Getting people back to work is what our industry does. And SIA’s job is to provide content and data to keep you informed and stay ahead of the curve. This mission takes on a whole new meaning amid Covid-19. The staff at Staffing Industry Analysts are interviewing, writing, editing and curating information in the hope that we can help you make sense of what is happening in the world of work.
Economic Snapshot. The Conference Board Leading Economic Index last month posted the largest decline in its 60-year history. Economic activity in the US is off a cliff. The government is trying to contain the spread of disease while grappling with the effects the epidemic and the containment efforts are having on the economy . There have been enough layoffs and furloughs to wipe out employment gains from the decade-long recovery. Public staffing companies are withholding guidance given the uncertainty around the uncertainty of how and when state governments will ease stay-at-home restrictions.
Dangerous period. In a 2017 research report, John Nurthen, SIA’s executive director of global research, discussed how the most dangerous period for staffing firm is the end of a recession — the theory being as business begins to improve gradually, growing temp headcount can suck the cash out of the business at the time when staffing firms are in the weakest position to fund growth. Your expenditures are growing steadily in the form of temp pay but your receivables are not catching up. That makes it difficult for cash-strapped staffing firms to capitalize on the improving conditions.
Recovery tips. So what can staffing firms do to stay afloat? How can small and big firms ride out the crisis? In a recent Staffing Industry Analysts Executive Forum 2020 Virtual Experience session, SIA Director of Custom Research Tony Gregoire spoke with Shawn Poole, advisor and partner at Oak Street Partners, on how to react quickly to this recession, without going overboard. In addition, they discussed ideas on how to best position your staffing company for the recovery.
The fact is much is in flux. The session recommended checking the pulse of your business and forecasting weekly. And treading carefully when it comes to laying off staff. While you want to let go of poorly performing employees in any economic environment, be more cautious with high-performing employees. Crisis aside, these workers are hard to attract and retain. Following the Great Recession, for example, companies that had laid off strong performers lost market share in the recovery.
Experts recommend maintaining cash reserves including tapping loans offered in the current government stimulus package. If you have cash, see what you can buy on the cheap.
The Executive Forum North America 2020 Virtual Experience is a unique opportunity to gain strategic insights staffing CEOs and seasoned professionals on how to navigate this situation, among other topics. Get the best and most current content from over 25 sessions, including an industry playbook for responding to Covid-19, all on demand. Access is open for a year.
