Given the shift in both local and global economies, which is causing increasing uncertainty, many companies worldwide are re-evaluating their staffing practices to better navigate the new challenges. One potential solution that has come to the attention of HR leaders and hiring managers is flexible staffing. This approach aims to optimize talent and maintain competitiveness in the face of change.
Recently, the gig economy has emerged as a popular form of flexible staffing, largely thanks to the growing prevalence of remote work. This shift in working preferences has made a wider variety of skilled professionals available than ever before in history. As the economic outlook remains uncertain, many companies are seeking to reduce fixed costs, including labor expenses, by as much as 50%.
In this blog post, we will explore the extent to which flexible staffing and the gig-based economy can help businesses contain labor expenses and improve their bottom line.
What Is Flexible Staffing?
Flexible staffing is a strategy in which companies employ contingent workers to meet evolving business and operational challenges, rather than hiring permanent employees. Contingent workers include contractors, independent freelancers, gig workers, and agency-provided workers, and are not on the company's payroll.
Unlike casualization, this approach is not a permanent, uncertain situation for the employee - contractors are brought on for a specific period of time to empower operations and are well aware of the conditions. work with different clients in order to protect themselves from the risks associated with relying on a single contract. In some cases, they may also have a full-time job and offer their services on the side during their personal time.
As the traditional model of hiring full-time or part-time employees gives way to more gig-based work arrangements, staffing agencies have become more important than ever in responding to companies' changing needs. This allows businesses to quickly increase or decrease their staffing levels in response to fluctuations in demand without lengthy hiring processes.
Employers who embrace flexible staffing models manage growth, change, and the ups and downs of business cycles differently. They rely on a stable mix of core and non-core workers, often obtained through staffing agencies, and use temporary resources to scale up or down in alignment with their business needs. These workers may or may not be employed directly, but are crucial to helping companies remain agile and competitive in a rapidly changing economy.
Benefits of Flexible Staffing
Flexible staffing has become an increasingly popular approach for companies looking to optimize their talent and improve their bottom line. Here are some of the benefits of this strategy:
Costs Savings
Hiring staff only when you need it and when you know you'll have more income is an effective way to maintain a lean budget and get a better return on your investments. By doing so, you can avoid paying for empty desks and reduce training and turnover costs. Additionally, you won't have to let anyone go when demand slows down.
Productivity
Flexible staffing can also increase productivity by providing businesses with access to a wider pool of talent. By hiring contractors and freelancers who specialize in specific areas to work on specific projects, companies can benefit from their expertise without having to invest in training or long-term employment.
Scaling up and down fast
A flexible staffing strategy allows a business to rapidly scale up or down in response to demand avoiding the usual months-long recruitment processes. Contractors are usually able to get started on projects immediately and don’t expect to be terminated without either a notice period or severance package. This enables businesses to avoid the costs and risks associated with over- or under-staffing, ensuring they always have the right resources in place to meet their needs.
Adapting to economic uncertainty
The economic climate can be unpredictable, and businesses that are rigidly structured can struggle to adapt. Flexible staffing allows companies to quickly respond to changes in the market, such as shifts in demand or economic downturns, by adjusting their staffing levels accordingly.
The growing gig economy
The traditional model of working a 9-to-5 job for one employer is becoming less common as the workforce shifts towards the gig economy. A Monster survey conducted during the COVID-19 crisis found that 57% of workers would take some kind of gig job while they are in between jobs, and 52% would like a long-term contract with flexible hours. This means that the pool of professional candidates looking to work on a flexible contract has never been bigger. A bigger market also means a wider variety of fees.
Flexible staffing challenges
There are some challenges involved in hiring contractors for short-term work. For example, it may be more difficult to create a company culture with non-permanent staff coming and going, and onboarding processes may need to be adjusted. Most of the time staffing agencies manage these challenges by preselecting candidates who culturally fit your in-house team, conducting pre-selection training, and helping during the onboarding process.
Try Out International Staffing
Hiring in South America offers several key benefits for North American companies. One of the biggest ones is cost savings. According to a recent study by Deloitte, companies can save up to 70% on labor costs by offshore outsourcing work to South America. This is due to the lower cost of living and more affordable labor rates.
Also, many South American countries have a large population of bilingual speakers, with English being a widely spoken language in business settings. This makes communication between North America and South American workers seamless, allowing for a more efficient and effective workflow. Moreover, the culturally similar environment of both regions enables a seamless merge between both teams, fostering a collaborative and integrated working relationship.
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Kevin Mitchell, CPA
Senior Manager and CPA with over 20 years of experience in accounting and financial services, specializing in risk management and regulatory compliance. Skilled in managing audits and leading teams to deliver exceptional services. Proud father of two.
References: Gordon, J. (2021, March 23). Trend: Businesses are Choosing Flexible Staffing in 2021; Here’s Why - Accurate. Accurate. https://www.accurate.com/blog/trend-businesses-are-choosing-flexible-staffing-in-2021-heres-why/
How a Staffing Agency Provides Flexible Solutions to Improve Your Bottom Line - LeadingEdge Personnel. (2018, September 10). LeadingEdge Personnel. https://www.leadingedgepersonnel.com/how-a-staffing-agency-provides-flexible-solutions-to-improve-your-bottom-line/
Bennett, S. (2020, December 7). The What’s and Why’s of Flexible Staffing! PACE Staffing. https://www.pacestaffing.com/the-whats-and-whys-of-flexible-staffing-strategies/
