How contingent workers can solve production issues until the economy stabilizes Featured

11:38am EDT August 29, 2012
How contingent workers can solve production issues until the economy stabilizes

It has been three years since the recession was officially declared to have ended in mid-2009. However, even with that declaration, the national unemployment rate remains at more than 8 percent and full-time hiring is sluggish at best. There has been an increase in hiring during the years since 2010, but it has not been enough to replace all the jobs lost during the downturn.

“There is so much uncertainty surrounding such things as the cost of health care, taxes, foreign markets and the availability of capital, which has left many companies afraid to make full-time offers of employment,” says Melissa Hulsey, president and CEO of The Ashton Group. “The cost savings and increased flexibility offered by a contingent work force make this a silver lining in this economy.”

Smart Business spoke with Hulsey about using temporary employees to keep up production until market conditions stabilize.

What are some trends you’re seeing in the marketplace?

Small businesses — those with fewer than 50 employees — are reporting more growth and confidence than their larger competitors, and there has been a rise in salaries as recruiting and retaining skilled talent has become more competitive. However, the other side of the coin is voluntary turnover has risen as talented employees leave their jobs to look for better opportunities in the marketplace.

Additionally, because of the prevailing uncertainty in the economy, over the past several years there has been a steady rise in the use of contingent labor that is far outpacing full-time opportunities during the same time period. Historically this has been a leading indictor that full-time jobs also will increase in the future in as few as three to six months. However, that has not been the case recently. This new trend suggests that employers need additional labor to meet production demand but are not willing to make a long-term commitment to employees. Also the ratio of Americans actually working compared with those available to work recently has hit its lowest level since 1981.

How can contingent or temporary workers help companies keep up with production?

The use of a contingent work force allows production demands to be met without any strings attached. For example, all of the burdens associated with the hiring process, such as screening, initial interviews, payroll expenses, taxes, insurance and unemployment are the responsibility of the staffing firm. For the employer, it means a job can be filled quickly and efficiently to align its work force with its production needs.

How can staffing companies help an employer reduce its time-to-hire?

Staffing companies are in the business of placing candidates into jobs, so they are constantly recruiting and screening new applicants. In addition, most staffing firms have well-qualified individuals who they have worked with previously who can be available for new assignments. By having a pool of candidates who are pre-screened and ready for work it can significantly reduce the time it takes to have a position filled.

What cost savings can be realized by utilizing contingent or temporary workers?

On average, it costs $7,000 to hire and train one new employee. Many upfront costs such as recruiting, advertising, screening applicants, verifying credentials and initial interviews can be eliminated by utilizing contingent labor. In the long run, savings on health insurance, retirement and PTO can result in significant savings over hiring full-time workers using in-house resources. In addition, temporary labor can ebb and flow with production demands, further increasing savings and avoiding the blow to morale caused by laying off full-time employees when production has to be tapered off.

How much training should a company expect to put into a temporary or contingent worker?

When companies hire contingent workers, they need to train them for the job at hand. To make the most of the cost and time savings temporary labor offers, companies should streamline the training process for these individuals by defining exactly what they want their contingent staff to accomplish during a shift and train them with that end result in mind. Other than training for the specific job, address housekeeping issues with all temporary employees on the first day. Information on items such as parking, use and upkeep of the break rooms and bathrooms, and even where they can grab a bite to eat close by will not only make the new person more feel comfortable but save time as well.

How can a company ensure it’s getting the right worker for the job?

There are several key steps to ensure a temporary employee is a good fit with your company. The first is to choose the right staffing partner to work with. Choose a service provider that understands the needs of your organization, as well as one that makes it easy to establish an ongoing dialogue. The next step is to clearly define what you want to accomplish.

From there, a job description and position requirements can be written. The more detail you provide to the agency, the better its ability to qualify the best candidates for the opening. Job descriptions for your full-time positions also can serve as an excellent guide for your ‘part-time’ jobs.

Melissa Hulsey is president and CEO of The Ashton Group. Reach her at (770) 419-1776 or mhulsey@ashtonstaffing.com.

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