The What’s and Why’s of Flexible Staffing!
Are You Ready to Add FLEXIBILITY to the People Side of Your Business?
Flexible staffing models have always been popular with Northwest employers, but after a period of robust hiring, the return to more flexible models of getting work done appear to be back in vogue. This blog is written to help our readers understand the reasons behind this trend, and offers 13 questions you can ask yourself to assess how ready you are to embrace staffing flexibility.
With the pandemic having turned so many businesses upside down, chances are your pre 2020 staffing strategies were deep sixed a long time ago. With many Northwest employers putting hiring plans on hold, 2021 saw employers busy finding ways to get more done with current staff. If you had to terminate or furlough employees at some time during the pandemic, you were probably looking for ways to build back your business without tipping over trimmed budgets. And today, with economic uncertainty the prudent description of the local economy, most prudent companies are looking for ways to contain all fixed costs, including their people costs.
If this sounds like what’s going on in your business, on your team, you’re not alone. Nor is this a trend unique to this particular period of economic downturn or uncertainty. Historically companies look for ways to leverage their people costs whenever revenues are volatile, whenever economies struggle. They choose to be prepared for all those things that go on in an economic environment they can’t control.
Traditional Staffing Models – the Ups and Downs!
Pre 2020, most Northwest companies were enjoying the predictability of robust growth. Manufacturing was emboldened; revamped tax structures provided companies with more dollars to invest on both infrastructure and people. And invest they did.
When enjoying a robust economic engine, companies often rely on simple staffing models. When a company grows they simply add people to their business mix. And if their growth is considered predictable, companies were willing to add people even before there is an actual need, creating employee safety nets that will never leave them short handed. Employers who use these traditional staffing models, tend to make hiring i.e. adding to staff, a knee jerk reaction to their business challenges. And when growth opportunities persist, companies can quickly get over staffed and overrun with staffing redundancies. Yes, this is the problem we are now seeing big time getting played with our technology companies.
There is nothing like a sustained period of growth to create organizational excitement – new employees get hired; current employees get promoted. Everyone is happy!
But when growth stalls, or the business changes, companies discover employees who are no longer needed OR placed into roles that either don’t fit their talents or are replicated elsewhere. Downsizings, right sizings are the next logical step – all the result of using a traditional staffing model based on unchecked hiring not smart staffing strategy. Organizations re-org, job descriptions adjusted, middle managers look for things to do. The business hunkers down because it has to.
We’ve seen that the end result of “right sizing’s” is to demoralize if not destruct the people side of even the best businesses, impacting the health of a business long after they waded thru their economic crisis.
Flexible Staffing Strategies – A Viable Alternative? A Better Way?
Employers who embrace flexible staffing models, on the other hand, manage growth, change, and the ups and downs of business cycles very differently. Flexible staffing strategies rely on a stable mix of core and non-core workers (not always employees) while using temporary resources to scale up or down in alignment with the company’s business needs.
The intent of flexible staffing models is to stay permanently right sized and limiting its fixed commitments to a key group of core employees.
Using a flexible staffing strategy, a variety of “flexible” workers are brought in to supplement the core workers. These workers may or may not be employed directly, and are often obtained thru staffing agencies like PACE Staffing Network or as self employed 1099 workers. Certain work that the organization needs done but not considered key to its mission is often outsourced, which allows the business to ramp up or down quickly without impacting internal resources.
The kind of staffing solutions that fall under the FLEXIBLE STAFFING umbrella are many and varied.
Handling short or long term workload changes using temporary staff instead of hiring direct, working with full or parttime independent contractors for special projects, using well thought out temp to hire recruiting strategies, or deciding to fully or partially outsource certain pieces of non-core work – are all examples of ways to engage people to get work done while containing your fixed costs and off loading the oftentimes hidden costs and liabilities associated with “being the employer.”
We think FLEXIBLE STAFFING solutions are based on a world view that change is inevitable and that the ability to adjust quickly is key to an organization’s survival. In our 45+ years of watching companies survive and thrive in all kinds of economic environments, we see a lot of truth in that world view!
Companies who use flexible staffing solutions earn a competitive advantage by being able to change quickly, keeping their resources in sync with marketplace needs, and constantly aligning costs and revenues. By deciding to outsource certain types of non critical work they not only reduce the costs associated with the employer role, they are able to mobilize the right talent at the right time. Core employees stay engaged with core work allowing them to stay engaged thru all economic cycles.
We have that a mindset built around flexibility can be contagious. Employees who value their own sense of personal flexibility can become very valuable and sought after by like minded employers. Employers who embrace flexibility as a business principle are very attractive to these flexible employees. As a side bar, they also do a much better job of protecting their core employees from unwelcomed lay offs and right sizings.
Have we got your attention yet? Wondering what it might take to introduce staffing flexibility to your organization?
13 Questions You Can Ask Yourself to Assess Your Readiness for Staffing FLEXIBILITY….
#1 How intentional are you about your staffing strategies – your plans to grow *or shrink” the people side of your business as your marketplace changes?
Now is an opportune time for your leadership team to be talking thru when, why, and how you might choose to bring on a temporary employee to fill a vacant role instead of hiring direct. Perhaps you could come up with a set of business principles you could use to decide what business scenario warrants what type of staffing solution. That’s what your larger competitors do regularly.
#2 Do you have a list of business functions or processes that would be good candidates to outsource rather than try to develop internally?
If you’ve had to scale back on some non-core staff recently, now would be the time to explore alternative ways to tap into the expertise and resources you need to run your business without developing that expertise in house. If your goal is to reduce your fixed costs, there are likely opportunities you could find to get work done faster, better, easier, and even at a lower cost using a vendor, not an employee.
#3 What percentage of your current worker population might be categorized as flexible?
While there is no magic number, if number of people doing work for your company totals to 15% or less of your total worker population, you are not likely as flexible as your most aggressive competitors. Ratios of core to non core workers vary both by industry and by company, but it is estimated that on average anywhere from 25-45% of the total worker population is involved in some form of flexible or outsourced work arrangements.
#4 What flexible staffing models do you currently use? What flexible staffing models do you need to learn more about?
As the number of ways you can put people to work in your organization grows, so does the importance of making good decisions about what models will work best for you.
- Are you using the popular temp to hire staffing model or do you only hire direct?
- If you hire direct, have you considering making some positions parttime rather than fulltime? There are lots of employees out there who left the workforce in 2020 and never returned because they learned the value of a different type of work life balance. Reconstructing some work to accommodate a part time worker is a great way to tap into this workforce. Cutting back the hours a part time employee is asked to works per week is a lot easier than cutting back an employee who is committed to full time employment.
- If you are a regular user of temporary staff you have a lot of questions to consider.
- How strategic are you being about how that staff is selected? managed?
- How do you set length of assignment…fixed terms or flexible?
- How do you manage your temps performance?
- Most importantly, is your temporary staffing provider the staffing partner you need…someone who doesn’t just take orders for staff but has ideas about how to use staff than can have a direct impact on your business.
- If you are not a regular user of temporary staff, how could you take advantage of the built in flexibility that a temporary employee has to offer? What beliefs or assumptions is getting in your way of using more temps rather than continuing to hire direct?
#5 Do you have a good handle on the rhythms of your business – the reoccurring high or low points of your workload based on time of year, month, or even week?
Some employers have made a science out of staffing their companies with core employees who fit the workload requirements at their lowest level, and then using a variety of temporary worker solutions to cycle staffing resources up or down according to business requirements. Our recommendation? Never assume there isn’t an employee out there who wouldn’t be glad to have a part time work arrangement that directly overlaid your business needs. Never assume that paying overtime or asking core employees to do more is either the easiest or the best way to handle re occurring business upticks.
#6 Do your current “staffing” vendors offer a full range of staffing solutions , or do you need to work with several vendors who only operate in specialized areas of staffing?
Your costs of managing vendors increases with the number of vendors you need to supply the right temporary employees to your business. Now would be a good time to explore different ways of working with your staffing partner to reduce the time and money you are spending on working with multiple vendors. (Ask us about our Network approach to vendor management)
#7 If you’re already a regular user of temporary or contract employees, what formal programs have you put in place to manage their contribution and the vendors who provide them?
Have you formalized your temporary staffing program or are you just going with the flow? Have you benchmarked how much you are paying per hour for these workers compared to what pricing might be available to your competition? Now would be a good time to do a competitive analysis of your current temporary staffing program and make sure you have the staffing partners you need to help you make the shift towards more flexible staffing solutions.
#8 How long is it taking you to hire a core employee? What is the impact to your organization for not being able to hire faster?
Are you leveraging the recruiting power of your temporary staffing agency partners who already know a lot about your business? The temp to hire auditioning model can make a huge impact on your organization’s flexibility strategy if implemented smartly. Workplace auditions are now a staffing norm, popular ways for both candidates and employers to test the waters before making the actual hiring decision. these models not only reduce your recruiting costs substantially, but also reduce the time to hire. And the good news is that in today’s marketplace, with employees eager to work, temp to hire recruiting strategies can be used with any level of employee, no longer confined to light industrial, call center or administrative staff. The temp to hire staffing model is staple for organizations committed to staffing flexibility.
#9 How carefully are you vetting the independent contractors that work for your company to stay in legal compliance?
While using independent contractors instead of hiring direct is still a way to preserve flexibility, these types of employees can also pose significant risks for organizations who are not vetting the worker’s “independent” status carefully. With the IRS hungry for revenues, now would be a good time to make sure your IC staffing solutions are compliant with IRS regs on when an employee can be considered independent and when they need to be classified as a W2 employee. If you haven’t already explored what is called Employer of Record services, offered by most staffing agencies, you may be exposing your organization to unnecessary risks that could be easily mitigated by an employer of record service agreement.
#10 Are there jobs in your company with excessively high turnover, requiring you to spend more time and resources than you would like to recruit and replace?
For teams of employees tasked with repetitive work such as in a call center or production environment, there are cycles in the employees’ normal curves of performance that can be managed just like any other business cycle. this is where using a flexible staffing strategy can provide huge benefit. Chances are you’ve already determined that the life cycle of these employees is not long and you’ve just become resigned to ongoing recruiting to maintain adequate staffing levels. But have you considered breaking up that life cycle into components that would lengthen the cycle? Building in a defined auditioning period? Making job change decisions at just the right time, just before the employee gets burned out on their repetitive work assignments? Do you know the right time to add new fresh employees to your team that will allow you to cycle out your high performing employees to other work when the time is right? Even in periods of high growth, flexible staffing can become the science you need to improve the productivity and morale of your team.
#11 When special projects come up, do you have people on staff with the time to staff those projects?
This is a trick question. While being able to assign employees to projects is a great way to give them a change of scene or the opportunity to add to their skill sets, if you have too many core employees with the time available for special projects, it may be a sign that your staffing plan has lost its flexibility. Flexible work models done well allow time for core employees to oversee or even directly supervise project tasks, but if it’s been too easy to staff your project work “from within” it’s time to take another look. Using temporary employees with specialized skills or unique work experiences to work on short term (1-6 month) projects that require focused attention and defined outcomes, represents the best in staffing flexibility.
#12 Are you currently launching a new technology or reconfiguring how some key work gets done?
This is the typical scenario that makes more sense to use a flexible staffing option rather than hiring direct as a way to experiment with a new work configuration or bringing in a new technology before an official launch. By using a temporary employee to explore a new way of getting work done, or to use specialized skills and expertise to help with a new technology, you are not just leveraging your current talent, but reducing the risk of having a new project go south. If the employee can contribute long term, they can be hired post launch. If you uncover the need to to create a new role to support new work processes, you’ve avoided involving a core employee in a job where they don’t have the talent to succeed.
#13 How do you look at the overall costs of people in your company?
Some companies make the mistake of looking at their employee costs differently than what they spend on their flexible workers – burying their costs of temporary staffing, for example, into an administrative category rather than assigning it to an operating budget. We think this is a mistake keeping companies from fully realizing their total costs of getting work done. Lately we’ve seen companies freeze their hiring budgets, while giving managers carte blanc to bring on temporary employees whenever and however needed. If the goal of these staffing practices is to force hiring managers out of their hiring model and to embrace staffing flexibility, I suppose these policies might work. If they get in the way of more thoughtful analysis of what staffing strategy works best under what conditions, we think its better to ask managers to defend their staffing decisions based on cost and performance, not policy.
NOTE: We also think it important for companies to train their hiring managers on the real costs associated with the hire of a core employee so they can make good decisions of what kind of employee they should use to do certain types of work. We’ve talked with enough hiring managers to know that the true cost of an employee is often a surprise and makes the comparison between an employees pay rate and a staffing companies bill rate more realistic. That most employee’s true costs are 60% or more higher more than direct pay can be mind boggling but shines a light on how important it is to make the right decisions about how you decide to get work done.
How PACE Can Help!
If you would be interested in learning more about flexible staffing strategies and the many ways you can use staffing flexibility as a competitive advantage, we would be glad to help you assess the current state of your staffing flexibility compared to other Northwest businesses. We can also suggest some ideas for incorporating more flexible staffing solutions into your current staffing mix.
Traditional staffing models have their place and will continue to be embraced for some time to come. But with so many factors in the economy suggesting ongoing uncertainty, now is the time for employers to think outside the box. We’re here to help!
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 45 years.
A 5-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.