A PACE Prediction: Northwest Companies Will Use More “Temps” in 2020….
There are TWO BIG REASONS why Northwest Employers will need more short term staffing solutions in the coming year!
#1. Washington State’s new Health and Parental Leave Act, which goes into effect January 1, 2020, is likely to create a significant increase in the number of core employees who will use their longer term leave benefits in 2020 – in many cases leaving significant gaps in the staff needed to keep work flowing!
This act, which is paid for by employers and employees via a dedicated payroll tax, allows all employees the opportunity to take up to 18 weeks of protected and partially paid leave for personal or family health issues or a parental opportunity to bond with a new child.
While employees have been able to take a “protected” leave since the Family and Medical Leave Act (FMLA) enacted in 1993, these policies were limited in their impact – touching only 60% of the working population. The Washington benefit requirement, on the other hand, was specifically designed to be inclusive. An employee only needs to have worked 820 hours (for any employer) in the prior 12 months to be eligible for this benefit.
While data has shown that only 16% of employees eligible for FMLA benefits used their leave benefit, because the Washington law adds a “partial pay component” the number of employees anticipated to request the use of this benefit could double. Many of our clients are already receiving requests for leave that will begin January 1.
The obvious impact of more employees using this extended leave benefit will be an increased strain on core staffing levels – gaps in the staff available for core work. Most employers will be looking for interim, flexible staffing solutions that will make sure their teams have enough staff to handle core work without increasing the pressure on the remaining staff to pick up the pieces when one of their core employees takes leave. We anticipate they will turn more and more to temporary staff as this “ideal” solution rather than adding more regular employees to their core group.
#2 Perhaps an even bigger driver of temporary staffing in 2020 will come from the uncertainties created by a divided political climate in an election year.
No question, the robust, hiring friendly economy we’re currently enjoying, is being fueled by a pro-business agenda. We’re all experiencing the impact of business-friendly taxation and regulations, with a larger percentage of Americans working than at any time in fifty plus years.
But the country is divided and If that pro-business agenda changes as a result of a change in either state or federal leadership, the impact on business and their willingness to invest in new jobs, could be significant. While companies don’t stop all investments in a wait and see year, they don’t place the same bets they’ve been making in the last three. For many election years, business decisions , particularly those related to investments in hiring and new staff, at best will be tempered, at worse, will be put off until the election period is over. We believe the 2020 election year will see that same level of uncertainty – this year that uncertainty may be on steroids.
No one is more sensitive to “uncertainty” than managers responsible for budgets and profitability. We’re already starting to hear employers “hedging their bets “ when it comes to staffing. Because my company, PACE Staffing Network, does both direct hire recruiting and temporary staffing, we are in a unique place to monitor staffing trends. While our last 2 years has seen a significant upturn in customers using our recruiting services to hire employees direct, we’re already starting to experience the signs that 2020 will be a year where shorter term, easily unraveled temporary staffing options, will re surface as the solutions du jour.
Its already starting to happen. Just last week we learned that a position that six months ago would have been filled with a candidate our client hired direct, will now be staffed by a long term temporary employee with an adjustable end date (“I need then for the next 3 months but then I’d like to see what the needs are.’ ) Hiring managers everywhere are finding what was once a simple “add to staff” approval is now a decision requiring CEO level approval.
Sound familiar? We guess it might.
The Reasons Why Temporary Staffing Is the “Right Solution” for the 2020 Business Landscape!
There are several reasons why we think the temporary staffing model is going to be an increasingly popular model for 2020…..
You can find and onboard temporary employees quickly.
When a key employee requests a 3 month leave, you don’t have a lot of time to change your core staffing model to accommodate that level of extended absence. While we’ve seen it take 2-3 months for an internal HR function to respond to staffing request, the decision to bring on a “temp” moves a lot faster. PACE, for example, will typically deliver a temporary employee within a few days of our client’s request plus do all the behind the scenes administrative processes that gets an employee ready to work and be paid.
The ability of a temporary staffing business model to respond quickly to business changes (i.e. uncertainty) and an unanticipated staffing need (ex. an 18 week health leave) is one of the main reasons that smart employers will chose temporary staffing solutions in 2020.
The “temporary” way of working has become a very popular way to work, making a new wave of high quality employees available for temporary assignment.
And in turn, a more strategic use of temporary staff – employees who move in and out of your workforce as the need requires, is now a viable alternative to building a workforce based exclusively on core employees.
You might be surprised by how many employees come to PACE asking specifically for temporary rather than direct hire work opportunities. These are highly qualified, seasoned employees who, five years ago, would only consider a “permanent” job and now prefer “temping” to support a different style of work-life balance.
The attraction of our fast-growing Northwest job market as created a large number of relocating employees who prefer to work in a series of temporary roles before they land somewhere permanent. Recent grads or “back to workers” often turn to interim jobs as a way to build their skills and the work experiences they can put on their resume before its time to settle into a longer-term commitment to one company, one job.
While it’s true that short term (1-10 day) temporary staffing options have all but vanished from the staffing landscape, there isn’t a shortage of high talent employees who can be screened for their ability to handle a client’s specific work challenges in assignments that targeted to last 1-6 months. These types of short term but impactful opportunities to make a difference are now seen as viable options for a younger group of employees who thrive on change.
The temporary staffing model is the “unencumbered” option….there’s no long tail on a decision to “hire a temp”.
You can reverse your decision at any time for just about any reason. No notice required. No severance.
If the temporary employee doesn’t meet your expectations and needs to be removed from their assignment, its PACE, not you, who deals with that change. For the employee, they simply move on to a new assignment.
If we must go back to the candidate marketplace to find a replacement, those recruiting costs are on us not you. If a temporary employee files an unemployment claim, the costs of that claim goes against us, not you.
If your business needs to change course quickly, we can assign a temporary employee to your work group who has the skills and expertise to facilitate that shift and then move on to other assignments.
If your business change requires you to reduce staff, you can end a temporary assignment quickly, to ensure the job security of your core employees. Smart employers know that when the business landscape is volatile or uncertain, it makes more sense to hire temporary rather than core staff to avoid PR risk of layoffs.
The popular temp to hire recruiting strategy not only assures quality hiring, but makes sure that you only hire when you are ready for a long term commitment.
There is considerable commitment and investment involved in the hiring of a core employee. Not only are you committing to honor pay, benefit and mandatory government costs, but also the costs you will to develop that employee into a core contributor.
And if it’s true that 50% of all hiring decisions end up being hiring mistakes, the temp to hire audition is one way to avoid the high costs of that statistic, ensuring that employee investment dollars are only spent on employees hand selected to receive that level of investment.
One of the benefits of the temp to hire staffing model is that employers can keep “auditioning” until they’re sure they need to hire and they’ve found “the one” – an ideal solution during extended periods of uncertainty .
Temporary employees are often the lower cost staffing solution.
Despite what you’ve heard about the costs of temporary employees, the overall costs of most temporary employees is often less than the “real costs” you would be paying for an employee hired direct. In case you haven’t noticed, the “true” costs of a core employee have skyrocketed over the last decade – higher payroll taxes, enhanced benefit packages, more time off benefits (some mandated) increased training and development costs, escalating costs of onboarding and compliance etc.
By the time you factor in all these core employee costs, a temporary employee is often the least expensive alternative. Unlike a core employee, you only pay for your “temp’ when they are actually working. The costs of recruiting, vetting, managing and training your temporary employee are costs paid by your staffing agency, not you.
For employers with 150 employees or less Washington state actually provides “grants” that can be used to hire temporary replacements for employees on taking extended leaves for medical or parental reasons. If you’re a “small” employer, our team will provide you with the guidance you need to apply for these grants..
As companies put together their staffing plans for 2020, there are several reasons why temporary staffing needs to surface as an alternative to the direct hire staffing that has dominated the staffing landscape for the last three years. 2020 is a time when smart Northwest employers will start to assess their staffing needs against short and long term objectives, in some cases opting for more shorter range solutions, fewer long term investments.
Full service recruiting organizations, like PACE, can offer employers with a unique advantage in that they can provide employees on a temporary basis who can be easily converted into direct hire roles when the time is right.
Want to hear more? Feeling the need to find the right staffing agency to help you with your temporary staffing needs? Call our Partner Solutions team at 425-637-3312 and we’ll be glad to help you get prepared for 2020.
PACE Staffing Network is one of the Puget Sound’s premier staffing /recruiting agencies and has been helping Northwest employers find and hire employees based on the “right fit” for over 40 years.
A 3 time winner of the coveted “Best in Staffing” designation , PACE is ranked in the top 2% of staffing agencies nationwide based on annual surveys of customer satisfaction.
PACE services include temporary and contract staffing, temp to hire auditions, direct hire professional recruiting services, Employer of Record (payroll) services, and a large menu of candidate assessment services our clients can purchase a la carte.
To learn more about how partnering with PACE will make a difference to how you find and hire the right employees, at the right time, and in the right way – contact us at 425-637-3312 or e mail our Partner Solutions team at firstname.lastname@example.org.