerging digital revolution of the residential trade sector, which is fully optimised through technologies that streamline consumer-tradie connections, communications and job coordination.

Set to help 250,000 Australian trade businesses grow by easing their daily administration and helping them win more work, this new economy is equally driven by services that offer substantial relief to nine million households who need help managing tradies.

The On-Demand Tradie Economy is tapping into a lucrative market, with Australian households spending over $73 billion each year on trades. As estimated 70 million paid residential jobs were completed in the past year by Australian tradies, with an average of seven jobs completed by Australian households.

“Driven by millennials and younger Australians, innovative technologies are beginning to powerfully transform the way tradies and consumers conduct business,” said David Vitek, co-founder and CEO of hipages.

“This research showed market demand for digital services that optimise their engagements for a better smoother experience.

“Like the on-demand nature of food delivery and ride-sharing sectors, we’re seeing a similar movement in the tradie sector.

“The residential trades sector is a significant economic driver for Australia, with this research indicating the emergence of a new On-Demand Tradie Economy set to hyper accelerate sector growth over the coming years.”

43 per cent of Australians struggle to find quality, available tradies

Many Australians find it difficult to source reliable tradies, with almost half of the nation (43 per cent) claiming tradies are never available when you need them. Three in five consumers said they would find it useful to have a trusted third party that could connect them with tradies, indicating a strong market opportunity.

Tradies are bogged down in admin, sacrificing six figures per year

Time spent on administrative tasks has resulted in tradies passing up work. One in four tradies have given up jobs due to being too busy with admin; an estimated approximate annual value of $120,000 (total values vary by trade) in missed work. Tradies surveyed spend an average of 14 hours a week on quoting and general admin. Nearly 70 per cent of tradies agree that technological assistance can free up work time, including assisting with schedule management and reducing travel time between jobs (60 per cent).

Tradies are increasingly converting work online

Tradies indicate that more of their work is coming from online channels, in particular amongst younger Australians (under 45 years). Many expect this trend will only grow, anticipating that more of their work will come from third party providers such as hipages. Australian consumers echo similar sentiments, with 50 per cent saying they’re more likely to hire tradies online now compared to five years ago.

The rise of electronic word-of-mouth in tradie sector

Australians continue to base their tradie selection on trust, with word-of-mouth considered important as consumers rely on their personal networks (47 per cent). The majority of Australians (77 per cent) say they would like to see recommendations of tradies before hiring them, and tradies agree that standardisation of online feedback would be positive for the sector overall.

“Word-of-mouth has always been the traditional form of sourcing a tradie, trusting recommendations from friends and family, but the process can be slow and limited,” Vitek said.

“The same concept is now being adapted digitally to fasten the process, with online services such as hipages aggregating consumer recommendations, allowing tradies to build their online reputation.”

Aussies seek ways to easily manage the tradie process, from start to finish

There is growing appeal for services that optimise the customer-tradie interaction across multiple stages of the job, from job coordination to secure payments. The majority of consumers (51 per cent) have had experiences where tradies did not show up when expected to.

“Four in five Aussies feel stressed thinking about a repair or renovation that needs attending to,” Vitek added.

“Consumers want to be given control when finding, hiring and organising a tradie, and there are many ways technology can bring confidence to the process.”

Tradies seek administrative support from digital third parties

Similarly, tradies indicate that getting paid by customers and organising payroll and taxes are amongst their biggest sources of frustration. Almost seven in 10 tradies agree that there are major administrative efficiencies to be gained through technology.

“With ‘getting paid’ deemed the most frustrating part of their working life, utilising a third-party website for this task is an appealing proposition,” Vitek said.

“For tradies, the On-Demand Tradie Economy represents greater efficiencies across all facets of the working day, while eliminating their time spent seeking more work.

“At hipages, we are leading the way in the On-Demand Tradie Economy, with one job currently posted every 26 seconds on the platform.

“Tradies are reaping many benefits in the changing digitised landscape, gaining an average $23 return-on-investment with every $1 spent on our platform, while also enjoying greater work-life balance.”

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