The latest employment data from some countries reflects that companies are not committing to long term hiring and are favouring short term contract and freelance hiring strategies.
The flexibility of gig economy hiring proved itself a life saver for many companies that needed to adapt to a new set of market realities, the likes of which had never been seen before due to the Covid pandemic.
This approach is again proving a very useful tool in helping companies navigate the choppy economic waters through which many are currently steering as nations around the world grapple with inflation, minimal growth, and low confidence.
Aligning headcount more closely with demand is an excellent approach, just as long as there is a good talent pool on which to draw from whenever there is a spike in demand.
A popular way of doing this has been to supplement a core permanent team of experienced staff with contractors and freelancers as required, in what is known as a ‘blended workforce’.
In the US job market, which has had a quite optimistic couple of years as the Covid recovery has led something of an economic bounce back, the experience hasn’t been quite the same, with the numbers of people in work at a 50 year high.
However, fears of a recession are looming and this is expressed through research data from Indeed which suggests that hiring for technology vacancies is down 55%, for the banking industry it has declined more than 40%, and for insurance, listings have fallen 18%, when compared to a year ago.
In such circumstances, it seems highly likely that the US jobs market will see a similar effect, with companies increasing short-term hiring to align headcount with the reduced demand that is likely to accompany the drop in confidence that comes with a downturn.
Data from some countries reflects that the shift to contract-based employment was an established trend long before Covid had even been heard of! According to the Australian Bureau of Statistics, the number of people employed on a contract basis has been steadily increasing over the past decade.
In 2010, around 9% of Australian workers were employed on a contract basis. By 2020, this figure had risen to almost 12%. This trend is expected to continue as businesses look for more flexible and cost-effective ways to hire employees.
There’s good news for the recruitment sector as none of this however, seems to be having too much of a detrimental effect on recruitment businesses.
Survey findings from S&P Global showed that in the UK, the trend for companies looking to hire more short-term staff has pushed up agency temp billings growth to a seven-month high, while permanent staff appointments shrank at the fastest pace for more than two years.
To make sure you maximise returns from your agency temp and contract hiring activities, it’s essential to tackle inefficiency and optimise back office processes.
ETZ’s leading timesheet and invoicing solution streamlines the back office processing of your recruitment agency. Our complementary solutions, ETZ Comply for onboarding and document management and Caspian for business intelligence give agencies further capability to streamline and uncover opportunities. To find out more, call us on 0800 311 2266 or book a demo.
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