How Temp Staffing Can Reduce Labor Costs in an Economic Downturn

Worried about what will happen with the economy in 2023—and how that will affect your business? You aren’t alone. Employers across the country are feeling the effects of the economic downturn and wondering how to cut costs and increase profits in the face of an increasingly gloomy economic forecast.

Since employment costs can account for as much as 70% of total business costs, it pays to examine workforce investment. Are overtime costs through the roof? Has demand slowed, leaving full-time employees without enough to do? Or is business booming, creating a strain on stretched-too-thin teams and frustrating loyal customers? It’s essential for any business to stay optimally staffed in order to have happy customers and a healthy team—but they also need to make every penny count by having the right people in the right roles for the right amount of time.

If your company needs to reduce labor costs while maintaining peak productivity, temporary contract staffing can have many advantages.

What is Temporary Staffing?

Temporary staffing services allow businesses to hire talented, skilled individuals for a contracted period of time. The contract or temporary employees can carry out the duties of a regular employee and even report to the same supervisor. They can help businesses keep up with increases in demand, cover vacations, meet production goals, and hit critical project deadlines—without adding to overhead employment-related investment. Since temporary employees leave their position when their contract expires, you’re only committed to them working at the company for a short period of time. In some cases, a temporary or contract employee may be a great fit for a team to complete a special project or assist with an absent team member. Many staffing agencies also offer temp-to-hire employment arrangements if a business wants the opportunity to bring a temporary employee on as a permanent part of a team after an initial trial period. Temporary staffing services are a great way to add flexibility to your workforce while reducing costs and increasing efficiency.

How to Save Money with Temporary Staffing Services in a Recession 

Whether or not we’re in a recession remains unclear, but companies that hope for the best but prepare for the worst have the most optimal chance of thriving in the uncertain economy. How can you save money with temporary staffing?

Reduce Payroll Costs with Temporary Employees

When times are tough, many employers reduce their direct staff to the core level needed to maintain productivity—and then supplement their employment needs with temporary or contract talent. This ensures the company isn’t paying for fully compensated employees when they don’t have the revenue to support them. Payroll administration, workers’ compensation, and unemployment taxes for fully compensated employees can add up quickly, so if your business only needs extra help for a short time, you might be better off hiring temporary team members. For those employees, the staffing company covers the extra employment costs of temporary talent, creating breathing room in labor budgets.

Benefits Packages are the Staffing Agency’s Responsibility 

Employment-related benefits can account for up to 30% of overall labor costs, making fully compensated employees a significant investment. When you partner with a staffing company, they are the employer of record and provide benefits for their employees. When you hire temporary workers, benefits like medical, dental, and life insurance coverage aren’t your responsibility since the employee is not officially part of your company.

Free Up Internal Resources with Outsourced Talent 

Have employees taken on responsibilities that are outside their job description or training? That can be great if the individuals are excited about professional development and have the aptitude for the task. However, when people are overwhelmed with extra responsibilities because they are covering for absent colleagues—or a company is understaffed—these individuals can burn out or become resentful. Overworked employees make more mistakes, which can lead to accidents, injuries, or expensive errors. If the situation continues long-term, they may even choose to leave the company, creating employment-related replacement costs.

Hiring temporary contract employees can ease the strain on teams—and free them up to do what they do best. Temporary workers can handle the routine, lower-level tasks that take time but little effort while your fully compensated employees accomplish the higher-level work that matches their skills and pay rate.

Access Specialized Skill Sets Cost-Effectively 

Need a consultant or skilled tradesperson for a short-term project? Working with a staffing company gives companies access to talent that can get the job done without commitment to the annual salary and benefits investment a permanent employee requires. By hiring a specialized contract worker who is an expert in the area needed, the work will be done well—and it will be worth the investment of bringing in an expert.

Benefits of Temporary Workers in the Light Industrial Industry

Light industrial staffing companies can provide a pool of skilled employees to fill a variety of production, manufacturing, warehouse roles, and more. Most light industrial jobs don’t require extensive education or certifications, making the industry a great entry-point for young workers looking for their first job or more experienced workers looking for a career change. While each company has different processes and products, many of the skills within the industry are transferable. Temporary employees with similar work experience will often be faster and easier to train, saving your hiring managers time and money.

If your manufacturing business has fluctuating staffing needs that can be difficult to predict, consider the following benefits of light industrial temporary staffing:

Hire Qualified Light Industrial Candidates Faster 

Finding the right person for a job can be challenging—especially if the role requires special training or experience. Light industrial staffing companies have access to a network of specialized recruiting teams who can find the right people for jobs faster than you could working alone. Recruiters are often experts in their industry. They get to know the skills, experience, and work ethic of their employees, making it easier to find the right fit. Experienced recruiters can also provide insight into candidates’ backgrounds and work histories to ensure you’re getting reliable workers who align with your company values.

Maintain Productivity with a Full Workforce

Unpredictable business patterns can lead to under and over-staffing, creating inefficiency, lost opportunities, and wasted resources. By keeping a close eye on business demand—and staffing up and down when needed—your business will become more productive and efficient. Core team will have the help they need, allowing them to perform jobs well with fewer mistakes.

Leveraging temporary workers can increase productivity in another way. Because they are hired to perform a specific job for a pre-determined period of time, they often bring a higher level of focus and attention to accomplishing their assigned tasks—and are less distracted by other things in the workplace.

Build a Network of Temporary Light Industrial Workers 

We won’t always be worried about a recession. History has taught us many times that things will turn around. Will your business be ready to grow when the economy improves? Partnering with a staffing company to keep your workforce flexible during uncertain economic times makes it easier to grow when your business picks back up again. With an established talent network, you can rebuild a workforce quickly—and it may even be with identified high-performing temporary light industrial workers you’d love to put on your company’s payroll.

Leverage Temporary Staffing Services in Minnesota and Beyond with Doherty

Looking for qualified, hardworking light industrial, office, or professional talent? Whether you need one worker or a hundred, our temporary staffing agency in Minnesota can help you staff up for a busy season or access specialized skills for a challenging project. When you need to hire the right person fast, contact Doherty. Our employment experts will help create a proactive staffing strategy to help your business thrive—now and in the future.