ShiftPixy, Inc. provides payroll and related employment tax processing, human resources and employment compliance, employment related insurance, and employment administrative services solutions for its business clients (clients or operators) and shift work or gig opportunities for worksite employees (WSEs or shifters). As consideration for providing these services, the company receives administrative or processing fees as a percentage of a client's gross payroll. The level of the company's admin...
ShiftPixy, Inc. provides payroll and related employment tax processing, human resources and employment compliance, employment related insurance, and employment administrative services solutions for its business clients (clients or operators) and shift work or gig opportunities for worksite employees (WSEs or shifters). As consideration for providing these services, the company receives administrative or processing fees as a percentage of a client's gross payroll. The level of the company's administrative fees is dependent on the services provided to its clients, which ranges from basic payroll processing to a full suite of human resources information systems (HRIS) technology.
The company has built an application and desktop capable marketplace solution that allows for workers to access and apply for job opportunities created by its clients and to provide traditional back-office services to its clients, as well as real-time business information for its clients' human capital needs and requirements. The company has designed its business platform to evolve to meet the needs of a changing workforce and a changing work environment.
The company has built its business on a recurring revenue model. The company's focus has been to monetize a traditional staffing services business model, coupled with developed technology, to address underserved markets containing predominately lower wage employees with high turnover, including the light industrial, food service, restaurant, and hospitality markets.
The company's primary focus was on clients in the restaurant and hospitality industries, market segments traditionally characterized by high employee turnover and low pay rates. The company began to develop its HRIS platform in 2017, including its front-end desktop and mobile smartphone application to facilitate easier WSE and client onboarding processes, deliver additional client functionality, and provide enhanced opportunities for WSEs to find shift work. Beginning in March 2019, the company transitioned the development of its mobile smartphone application from a third-party vendor to an in-house development team and launched an early version of the application several months later. As of August 31, 2019, the company had completed the initial launch of its mobile application and it started to provide some of the HRIS and application services to select legacy customers on a pilot project basis. During Fiscal year ended August 31, 2022 (Fiscal 2022), the company's technology development efforts focused on supporting its growth initiatives with features, such as bulk on-boarding, job matching intermediation, and qualified candidate pool vertical market integrations.
The company's cloud-based HRIS platform captures, holds, and processes HR and payroll information for its clients and WSEs through an easy-to-use customized front-end interface coupled with a secure, remotely hosted database.
Beginning in January 2020, the company operated under a traditional staffing services business model, coupled with developed technology, to address underserved markets in the restaurant and hospitality industries, predominately consisting of lower wage employees with high turnover. At the same time, the company continued its prior efforts to expand its services into other industries that utilize higher paid employees on a temporary or part-time basis, including the healthcare staffing industry.
Staffing Solutions
The company records gross billings as revenues for its staffing solutions clients. The company is primarily responsible for fulfilling the staffing solutions services and has discretion in establishing price.
EAS Solutions / HCM
EAS solutions and Human Capital Management HCM (human capital management) revenues are primarily derived from the company's gross billings, which are based on the payroll cost of the company's worksite employees (WSEs) and an administrative fee and f eligible, WSE can elect certain pass through benefits. WSEs perform their services at the client's worksite.
Services
The company's core business is to provide regular payroll processing services to clients under an employment administrative services (EAS) model in addition to individual services, such as payroll tax compliance, workers' compensation insurance coverage related services, and employee HR compliance management. In addition, in November 2019, the company launched its employee onboarding and employee scheduling functionalities to its customers through its mobile smartphone application. In 2021, the company began to operate under a direct staffing business model.
The company's core EAS are typically provided to its clients for one-year renewable terms. The company's staffing services are typically provided to its clients under recurring revenue contracts with one of its subsidiaries. The company provides solutions to businesses struggling with compliance issues primarily by absorbing its clients' workers, whom it refers to as WSEs (as well as shift workers, shifters, gig workers, or assigned employees). WSEs are included under the company's corporate employee umbrella as traditional employees who receive W-2s and are entitled to participate in a full array of benefits that it provides as part of its services for its clients. This arrangement benefits WSEs by providing additional work opportunities through access to the company's clients. WSEs further benefit from employee status and access to benefits through the company's plan offerings, including minimum essential health insurance coverage and 401(k) plans, as well as workers' compensation coverage.
Technological Solution
The onboarding feature of the company's software enables it to capture all application process related data regarding its assigned employees and to introduce employees to and integrate them into the ShiftPixy Ecosystem. The mobile application features a chatbot that leverages artificial intelligence to aid in gathering the data from workers via a series of questions designed to capture all required information, including customer specific and governmental information. Final onboarding steps requiring signatures can also be prepared from the HRIS onboarding module.
The company's HRIS platform consists of a closed proprietary operating and processing information system that provides a tool for businesses needing staffing flexibility to schedule existing employees and to post open schedule slots to be filled by an available pool of shift workers (the ShiftPixy Ecosystem).
The company uses artificial intelligence (AI) to maintain schedules and fulfillment, using an active methodology to engage and move people to action. Included in this scheduling component is the company's shift intermediation functionality, which is designed to enable its WSEs to receive information and accept available shift work opportunities at multiple worksite locations. The company's embedded AI is designed to monitor and accelerate the matching of WSEs with gig work opportunities. The company's system monitors the capabilities of each WSE based on their work experience, needs, and training and provides messaging to clients and WSEs. The system matches worker requirements, such as hours, position, and pay rate with client requirements, such as experience, pay offered, hours offered and both employee and employer ratings.
Markets and Marketing
The company's products and services are designed primarily to help from the small to large sized businesses thrive in the gig economy by providing a legally compliant means to fulfill their staffing needs.
The company's initial marketing efforts focused on small and medium sized businesses struggling to find and maintain workers in the gig economy. In particular, the company has targeted the restaurant and hospitality industries, which are characterized by high turnover and often use independent contractors to perform less than full-time gig engagements, primarily in the form of shift work. A significant problem for these businesses, along with many others in a wide variety of industries, involves compliance with employment related regulations imposed by federal, state and local governments.
Strategy
The company's recent growth initiatives incorporate lessons learned from the COVID-19 pandemic and are designed to utilize its technology in a manner that maximizes growth and profitability. The ultimate success of the company's business model depends upon the entry of significant numbers of WSEs into the ShiftPixy Ecosystem through placement on its HRIS platform.
ShiftPixy Labs
In 2020, the company announced the launch of ShiftPixy Labs, which includes the development of ghost kitchens in conjunction with its wholly owned subsidiary, ShiftPixy Ghost Kitchens, Inc. Through this initiative, the company intends to bring various food delivery concepts to market that will combine with its HRIS platform to create an easily replicated, comprehensive food preparation and delivery solution.
Research and Development
The company incurred research and development costs of $0.3 million for the year ended August 31, 2023.
Competition
Competitors to the company's HRIS platform include businesses such as True Blue, Inc., Kelly Services, ManpowerGroup, and Barrett Business Services.
Intellectual Property
The company has registered seven trademarks, consisting of three names (ShiftPixy, ZiPixy, and ShiftPixy Labs) and four logos (the Pixy image, the Pixy wings image and wings/name logo, and the ShiftPixy Labs logo). In addition, the company has patents pending for certain features of its mobile application in the United States, Australia, Brazil, European Union, India, Japan, Korea and Hong Kong. The company has other intellectual property and related rights as well, particularly in connection with its software.
Governmental Regulation
The company sponsors certain employee benefit plan offerings as the employer of its shift workers under the Internal Revenue Code of 1986 (the Code) and the Employee Retirement Income Security Act of 1974 ("ERISA").
The manner in which the company manages protected health information (PHI) is subject to the Health Insurance Portability and Accountability Act of 1996 (HIPAA), and the Health Information Technology for Economic and Clinical Health Act (the HITECH Act). The company's health plans are covered entities under HIPAA, and it is therefore required to comply with HIPAA's portability, privacy, and security requirements.
The company is subject to Federal and state laws and regulations regarding privacy and information security. For example, the California Consumer Privacy Act of 2018, (the CCPA, which went into effect on January 1, 2020), affords consumers expanded privacy protections, including individual rights to access, to require deletion of personal information, to opt out of certain personal information sharing, and to receive detailed information about how personal information is used.
History
ShiftPixy, Inc. was founded in 2015. The company was incorporated under the laws of the state of Wyoming in 2015.
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