As true in all post recessionary periods, Northwest Employers are likely to rely heavily on flexible staffing strategies during the next 6-12 months – the post covid BUILD BACK!

While Northwest employers have been in a frenzy to hire direct over the last five years, we believe that trend will abruptly shift to more flexible staffing strategies soon.

What are Flexible Staffing Strategies?

Flexible staffing, as the name suggests, includes the many ways employers can tap into the talents of an interim workforce without having to either hire direct or to commit to fixed schedules of work.   It is an important component of what is often an overarching set of strategies designed to shift a company’s fixed costs to variable – strategies key to survival in post recessionary periods.   When applied to staffing, the focus on flexibility means minimizing a company’s employer commitments to a small group of core employees who are augmented as needed by “non employed” staff.

In practice, flexible staffing strategies typically involve…

• An increase in the use of temporary or contract employees for projects, business upticks, and staffing re orgs .  By using third party staffing agencies for this special group of employees, employers can mitigate the costs of hiring, and the legal liabilities of an employee employer relationship.
• An increase in the use of temporary staff for temp to hire auditions – keeping a larger percentage of the workforce in auditioning mode, ready to be hired into core roles, but only when the time is right.
• A preference for part time/adjustable work schedules for more employees  – core and non core.  Includes a wide range of popular “flexibility focused benefits’ in exchange for salary increases, etc.  (ex. more work from home benefits, alternative scheduling etc.)        
• A preference for outsourcing any and all functions that require specialized expertise,  but involve work that falls outside an organization’s core competencies.

The Historical Roots of Flexible Staffing Strategies

With the publication of Charles Handy’s Age of Unreason in 1989, futurists in the 90’s were aggressively predicting  that high performance businesses would adapt staffing models that limited  hiring to include only a very small core group of employees who would be augmented from time to time by a variety of  temporary or  contract staffing arrangements and outsourced service providers.  These organizations were referred to as “shamrocks” – composed 33% of core employees, 33% of temporary or contract employees (always auditioning) and 33% of employees working in accordance with fully independent outsourcing agreements.

The rationale of these early models?  The 80’s styled futurists believed that to compete, companies would need to move quickly and nimbly, unencumbered by fixed commitments.  They also believed that growth strategies built on simply adding staff, would create both out of control cost structures and diminished performance.

For many tech companies flexible staffing was the staffing model of choice used prominently in the 90’s and still popular today.   With wall street paying attention to performance metrics like  “productivity per headcount” – high performance companies in multiple industries started looking for ways to keep their headcounts down while still doing all the “growth” stuff.    Instead of growing their core employee numbers as they scaled up products and services, they turned to a large number of temporary and contract employees and outsourced work agreements to support their growth.

Flexible Staffing Today

While the bold predictions of the 90’s, suggesting that temporary employees would become  33% of all workers in all industries, have never come true, when it comes to post recession staffing trends, employers have consistently shifted back to more flexible workforce models – each time increasing the percentage of interim employees in most workforces.

• During the extended build back between  2008 – 2013, the growth in temporary and contract roles grew 2-3 times faster than the rate of core workers.
• Many Northwest employers got a head start on the economic expansion by relying first on hiring from their temporary workforce.
• Many Northwest employees got their post recession jobs by being a temp first.

We think the post covid BUILD BACK will be one of those times when business uncertainty will drive a change back to a preference for more flexible staffing solutions. With downsizing strategies already in play and more to come, there is a lot of uncertainty about how the post covid BUILD BACK will look.  Will the recovery be an exaggerated U, a sharp V, or an elongated hockey stick?  Who knows for sure?  Not a lot of companies are willing to make hard investments in an  unknown future.

Uncertainty drives employers to prioritize staffing flexibility!

For staffing companies like PACE who provide both temporary and direct hire recruiting services, we see this trend up close and personal….

• When  the “available” workforce shrinks and employers need to offer something “more/better” to entice the talent they need, they tend to use our services to hire direct.  With their businesses growing, they have the confidence to increase their fixed commitments.
• When the costs of a core workforce are out of alignment with business needs, AND the available workforce expands, employers have a tendency to opt for more flexible staffing solutions – fewer fixed commitments, more focus on agility.

When the economic environment is peppered with uncertainties, as is the case now, the ability to contain all forms of fixed commitmegnts, staffing included,  becomes a business necessity.

The pragmatic reasons to turn to temporary and contract staffing models during periods of uncertainty haven’t changed…

• Temporary, contract and part time employees can be flexed up or down in direct alignment with business requirements or revenue cycles.  While traditional staffing models will simply adjust employee headcounts to match business needs, that model doesn’t work well in a volatile business environment where there are no sure bets.   A pattern of hiring, laying off and hiring again, can be disruptive while flexible staffing solutions are recognized for what they are – flexible.

• Having a component of your workforce in “flexible – temporary or contract” roles, makes it easier to retain your best people.  Using temporary or contract staff on an interim basis minimizes the downside to core employees for being over worked or being put at risk if a new venture doesn’t play out as planned.  When business is volatile there is often undue pressure on core employees to perform at exceptionally high levels for extended periods.   An occasional “temp” to pick up the pieces can be an invaluable morale builder.  And if  an organization launches a new product or initiates an organizational change, using a specialized team to kick start those initiatives, can be the hand up that core employees need.  If what’s new doesn’t go as planned, the contingent members of the specialized team can be disbanded or moved to other projects, while the core employee group is left unscathed.

• Temporary and contract employees represent specialized talent, experience and expertise you wouldn’t be able to develop internally in the time frames needed to move quickly.  Interim staff come in a variety of shapes and forms – but can be as skilled or experienced as you need.  Specialized temporary or contract employees can be identified and onboarded quickly, circumventing the much more rigorous direct hire recruiting or hiring processes.  We anticipate that during the BUILD BACK,  companies will be making many changes in their business strategies – sometimes with new products, sometimes with new ways of working.  Managers will have quick access to expertise they need to be able to turn on a dime.

• Temporary and contract workers free up your core employees to take on more challenging or complex work.  Even the work of organizing a new project can provide learning oportunities for core staff ready to take that next step up.  By bringing on highly skilled temporary workers new managers get to test their ability to lead without having to re create those skills on an existing team.

• Temporary and contract workers represent a pool of candidates for hire who will help you minimize hiring mistakes.  Northwest employers will continue need ways to tap into top talent….the post covid BUILD BACK will make that need even more ipmortant.  A  large number of temporary or contract employees provides a ready pool of candidates who are ready to be hired when the time is right.  These are candidates who have already proven their ability to contribute, their “fit” with your team.

• Most importantly, flexible staffing strategies help you SAVE MONEY!   Can’t say it often enough but when you increase your use of  temporary or contract employees you are basically turning what is typically a fixed labor cost into a variable cost.  Unlike your core employees, you don’t pay your temporary employees when they are not at work.   You can minimize the need for overtime, plus avoid the very high costs of recruiting and training.  If you’d like to compare the costs per hour of a temporary or contract employee compared to a core employee doing the same or similar work, check out our blog on that topic here.   

Bottomline, flexible staffing strategies enhance an organization’s ability to scale their staffing resources up or down in alignment with business needs, all while delivering a positive impact on the performance of your core employee group.  We believe these are the results Northwest employers will need over the next 6-12 months.

To check out how prepared your company is to embrace flexible staffing strategies check out our blog on that topic here.  

The PACE team has been helping organizations implement and improve their flexible workforce solutions for over 40 years.  We’ve seen companies who do it well, creating a competitive advantage over their less nimble competitors.  For more information about the right mix of interim and core employees for your team or ideas for implementing the right flexible workforce models in your work environment, contact us at 425-637-3312 or e mail our Partner Services and Solutions team at partnerservices@pacestaffing.com.