There are inklings that the economy is coming back. Stocks are up -- slightly. Consumer spending is up -- a little. And, according to the American Staffing Association's (ASA) Staffing Index, temporary and contract job growth increased 25% from the beginning to the end of 2009. Growth in temporary/contract hiring typically indicates strengthening of the economy as it emerges from a recession, and employers generally begin hiring permanent employees soon thereafter. Which could have you thinking about beefing up your staff this quarter or next.
But wait! Before heading down that beaten path, you may want to consider how the business world has changed -- and how best to navigate hiring today.
Workforce flexibility is a success marker
In an article from Current Issues in Economics and Finance, two Federal Reserve Bank of New York economists noted, "Use of temporary or contract employees to smooth out labor needs has grown substantially ... Firms increasingly hire temporary help when they are busiest and then cut back when demand falls." This corresponds with the Bureau of Labor Statistics' projection that "Employment Services" (primarily staffing) will be the country's second-largest growth industry through 2016.
Looking deeper into the trend, a study published by Decision Sciences Journal back in 2001 (in the midst of our first recession this decade) found that companies that embrace workforce flexibility perform better. The study concluded, "Increased reliance on contingent (i.e., temporary and part-time) labor ... is associated with superior subsequent performance..."
But the good news is that flexibility benefits everyone: employees, employers and the economy at large. In a 2006 survey of staffing employees, the ASA found that a flexible work schedule was important to two thirds of respondents, and 88% would refer friends to work as temporary or contract employees. Below is a list of benefits the ASA has attributed to a flexible workforce:
- Flexible work schedule
- Hiring flexibility
- Labor market flexibility
- Variety of employment opportunities
- Access to specialized talent
- Lower unemployment
- Training; new skills development
- Opportunity to try out a variety of candidates
- Worker training
- Bridge to permanent employment
- Reduced trauma of layoffs
- Enhanced productivity
The advantages of flexibility came home to me in particular last year. A client had converted a number of Creatis employees to full-time employees for their in-house agency -- when the economy was strong. When the recession hit, they laid-off most of them. If the client had kept the employees as contractors through Creatis, they would not have had to go through the pain and expense of layoffs, and Creatis would have had the opportunity to redeploy them to other clients.
So, as the economy gains traction in 2010, don't hire -- keep your workforce flexible and your staffing resources ready.