Economic uncertainty is making everyone nervous. What does the future look like for your company – or your job? We don’t really know what will happen, who will be affected, or for how long. Still, employers and hiring managers have to be as prepared as possible because no enterprise can function without proper staffing.
Contract workers can help keep your business in play.
It’s a conundrum
Economic fluctuations are a fact of life, and every company that’s been around long enough has experienced cyclical growth and lulls. In some industries, it’s an expected annual occurrence. Staffing typically ramps up or contracts to reflect these peaks and dips.
But as serious words like downturn and recession swirl throughout the marketplace, companies across the board are focusing on protecting their cash flow. Headcount is often the first to take a hit. For the vast majority of companies, payroll is the largest single expense. Salaries, benefits, and related taxes can total as much as 70% of your budget. Unfortunately, layoffs or a reduction in force become a cost-cutting measure after other options have been considered.
Maybe your company has ordered a hiring freeze or even a reduction in full-time employees. When Mark Zuckerberg says Meta will cut back by 10%, you know businesses are serious about tightening their belts over the coming months.
But you can’t afford to sacrifice forward movement
And that’s exactly what will happen if your workforce “trim” leads to insufficient personnel or specific expertise to handle day-to-day operations.
Meta has well over 83,000 employees, so cutting 10% probably shouldn’t leave them dreadfully short-handed. Your company, though? Whether you have 25 staffers, a few hundred, or 1,000, a significant reduction could cripple your ability to function.
If you lose human power in critical areas such as IT – an area most companies are already struggling to staff – every aspect of your business will be negatively affected.
In addition, employee dynamics change if there’s a freeze or layoffs. News stories and rumors worry workers – will their jobs become redundant? Temporary or permanent, the prospect of layoffs can be so distracting that people can’t concentrate on their work. Your productivity is already at risk.
Contract staffing offers an ideal solution
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Business as usual
At any time, you can bring in skilled tech or other contract workers short term, to get things done while your hiring process is underway to fill a permanent position. With a hiring freeze in place, that delay is going to be a lot longer, with a worsening impact. That makes contingent labor all the more attractive.
Work continues so there is no slowdown in productivity. Projects underway can be completed as planned. You can proactively start a project that’s been on the shelf which could boost cash flow and competitiveness despite the slower economy.
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Ninjas in the workplace
They arrive for a limited engagement with start and finish dates. They work on a specific project with laser-like focus so you don’t lose valuable time to meet contracted deadlines or deliverables.
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Predictability and low risk
Contingent labor is a fixed expense that supports your company’s need for greater cost containment. There are no extra expenses for benefits or taxes. You can also avoid administrative time and expenses if you work with the right sourcing partner. Here at Power-4, we are set up to serve as your staffing partner for payrolling contractors, whether the individuals are sourced by us or hired directly by you.
Because this solution is so cost-effective and efficient, it’s easier to get budget approval. And there are no worries about the costs or other problems associated with making a permanent hire mistake.
Peripheral benefits
Highly skilled and experienced contingent workers not only get stuff done, but they also bring knowledge they can transfer to other staff. That could put your business in a stronger position for the future.
Ultimately, you can also keep the contract-to-hire option in your back pocket, converting contingent workers to permanent status (if they are interested) when the economy turns upward again. Meanwhile, contract staffing enables your company to stay number. That’s really the only way to successfully weather marketplace ups and downs, regardless of the reason.