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Staffing in an Economic Downturn

August 24, 2022
min read
Michael Vaynerman

In response to the evolving challenges of today’s global economy, light industrial organizations are quickly turning to more flexible staffing solutions. Leveraging a flexible staffing strategy helps HR professionals and hiring managers to streamline and optimize their talent acquisition — maintaining productivity and customer satisfaction throughout economic stress. Read on to learn more about the need for flexible staffing arrangements in the modern workplace, and why you might consider working with a dependable partner to implement workforce-as-a-service solutions moving forward.

What Is Flexible Staffing?

Flexible staffing is essentially the use of temporary, contingent workers to fill specific talent needs within a company. This alternative to hiring permanent employees doesn’t require direct recruitment, hiring, payrolling, or administrative management. Instead, an employer can take advantage of flexible staffing — hiring temporary employees, independent contractors or other contingent skilled professionals — to fill staff vacancies and optimize their use of labor throughout uncertainty. 

The need for a flexible staffing solution has skyrocketed as a result of the unprecedented economic environment that businesses in the light industry are facing today. In fact, by 2050 an estimated 50% of the U.S. workforce will be made up of freelance or contingent workers, per a report from ADP. 

The Need for Flexible Staffing Solutions Amid an Economic Downturn

The pandemic encouraged companies across the globe to think more strategically about the composition of their workforce. However, the elastic hourly workforce trend has only accelerated as organizations navigate an economic downturn. What does the state of the economy look like today?

  • Inflation is continuing to rise, with the core inflation rate predicted to be 4.1% in 2022. Sustained inflation will quickly result in a continuous rise in broad business costs — which typically includes wage inflation. Considering research from Paycor that found labor can comprise as much as 70% of total U.S. business costs, business leaders must be attentive to the impacts of rising inflation. 
  • The EIA's energy outlook through 2050 predicts rising oil prices. An increase in oil prices inevitably discourages the supply of other goods due to the increased cost of producing them. 
  • Real gross domestic product (GDP) decreased at an annual rate of 0.9% in the second quarter of 2022, following a decrease of 1.6% in the first quarter. As GDP slows down or continues to be negative, the fear of recession grows — which impacts multiple facets of your business. This can lead to layoffs, declining business revenue, decreasing consumer spending and a rise in the cost of hiring new workers. 
  • Rising interest rates have persisted. As interest rates rise, both businesses and consumers are anticipated to cut back on spending. This has a considerable impact on your organization’s sales and revenue. 

While these economic concerns continue, inflexible staffing solutions aren’t effective at keeping pace with uncertainty. Ultimately, a static workforce:

  • Can’t meet variable demand quickly or efficiently.
  • Significantly increases overhead costs.
  • Can’t effectively meet organizational goals in the modern workplace. 

As a result, 83% of executives reported an increase in the usage of contingent labor and other flexible staffing solutions to meet business objectives, according to an Oxford Economics survey.

Advantages of a Contingent Workforce in the Light Industrial Industry

As businesses across the light industrial industry increasingly take advantage of contract workers or other temporary staffing solutions, they stand to see a host of valuable associated benefits. These include:

  • Improving resilience and flexibility: In today’s economic environment, adaptability and resilience are the cornerstones of a successful business — and flexible staff can improve these traits. In fact, 2020 saw 76% of human capital leaders use flexible staffing solutions to build a more resilient workforce.
  • Ensuring customers stay satisfied: A staffing solution that can flex to meet variable demand successfully will ensure productivity and output are consistently high — which will prove essential in keeping customers satisfied and loyal long term. 
  • Saving costs long term: Labor costs associated with permanent employees are both costly and static. Employing a contingent workforce can help your organization save significantly on unnecessary overhead costs amid uncertainty.
  • Maintaining productivity and efficiency: Under and over-staffing throughout fluctuating demand leads to inefficiencies and wasted resources. Flexible staffing ultimately makes you more productive and efficient by allowing you to better match staffing levels with workloads. 
  • Improving access to skilled workers: Taking advantage of flexible staffing gives organizations access to a larger pool of skilled workers — benefiting short-term projects that necessitate specific skills or qualifications.

Introduce an Elastic Hourly Workforce With Bluecrew

As the economic downturn continues, organizations need more flexible labor solutions to keep pace with uncertainty and variable demand — and Bluecrew can help.

Bluecrew’s innovative workforce-as-a-service approach was designed to support businesses as they address unique labor challenges — across market conditions. With Bluecrew’s powerful management technology at your fingertips, your organization can introduce and take advantage of flexible staffing solutions with ease.

Contact Bluecrew and start working with our Crew Members today. 

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