How temporary staffing can help withstand the impact of a recession
It's indisputable that we live in economically uncertain times. As Forbes explains, following the global economic crises caused by the COVID-19 pandemic, many experts believe another shattering recession is on the horizon. A study conducted by Morgan Stanley in June this year found that two-thirds of American consumers are planning on decreasing their spending over the next half-year owing to the increasing inflation rates.
Consequently, businesses are bracing themselves for impact. Employers across the world have already felt the effects of mass employee layoffs once and are anxious about the possibility of continuing to run their operations as usual should they need to let go of employees en masse again.
Luckily, temporary staffing could be the solution that alleviates their fears. Econ Focus for the Federal Reserve Bank of Richmond reported that after the 2008 economic collapse, temporary staff accounted for over 25% of America's workforce, keeping businesses across the nation afloat.
Should another recession hit, temporary staffing will once again become essential in helping companies withstand its impact. Here's why:
The gig economy
As Market Brew explains, we've already seen a mass shift toward freelance and part-time work in the last two years. An increasing number of skilled employees (including those at a senior level) are choosing "gig" work over the traditional, full-time, 9-5 working style. This implies that should another recession strike, many employees will already be willing to work in temporary positions, meaning that there will most certainly be an increase in temporary staff. Furthermore, because even highly experienced workers are turning to temporary work in higher numbers, companies won't need to be concerned that the temporary staff they hire aren't able to complete work at the same level of quality as permanent employees who have been with an organization for longer.
Reduced costs
Owing to the nature of temporary work and freelance employees, employers who make use of part-time staff aren't expected to provide benefits such as healthcare packages and retirement annuities to the same degree (or any at all) that they'd have to give full-time staff, Although freelance workers may be paid more on an hourly basis than permanent employees, organizations can save on overhead expenses and, in a recession, every penny counts.
More hands on deck
Advisor Perspectives notes that most employees work on a full-time basis — 83.7% to be exact. However, according to HRD, many people take on extra work to make ends meet during recessions when living expenses begin skyrocketing. Consequently, businesses can expect highly trained people who are prepared to work for them on a part-time basis in addition to their regular permanent positions. Accordingly, employers can rest assured that they'll be able to enjoy the benefits of hiring well qualified workers without blowing their budget.