President & CEO of OpTech, LLC
For the last several months, leaders have been scrambling to recession-proof their businesses, preparing for the worst. Many analysts expect a relatively mild and short recession. Despite the depth and breadth of whatever recession we may encounter, talent frequently becomes a major topic of conversation when it comes to the future. Should we be scaling up and down? Workforce planning is not new to most of us, but with the right sourcing strategy and competitive analysis, companies can insulate themselves from the harshest climates.
Being in the talent acquisition and development industry, I am frequently asked about the benefits companies see from working with a recruitment firm and hiring contingent labor. Here are 4 reasons why it is important, especially as you recession-proof your business:
- Flexibility: Contingent workers allow you to respond to market needs and demands, as they happen. These employees are familiar with working in varying locations, for different personality types and for short or long term projects. As a result, they are typically more focused on completing the job at hand. It allows the firm to scale up and down as needed and determine if there is a long-term job requirement in a function.
- Reduced long-term labor cost: A major advantage to hiring contingent workers is significant cost savings. When a company hires full-time employers, a lot of its financial commitments go towards expenses such as: Worker’s compensation and unemployment insurance, social security and Medicare, payroll taxes, income taxes, employee benefits, etc. When companies hire contingent labor, they only need to be compensated for the number of hours they work on a particular project. In a recession, this reduces financial strain and frees up cash flow.
- Highly skilled: Contract employees typically have a very specific skillset and are accustomed to performing on very niche projects. Having a highly specialized individual on your team can really help to drive your business forward.
- Shorter hiring process: Recruiting firms are experts in finding niche talent and moving them through the hiring process.