Anxiety over
permanent hiring benefits staffing firms
By Heather Stur, of SBT
Companies that have sustained the damage brought by an economic downturn often
fear over-committing or growing too quickly once the economy rebounds. That
fear translates into outsourcing and cautious hiring, industry experts say.
Jessica Ollenburg, president of HRS
Inc., a Greenfield-based outsource firm specializing in human
resources, sees companies turning to outsource firms to deal with the
bottleneck that could occur when major growth happens after a slump.
Outsourcing is more cost-effective than hiring full-time staff because
full-time staff might not be needed once the bottleneck ends as growth levels
off, Ollenburg said. "A lot of organizations are taking advantage of the
flexibility of outsourcing rather than over-committing to their own internal
teams," Ollenburg said.
Additionally, as firms make decisions on hiring and promoting employees, they
often look to outsource firms for "expert advice" on restructuring
positions, writing job descriptions, hiring and training, Ollenburg said. For
smaller firms that do not have a human resources specialist on staff,
outsource firms provide expertise on an as-needed basis.
"In many cases, small businesses would be better off tapping into systems
that already exist through outsourcing, rather than spending the money to
build internal infrastructure," Ollenburg said. The relationship between
businesses and outsource firms doesn't necessarily end once a business is back
on track, Ollenburg said. Relationships are established, and outsource firms
often become daily resources for their clients. "There is never not a
need for external information," she said.
US employers remain cautious in their hiring intentions for the third quarter,
according to the latest Manpower Employment Outlook Survey. Even though the
16,000 US employers surveyed anticipate some job opportunities in the
July-September period, their hiring forecast has decreased since the second
quarter survey and has dropped lower than it was a year ago at this time.
"US employers are still void of the business confidence needed to
increase their employment projections for the third quarter," said
Jeffrey Joerres, CEO of Manpower Inc. "Employers have expressed
uncertainty in hiring intentions in recent Manpower Employment Outlook
Surveys, but this quarter represents the weakest job outlook in 12
years."
Of employers surveyed, 20% said they plan to increase hiring activity for the
third quarter, while 9% expect a decrease in job prospects. Sixty-five percent
of employers expect no change in hiring while 6% are uncertain of their
employment plans. When the seasonal variations are removed from the data, the
outlook is reduced to the lowest level in 12 years.
Employers in the construction, wholesale and retail trade, education, services
and public administration industries estimate that their third quarter hiring
activity will be the softest it has been in more than a decade. Hiring
prospects will be stronger in the finance, insurance and real estate
industries, according to the survey.
July 11, 2003 Small Business Times, Milwaukee
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