T here’s no crystal ball. In fact, tracking economic predictions is like being in a room full of bouncing, rubber balls. To start out the year, the Congressional Budget Office issued their report that hinted at signs of an economic slowdown. Yet more recently, the GDP data tells a different story that points to a solid economic forecast for 2019. The ongoing trade war further complicates a firm’s ability to accurately predict the future. Fact or fiction, we all read the news and each week we see headlines of polarizing perspectives. Businesses have no choice but to get ahead and prepare for this unpredictability before it impacts their talent engagement strategies.
So, what do we mean by “impacts?”
Again, we’re no fortune tellers, but employers need to be keenly aware of these effects:
- A downturn in the economy may have an impact on the size of your workforce and force a slowdown in hiring.
- The gig economy, comprised of 57M workers and $864B in spend, continues to rise as workers want more flexibility and control of their own career destiny – sometimes through multiple sources of income as Independent Contractors (IC’s). people self-categorize as diversified workers with multiple sources of income, and experts predict a 51% increase in freelance workers by 2027.
- Attracting and retaining top talent is becoming more competitive when workers are unsure of company culture and job security in confusing economic times.
- Fixed costs associated with employee wages are often the largest line item in a company’s budget, and anticipating workforce fluctuation can be difficult to predict and plan for.
- Historically low interest rates and a diminished appetite for economic intervention restrict the government’s ability to react to the inevitable changes in the nation’s economy. The problem is that you don’t know when or how bad it will be.
In a period of uncertainty, companies who want a competitive advantage should focus on creating operating flexibility and variable cost structure in your workforce. It’s possible to decrease your fixed cost by reducing your fixed workforce, through moving toward a project-based, gig-based talent strategy.
This can be done in a number of ways:
- Partner with staffing firms to recruit and connect you with highly-skilled specialists needed for project-specific work
- Direct source and create an internal talent pool of candidates with a variety of skills and expertise
- Manage and re-engage proven, known talent for project work
- Fill your talent funnel with external providers who have a bench of highly qualified experts (i.e. SMS and talent cloud providers)
- Manage all new hires through an external payrolling partner during their probationary onboarding period
- Engage experts in your market as Independent Contractors (ICs) either directly or through a Freelance Management Systems. But do so safely to ensure you avoid the risk of misclassification
- Restructure your talent model so that project-based roles are managed through your payroll provider as contingent workers
Don’t forget technology plays a strategic role too!
You must build an agile workforce to compete and succeed in an on-demand world. Talent-based workforce engagement and digital transformation allow you to:
- Manage people like talent, not like a spend category
- Expand talent sources
- Augment human talent acquisition skills with human-centric, AI-based tools
- Unlock the power of your workforce data
- Optimize your employee and non-employee mix
What are the benefits of these options?
- Provides cost savings on employee compensation and overhead
- Allows employers and workers to ‘try-before-you-buy’ and helps ensure a good fit for culture and skills
- Creates a pathway to attract the growing number of gig workers who want flexibility
- Provides employers on-demand access to specialized skills
- Minimizes liability, regulatory procedures and overhead costs associated with adding and removing employees
- Promotes a healthy culture and protects employer brand
- Avoids potential layoffs; mitigating loss of productivity and intellectual property
It’s not all doom and gloom. Optimize your variable and fixed workforce to get ahead.
The bottom line is, with an uncertain economic future in the United States, you can’t let this stop you from engaging top talent, and you can’t let it drive top talent away. Finding a partner to engage your valued workers as W-2s and providing them with exceptional support and benefits, helps to protect your employer brand reputation. It also protects your workforce and keeps them happy and productive, while insulating you from employer compliance risks and liabilities. An effective strategy can become a fundamental competitive advantage in the market.
TalentWave can help
TalentWave exists to transform the world of independent work. We believe talent is the new “competitive advantage.” We live at the center of the independent workforce ecosystem: enabling clients to self-source talent, engage them quickly and safely, with full oversight of process and cost. We empower our clients to leverage this new talent dynamic, making the complex seem easy while relieving the burden of compliance, and opening creative avenues for talent. Learn more at talentwave.com