Corporate executives across the country are painting a bleak picture of the U.S. economy’s immediate future. In the latest Conference Board Measure of CEO Confidence survey, 126 CEOs were asked to describe the economic conditions they expect to face over the next 12-18 months. Their response for Q4 2022 – a score of 32, down from 34 in Q3 2022 – was the lowest measured since the Great Recession. (A reading below 50 reflects more negative than positive responses.) Moreover, nearly every C-suiter surveyed – 98 percent of participants – indicated they are currently preparing for a U.S. recession. (A full 99 percent said they are preparing for a European Union recession.)
At the same time, only 19 percent of CEO respondents reported an increase in consumer demand over the past three months. Even as inflation eases and the Dow shows signs of life, we appear to be a long way off from the sort of rebound that ensures companies anything resembling even short-term economic stability. Given those dark forecasts, companies need to be prepared for the worst. Yet even in a less-than-favorable business climate, they also need to keep the wheel of progress turning, responding to new clients and new opportunities as they arise. Enduring through the downturn is commendable, but real growth comes from preparing during the downturn to capitalize on the upswing. That requires thoughtful planning and a strategically deployed workforce – specifically contingent labor help.
Can Contingent Labor Help During a Recession?
What a difference a year makes. It was only months ago that companies were scrambling to fill positions, as the worst of the pandemic began to subside, with the “reopening” of the country fueling consumer demand and prompting the rebuilding of workforces across countless industries. Today, many businesses are already making preparations for a looming recession by trimming payroll, or at least identifying areas for future downsizing.
Companies can never fully insulate themselves from the realities of the global economy. But there are ways to mitigate risks and still maintain access to the talent necessary to at least maintain operations in the short term – and, when the time is right, begin growing them again. It starts with a healthy pipeline to qualified contingent labor.
During previous recessions, the permanent placement business has been impacted much more harshly than staffing. Essentially, that’s because hiring full-time staff requires a more binding (and expensive) commitment than bringing aboard contingent workers. Even a company that scales back its workforce and learns that it cut too deep can find opportunity in contractors, who can quickly bring stability to operations without forcing a business to commit payroll, health care benefits, retirement contributions, and unemployment insurance over the long term.
How to Best Deploy Contingent Labor in 2023
If your organization is among those contemplating the structure of their workforce, a sweeping reduction of headcount – even one conducted strategically, based on salaries and value creation – likely isn’t surgical enough. It’s important to check closely under the hood of the company, identify the skills and competencies necessary for current and future operations, and outline the demands of any green-lit strategic projects on the horizon. Only then can the optimal makeup of your organization be determined.
At that point, a comprehensive plan to fill key skill gaps can be put together. Typically, that plan will include tapping contingent labor, a resource that offers companies on-demand access to specialized talent. Companies can be creative in deploying contractors for certain short-term tasks (example: a tech team charged with an organization’s enterprise software deployment) without creating a lasting infrastructure or committing long-term resources. Contingent labor allows businesses to plug holes and support projects at a lower risk than hiring full-time staff. Take a closer look at the PeopleCaddie platform to learn how our talent cloud can quickly connect you with some of the best contractors available in your industry.
Is your company taking steps to ready for a potential recession? Contact PeopleCaddie to gain more insight as to how our contingent labor force can help provide stability during a potential economic downturn.