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  • Writer's pictureNick Andriacchi

Staffing Stimulates The Economy

Stimulus, COVID relief packages etc. are in our vernacular when talking about the economy today. The common belief is that the only stimulus available involves the federal government (fiscal policy) using our tax dollars and The Federal Reserve (monetary policy) injecting money into the economy. While the country does need this type support currently, long term stability happens when new jobs are created.

What we never seem to read or hear is the words “staffing, stimulus and job creation” together. Staffing industry news tends to be negative. This is a shame because it’s the staffing industry that helps encourage or stimulates employers to start hiring again.

It’s important to remember that layoffs happen as a result of a bad economy. When new companies are created and the economy improves, temporary help workers tend to be hired back before permanent employees. It is natural and essential that staffing companies are on the front-lines stimulating the hiring process.

The Evolving Role of the Staffing Company

The traditional role of a staffing company is to match the right candidate with the right job. But its role has evolved. Staffing companies perform skills assessments, drug tests and background checks. They help candidates develop a career path, prepare for interviews, edit and or help write resumes.

“The staffing industry benefits so many individuals” says Pachia Paul of Logic Staffing, an independent staffing company located outside Seattle, WA. “A great example is the applicant who does not interview well and would be overlooked by a corporate recruiter in an ordinary interview or review of his resume. The same applicant can shine bright when going through a staffing service because their skills are noticed. In many instances, those employees are the perfect answer to your clients needs. Many times, they become a permanent employee! This is the satisfying piece of what we do.”

Stepping Stone to Permanent Employment

Some argue that temporary jobs are permanent low wage, no benefit type jobs. This is absolutely not true. According to American Staffing Association data, approximately 72% of temporary workers find a full-time job in less than a year while working with a staffing company. In fact, laid-off workers often use temporary employment as a bridge to a full-time position. Especially in periods of economic recovery, temporary positions may turn into full-time employment once the employer is ready to hire on a full-time basis.

Changing the Negative Bias

Staffing companies help change the corporate bias from laying off workers to hiring them. Organizations such as unions and government (in the forms of regulations) discourage employers from hiring workers. Why? Because their discussion ALWAYS revolves around raising costs without an increase in productivity to offset the costs. Almost any concessions business gives to these two groups typically results in layoffs of workers and continued deterioration of the economy.

The staffing industry offers the exact opposite. Potential employers have incentives to hire more workers to produce more goods and services. This helps stimulate the economy.

When a staffer meets with an employer, the discussion revolves around controlling costs, efficiency and providing flexibility while adding employees. Employers have the option of adding or reducing staff levels as economic conditions dictate. And when businesses have an incentive to spend capital to produce goods and services economic conditions start to improve. As discussed, staffing companies provide some of those incentives.

Small Business Job Creators

Independent staffing companies are an important component of jobs created by small business. According to the SBA over the last 20 years small businesses have created roughly 3 out of 4 net new private non-farm US jobs. As they help encourage employers to add staff, these small staffing companies in turn hire permanent internal staff to help fill the orders. Can we call this a “double shot” of stimulus?

Independent staffing companies have fueled and will help fuel new industries to flourish. Without the flexible, high quality staff that they provide, these industries would have a harder time growing. They were the ones that found the “purple squirrels” in the 1990’s that fueled the dotcom boom and established e-commerce as a preferred method of doing business. Currently, they are the ones that find the employees to fill the many open positions that are considered essential in manufacturing, non-durable goods, medical and IT industries.

During the great recession of 2008 - 2010, I saw temporary help stabilize in mid-2009 and were actually growing towards the end of 2009. This is well before any growth showed up in the national economic numbers.

During my almost 30 years in funding independent staffing companies, the economy has experienced many economic slowdowns. Independent staffing companies have led the way out of recession each and every time. While large national staffing (like most large businesses) companies cut compensation, close offices and lay off employees, independent staffing companies are out convincing employers to hire workers. And as economic conditions improved, our clients that actually help grow the market prospered.

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