Throughout the latter half of the 2010s, the US economy was booming, and job opportunities were plentiful. Generally speaking, everybody was happy. But in 2020, along came to a little thing called COVID-19.
The pandemic changed the trajectory of the world economy, and although the disease may be behind us (fingers crossed), the impact of the pandemic can still be felt. Currently, it is manifesting in the form of tough economic times. In addition to a falling stock market and fast-rising inflation, experts are predicting a short- to medium-term recession.
Understandably, companies are reassessing their talent strategy. However, employers aren’t purely focused on layoffs. Companies still have to make goods and provide services. Some companies have invested in long-term projects that cannot be abandoned. Because economic activities are still happening, many companies deal with volatility by using staffing agencies.
Staffing agencies can provide companies with a lot of workforce flexibility. Agencies can provide companies with the talent they need but without the associated costs, liability and commitment.
At the same time, job seekers seeing a tightening labor market are more open to working contract and temporary positions. Many people looking to advance their careers don’t want to wait until tough economic times have passed. For employers, this means more quantity and quality in the labor market.
Below are a few ways companies can benefit from using a staffing agency during tough economic times.
Staffing Agencies Help Employers Save Costs and Reduce Liability
Talent acquisition costs money, and employers can reduce these costs by hiring through a staffing agency.
When a company hires in-house, it must post a job opening and review dozens or hundreds of applications before talking to the first promising candidate. This costs time and money.
Agencies have large talent pools they can quickly tap into for their clients, eliminating many costs associated with an in-house hiring process. Rather than looking at a massive list of applicants, client companies only need to review the most promising candidates. This expedited hiring process also means the most talented candidates are less likely to opt-out of a slow-moving hiring process.
A staffing agency also helps companies minimize costs by letting them only employ people based on the amount of business they are conducting. Full-time staff are a big investment and reducing these employees is a much bigger decision than eliminating temporary staff.
There was also a higher risk associated with employing full-time employees, especially in difficult economic times. With these staff members, the company is responsible for workers’ compensation and liability insurance. Under federal law, companies are required to provide workers with family and medical leave, and this can be a risk if a COVID-19 variant were to quickly spread among the population. Most employers are also obliged to cover paid leave for their employees. By comparison, a staffing agency takes on these risks for temporary employees. A staffing company also covers payroll taxes and other costs associated with the employment of temporary workers.
Staffing companies also help employers minimize the risk of a bad hire. Through a temp-to-hire arrangement, companies can employ workers on a temporary basis and extend a full-time offer if the contract worker displays strong abilities and work habits.
Once a determination has been made on which positions must be full-time, a company should optimize its talent acquisition processes so that expenses are minimized.
Staffing Agencies Have a Bigger Pool of Qualified Talent
Usually, during a tough economy, employers may turn to temporary staff to bridge talent gaps created by layoffs. Top staffing agencies are constantly growing their database of potential candidates to provide their clients with the best-fit talent for temporary positions. The stop-gap talent provided by top staffing agencies, therefore, helps to maintain continuity during a downturn.
A temporary staffing company is also capable of providing more experienced candidates that are capable of having a strong impact in a short amount of time. These professionals can distinguish between thriving in a downturn and merely surviving it.
Over time, temporary staff can help a company switch to use more full-time staff as an economic recovery gets full swing. Many staffing agencies offer temp-to-hire positions. This allows a company to employ people on a trial basis and offer them a full-time job if they excel in their role. This approach is much better than posting to a job board and hoping for great applicants. In addition to being a more random approach, this method of scaling up a full-time workforce can take months, even years. Along the way, the road will likely be littered with bad hires.
As companies ramp up during recovery, staffing agencies can provide greater access to potential full-time employees, especially hard-to-reach passive candidates. These people are not actively seeking new job opportunities but could be open to considering an attractive opportunity.
HR recruitment teams understand the value of passive candidates because they tend to be highly qualified and experienced. They are also more likely to become long-term employees. If your company does not actively recruit passive candidates, it is highly restricting its talent search, especially for hard-to-fill important positions.
The easiest way to locate passive candidates is through a staffing firm. These companies maintain contact with a large pool of currently employed people. When your company partners with an agency, it gains access to this valuable talent pool, which likely holds your next outstanding employee(s).
Flexible Options for Uncertain Times
Economic downturns typically coincide with high levels of volatility, and companies must be able to scale up or scale down based on a short-term outlook. Some companies shift to project-based work, and when this happens, full-time employees provide less return on investment.
A staffing agency helps companies adopt a more flexible blend of full-time and part-time employees. Beyond the practical benefits of adjustable labor costs, flexible staffing offers several other advantages.
The flexibility a staffing company provides relates not just to quantity but also quality. Experienced employees with in-demand skills can be difficult to recruit. If a company shifts to more project-based work, a staffing company can quickly bring in any specialized professionals on a temporary basis. Once a project is over, these temporary professionals can be released to move on to something else.
A company that partners with a staffing agency is also better able to handle unforeseen events. If there is a sudden surge in demand or massive disruption in the supply chain, a staffing agency helps their client take developments in stride. The ability to quickly bring in temporary workers also helps with routine disruptions like employees leaving for paid vacation or taking time off for family matters.
This organizational flexibility also has knock-on benefits for employee retention. When employees have to work mandatory overtime week after week, it can be incredibly draining. Temporary workers can help to relieve the burden, keeping full-time staff from getting overworked. Employees also know they can take time off without causing major disruptions.
Increased flexibility and its associated benefits translate into a competitive advantage over companies with a more rigid approach to their workforce. If your company is better able to handle the upcoming economic downturn and your competition isn’t, you will have more opportunities to generate revenue and experience long-term growth.
Aim for a Single Staffing Agency
Two heads are better than one? The more, the merrier. These sayings may apply to many situations, but one of them isn’t working with multiple staffing agencies.
At first blush, it might seem like having multiple staffing partners is a good idea. Maybe it could help you find and onboard talent faster. However, managing a multiple-way relationship is usually more trouble than it’s worth.
Integrated processes, communication, and sharing performance metrics are all essential parts of an effective partnership between the staffing company and a client. When there are multiple staffing partners, it makes it more difficult to integrate processes and communicate. For example, multiple agencies might post the same job, possibly with different job descriptions. Something like this is counterproductive and could cause damage to a company’s brand.
There is also an issue of confidentiality. When a staffing firm partners with the company, the staffing provider gains insider knowledge of its client’s operations. The more staffing partners a company has, the more it risks disclosing sensitive information about its operations.
Finally, most staffing companies prefer to work exclusively with the company. If a company decides to take on one or more additional staffing partners, the original staffing partner will naturally perceive it as a slight, especially if they operate on contingency.
Partner with Top Notch Personnel for all your Staffing Services in Wichita, Kansas
Specializing in the aviation, construction, manufacturing, and call center industries, Top Notch Personnel, is dedicated to delivering laser-focused staffing solutions in Wichita, Kan.
We provide temporary and contract staffing; temporary-to-hire staffing; direct hire; and payroll solutions. We have also gained a sterling reputation for our knowledge, experience, speed of service, accuracy, integrity, and transparency.