Reducing the Fear of the Fiscal Cliff

As the economy attempts to recover from the recent recession, industry experts warn of another economic storm brewing.  Contraction fears are looming as the Bush era tax cuts and President Obama’s payroll reduction are set to retire Dec. 31.  These tax cuts need to be addressed;otherwise economists fear the economy will stumble over “the fiscal cliff” into another recession.

“The fiscal cliff” would have serious repercussions for consumers and businesses, if not dealt with quickly. An already shaky U.S. economy might not be as resilient and cast a dark economic cloud over the global economy for the foreseeable future.

While the economic forecast is inherently murky, as a result of the “fiscal cliff” and global economic pandemic in Europe, it has not stopped executives from planning to hire this coming year.

According to a Korn/Ferry survey, “fifty-eight percent of executives surveyed by Korn/Ferry International intend to increase hiring at all levels across their organizations with the next 12 months.” The catch, however, is that organizations are waiting for a resolution to the “fiscal cliff” prior to making any major hiring decisions.

During times of economic uncertainty, business owners lean towards a contingent workforce, rather than making permanent hires.  The 2013 outlook for temporary hiring looks optimistic especially in the following segments: industrial, physician staffing, information technology, marketing, clinical/scientific and engineering.

It’s not just economic uncertainty that drives increased temporary hiring.  Anemic economic growth has resulted in a transformation to on-demand hiring practices by most corporations, as well as staffing and recruiting firms. Economists now believe that the gross domestic product for the U.S. economy will rise only 2.1 percent in 2013, down from the original 2.5 percent in May. All of this adds up to employers mitigating risk by using temporary workers throughout their organizations.

On-demand hiring allows companies to “find value in the transitory nature of this workforce in order to make quick staffing decisions as dictated by their fast changing business.”

The business model shift to on-demand hiring has been embraced by employees at an increasing rate. Employees understand that temporary hiring has finally become a standard business practice as all signs point to economic recovery as being an arduous road.

The good news is that employees are cognizant and accepting of the change.  Job seekers realize that temporary work is a great way to get a glimpse into an industry they are thinking about transitioning into without the old stigma about being a “temp.”

The one constant during times of economic instability is the fact that the staffing industry has always put people to work.  In the past, staffing and recruiting firms have been credited with fueling job growth while other industries were shrinking.

The recent years of uncertainty have made companies more accustomed to an on-demand workforce.  The success of temporary workers is a model that businesses will not be willing to give up, even after “the fiscal cliff” and other economic factors are resolved.

The structural change in how companies on board and retain its workforce, from top to bottom, is all within the realm of support that staffing and recruiting agencies now offer. Agencies are in unique position to support and guide the flexible lifestyles employees are leading as a result of the new normal in employment – on-demand hiring.

The staffing industry does not have the power to stop the fiscal cliff; it is the politicians in Washington that need to agree on a solution that prevents further economic strife.

However, staffing and recruiting firms do have the power to ease businesses feelings of economic uncertainty, while assisting employee’s transformation towards a new, flexible, on-demand style workforce – the new normal.

Tim Giehll

Tim Giehll
Tim Giehll is chief marketing and strategy officer at Bond International Software. He can be reached at tim (dot) giehll (at) bond-us (dot) com.

Tim Giehll

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  1. […] to a recent Staffing Stream article, “Reducing Fear of the Fiscal Cliff,” it’s not that employers don’t want to hire.  In fact, 58% of executives surveyed by […]

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