Staffing firms respond to a tight economy with new services
Activity levels in the staffing industry are usually a leading indicator of economic changes. Because of that, when staffing firms across Canada saw business slump last year, the industry predicted an economic slowdown six months ahead of the first serious declines on Bay and Wall streets. A drop in demand for contingent, temporary and contract workers is a clear sign of troubles ahead.
The staffing industry can also foreshadow economic recovery and the good news is there are definite signs of renewal.
Rapid unpredictable spikes and falls in the staffing industry are early indicators of recovery and a number of spikes translated into a rise in permanent placements early in the new year, says Carol Gilchrist, Adecco’s director of operations for Canada.
However, in recent months most members of the Association of Canadian Search, Employment and Staffing Services, which includes direct-hire, executive search, as well as temporary and contract staffing services, felt the pinch of a sputtering economy. The fallout was reflected in reduced orders, an aversion to long-term commitments on the behalf of employers and a need for staffing industry firms to be more diligent when reviewing customer credit history.
Employers cautious
Uncertainty has translated into an increase in temporary staffing activity, says Paul Christie, president of Unique Personnel Services, in the national firm’s Dorval, Que. office. There has been “a drop in the permanent placements and an increase in orders for temporary and contract positions because clients are cautious about making long-term commitments,” he says.
In Western Canada, Barbara Premdas, president of bp Floater Staffing Inc. in Calgary, has observed a similar degree of wariness.
“Although business is buoyant in Alberta, there is a cautious overtone,” says Premdas. “In the past, clients would usually place orders for temporary positions with a generous duration and a somewhat flexible end date. These days, companies are specifying short durations, with definite end-to-end dates and a minimal likelihood of extensions.”
In many cases the intention is to convert “ideal fits” to full-time staff — once they are confident of their business’ future. These employers are hedging their bets by trying before buying.
Economic uncertainties have also forced staffing firms to exercise a new level of vigilance when monitoring a customer’s financial status — particularly when the staffing firm may be financing a client company’s payroll for an extensive period.
“Many companies are facing a cash crunch but need to understand that payroll payments cannot be extended,” explains Christie.
Some sectors and regions buoyant
Despite the overall poor performance of the economy, some sectors and regions have flourished and staffing companies have seen a high demand for a range of skill-sets, in particular the oil and gas industry in the West and on the East Coast, trucking and rail in Quebec and financial services throughout the country. In some cases, the economy has also opened opportunities for the staffing industry and encouraged innovation.
In Halifax, Laurie Fisher, area manager, Atlantic Region, Kelly Services, says, “The exploration of oil and gas fields in Atlantic Canada has fuelled a steady demand for people to fill engineering, accounting and clerical positions. The oil and gas sector has given staffing firms an opportunity to help clients build the requisite infrastructure to support the drilling and refining that did not exist in the past. It has paved the way for thousands of new jobs in areas such as payroll, benefits administration, health and safety, accounting and food services. Staffing firms were given the opportunity and secured the business to find, recruit and hire people to fill many of these newly created positions.”
Aside from the oil and gas boom East Coast staffing firms are being kept busy with the consistent demand for call centre staff. During the late 1990s the staffing industry was busy helping call centres located in New Brunswick and Nova Scotia find and attract volumes of recruits for a relatively new and expanding industry. Even though the economy has slowed, the high turnover within call centres and service expansions mean staffing firms are constantly refilling seats.
Value-added services
As outsourcing HR and other functions gains prominence as a cost-effective and high quality solution for companies to deal with non-core business functions, many staffing firms have also innovatively expanded services. Some of the value-added services now offered, particularly to clients that have already bought into the concept of outsourcing non-core functions, include employee screening, third-party testing and evaluations, payroll and benefits administration and training.
Various small-market staffing firms have also integrated other complementary businesses, such as outplacement, resume development and leasing of full-service office suites, into their offerings.
In some cases, clients have decided that if a staffing company can perform these services as a bundled offering, they can also provide them as one-off services, as well. Increasingly, these clients are purchasing testing, training and other expertise from staffing firms in addition to full staffing services.
For many staffing firms that offer training, business is brisk. Christie says his firm has experienced a steady demand for training in safety procedures, quality systems and MS office applications. “Clients are seeking training to both retain employees and ensure long-term productivity from them.”
Every economic downturn causes companies to re-evaluate business procedures to find cost reductions. While the potential of Web-based applications has been exaggerated, the value and effectiveness of online recruiting cannot be denied and staffing firms across the board have adopted it as a productivity enhancement and cost-cutting tool. Most staffing firms operate their own sophisticated online job boards, as well as using mega-boards, such as Workopolis and Monster, and they know which niche online employment boards to use for specific skill classifications.
Steve Jones is president of The People Bank and president-elect of the Association of Canadian Search, Employment and Staffing Services, the national voice for the employment, recruitment and staffing services industry in Canada. He can be reached at [email protected].
Staffing as an economic barometer
Recently, many staffing industry firms have found that permanent hiring decisions were delayed in September and October and shifted to late November, December and January as 2002 budgets were signed-off and decision-makers regained confidence.
This is good news for Canadian job creation and the staffing industry. It is also indicative of the rapid spikes and falls typically seen as the economy struggles to rise from the bottom with recovery on the horizon. If the staffing industry’s performance is a six-month early indicator on the economy, then the analysts are probably correct with their predictions of a Q3 and Q4 return to prosperity in 2002.
The staffing industry can also foreshadow economic recovery and the good news is there are definite signs of renewal.
Rapid unpredictable spikes and falls in the staffing industry are early indicators of recovery and a number of spikes translated into a rise in permanent placements early in the new year, says Carol Gilchrist, Adecco’s director of operations for Canada.
However, in recent months most members of the Association of Canadian Search, Employment and Staffing Services, which includes direct-hire, executive search, as well as temporary and contract staffing services, felt the pinch of a sputtering economy. The fallout was reflected in reduced orders, an aversion to long-term commitments on the behalf of employers and a need for staffing industry firms to be more diligent when reviewing customer credit history.
Employers cautious
Uncertainty has translated into an increase in temporary staffing activity, says Paul Christie, president of Unique Personnel Services, in the national firm’s Dorval, Que. office. There has been “a drop in the permanent placements and an increase in orders for temporary and contract positions because clients are cautious about making long-term commitments,” he says.
In Western Canada, Barbara Premdas, president of bp Floater Staffing Inc. in Calgary, has observed a similar degree of wariness.
“Although business is buoyant in Alberta, there is a cautious overtone,” says Premdas. “In the past, clients would usually place orders for temporary positions with a generous duration and a somewhat flexible end date. These days, companies are specifying short durations, with definite end-to-end dates and a minimal likelihood of extensions.”
In many cases the intention is to convert “ideal fits” to full-time staff — once they are confident of their business’ future. These employers are hedging their bets by trying before buying.
Economic uncertainties have also forced staffing firms to exercise a new level of vigilance when monitoring a customer’s financial status — particularly when the staffing firm may be financing a client company’s payroll for an extensive period.
“Many companies are facing a cash crunch but need to understand that payroll payments cannot be extended,” explains Christie.
Some sectors and regions buoyant
Despite the overall poor performance of the economy, some sectors and regions have flourished and staffing companies have seen a high demand for a range of skill-sets, in particular the oil and gas industry in the West and on the East Coast, trucking and rail in Quebec and financial services throughout the country. In some cases, the economy has also opened opportunities for the staffing industry and encouraged innovation.
In Halifax, Laurie Fisher, area manager, Atlantic Region, Kelly Services, says, “The exploration of oil and gas fields in Atlantic Canada has fuelled a steady demand for people to fill engineering, accounting and clerical positions. The oil and gas sector has given staffing firms an opportunity to help clients build the requisite infrastructure to support the drilling and refining that did not exist in the past. It has paved the way for thousands of new jobs in areas such as payroll, benefits administration, health and safety, accounting and food services. Staffing firms were given the opportunity and secured the business to find, recruit and hire people to fill many of these newly created positions.”
Aside from the oil and gas boom East Coast staffing firms are being kept busy with the consistent demand for call centre staff. During the late 1990s the staffing industry was busy helping call centres located in New Brunswick and Nova Scotia find and attract volumes of recruits for a relatively new and expanding industry. Even though the economy has slowed, the high turnover within call centres and service expansions mean staffing firms are constantly refilling seats.
Value-added services
As outsourcing HR and other functions gains prominence as a cost-effective and high quality solution for companies to deal with non-core business functions, many staffing firms have also innovatively expanded services. Some of the value-added services now offered, particularly to clients that have already bought into the concept of outsourcing non-core functions, include employee screening, third-party testing and evaluations, payroll and benefits administration and training.
Various small-market staffing firms have also integrated other complementary businesses, such as outplacement, resume development and leasing of full-service office suites, into their offerings.
In some cases, clients have decided that if a staffing company can perform these services as a bundled offering, they can also provide them as one-off services, as well. Increasingly, these clients are purchasing testing, training and other expertise from staffing firms in addition to full staffing services.
For many staffing firms that offer training, business is brisk. Christie says his firm has experienced a steady demand for training in safety procedures, quality systems and MS office applications. “Clients are seeking training to both retain employees and ensure long-term productivity from them.”
Every economic downturn causes companies to re-evaluate business procedures to find cost reductions. While the potential of Web-based applications has been exaggerated, the value and effectiveness of online recruiting cannot be denied and staffing firms across the board have adopted it as a productivity enhancement and cost-cutting tool. Most staffing firms operate their own sophisticated online job boards, as well as using mega-boards, such as Workopolis and Monster, and they know which niche online employment boards to use for specific skill classifications.
Steve Jones is president of The People Bank and president-elect of the Association of Canadian Search, Employment and Staffing Services, the national voice for the employment, recruitment and staffing services industry in Canada. He can be reached at [email protected].
Staffing as an economic barometer
Recently, many staffing industry firms have found that permanent hiring decisions were delayed in September and October and shifted to late November, December and January as 2002 budgets were signed-off and decision-makers regained confidence.
This is good news for Canadian job creation and the staffing industry. It is also indicative of the rapid spikes and falls typically seen as the economy struggles to rise from the bottom with recovery on the horizon. If the staffing industry’s performance is a six-month early indicator on the economy, then the analysts are probably correct with their predictions of a Q3 and Q4 return to prosperity in 2002.
