Trends in Contingency Staffing and Business Continuity: What Decision Makers Today Need to Know

Does Your Company Have A Plan For Business Continuity?

No matter what industry your company is in or what specifically your business does, one of your primary goals as a business executive is to maintain business continuity. As long as workers stay on task and at specified production levels day in and day out, revenue versus costs are relatively predictable and can be better controlled.

Sometimes this is easy, and it appears that operations produce at maximum levels almost effortlessly, and nothing goes wrong. At other times, there are planned or unplanned threats to continuity that need to be addressed quickly. Perhaps a tornado is heading for your region and your facilities need contingency plans if the worst should happen. Maybe the threat is a human one - such the breakdown of contract negotiations and possible labor dispute - and you need to plan for temporary personnel in order to reduce the risk and achieve needed business objectives.

In any event, a key aspect of business success is knowing how to maintain continuity at all times. This challenge is often misunderstood or overlooked. It’s critical that executives put plans in place to reduce risk and possible downtime, no matter what the cause.

What Business Continuity Really Means

There's a common tendency among businesses to conflate "business continuity" with "disaster recovery," but the two are very different in reality, according to CIO.com.

Kim Lindros, an online curriculum and classroom training developer, stated that continuity is a broader term. "A Disaster Recovery (DR) plan focuses mainly on restoring IT infrastructure and operations after a crisis," Lindros explained. "It's actually just one part of a complete Business Continuity Plan, that looks at the continuity of the entire organization."

Continuity includes other factors beyond data and technology. It focuses also need to focus on labor - do you have the talent to keep your organization on task?, as well as facilities and equipment. Addressing all of the above should be part of any Business Continuity Plan.

Why This Conversation Matters

Certainly recovering any lost files and restoring IT infrastructure in the event of a natural disaster is important, obviously. But CIO.com also stressed that it's a mistake to focus solely on IT.

"Because restoring IT is critical for most companies, numerous disaster recovery solutions are available. You can rely on IT to implement those solutions," Lindros noted. "But what about the rest of your business functions? Your company's future depends on your people and processes."

When a major event or incident threatens to disrupt your organization, you must act quickly to ensure that you remain adequately staffed to maintain business as usual, especially since your immediate needs may be diverting your personnel to restoration activities. If you don't have immediate access to the additional manpower you may need, start looking, and fast, in order to reduce any losses that most likely will result.

What You Can do to Prepare

Before planning even begins, it is also important to understand how Contingency Staffing can contribute to business continuity in today's economy.

In any line of work, but perhaps especially in just in time and lean manufacturing environments, it can sometimes be difficult to predict the revenue of your company's business in advance. Sales numbers can be dependent upon external economic factors, and you often don’t know whether demand for your product will go up or down even a month from now.

"The key is to stay resilient and meet whatever staffing needs come your way."

As such, it's important to have effective practices for business continuity management. Your sales numbers can be unpredictable, and by extension, labor may be equally tough to predict. The key is to run a business that can stay resilient and reduce risk to meet whatever staffing needs come its way.

One (1) solution to this quandary that works quite well is Contingent Staffing. Your business might not have the stability to add more permanent, full-time positions to the staff, but temporary employees with the requisite skills and capabilities can be used to fill in where necessary. This can be a win-win proposition, adding productivity to your business and jobs to the economy. The trick in this case is to have fast access to the personnel you need whether available locally or not.

Contractors Are Redefining The Economy - And Business Continuity

The good news is that at some point during the last decade or so, Americans began to seek more flexibility in relation to work. Whereas previously they were only on the lookout for stable, permanent, full-time jobs, workers eventually came to realize there were other ways of making a steady income. Many have become more interested in working on a temporary or contract basis, carving out an independent future rather than committing to work for one (1) employer for an extended period of years or even decades.

This came about largely out of necessity. During the recession of the late 2000s, there were fewer full-time positions available, so workers were forced to find other arrangements to pay their bills and feed their families. But since 2010, even though full-time jobs have been trickling back into the American economy at a steady pace, and there's a sizable portion of the workforce saying "thanks, but no thanks." Instead, they're turning to contingent work or what some call the “Gig Economy” as a new career path with more flexibility and potential control.

Contingent Workers Are Coming Out In Full Force

Just how many people in today's economy are relying on contingent work? We have reason to believe that the figure is still relatively small, but it's growing quickly. Business.com looked at data from the United States Chamber of Commerce and estimated that about 2.9 million people have contingent jobs today, which is about 2.4 percent of the total working population.

They also noted, though, that companies like Uber which empower people to employ themselves are on the rise. The popular ride startup now has a pool of over 160,000 drivers who work on a temporary basis, with only 2,000 full-time staffers. This business model is becoming more popular, and in turn, the contingent workforce is expected to grow.

Temporary Employment Is On the Rise?

In recent years, as companies have looked for new, creative strategies for filling their staffing needs, they've become increasingly reliant on temporary employees, according to the Milwaukee Business Journal.

Mark Marcon, senior research analyst at Milwaukee wealth management firm Robert W. Baird and Company, told the source that the value of the temporary staffing industry as a whole has doubled since 1995, and it's still rapidly growing in value. As of 2015, the total market was worth $121 billion and an annual growth of 5 to 6% per year.

Largely, this increase is due to a changing perception of temporary work in society.

"Having a job through a temporary agency was viewed as a suboptimal type of work, but broadly speaking, it's increasing in recognition as a social good rather than social negative," Marcon said. "It's a good way to get people from a state of unemployment to employment."

Being "a temp" used to carry a negative stigma, but now there is a growing consensus that temporary staffing is a tool that can help get workers and their employers hedge against turbulent business conditions.

Are There More Temporary Workers Today than in the Past? 

There are a lot of factors driving this change. One is the rise of the so-called Uber or Gig economy." We now live in an era in which people no longer need to flag down a corporate-owned taxi to get a ride from Point A to Point B - they can use mobile apps to find drivers independently. In other words, people can deliver their services directly to the end users without any need for a permanent, full-time job in the middle.

It's interesting to look at how this mindset is evolving and what impact it's having on the labor market as a whole.

The Impact Of The Uber Model

Uber has certainly changed the ways we think about work. Thanks to this emerging business model, people everywhere are now more comfortable embracing new roles as temporary personnel.

According to Biz 3.0, Uber is unique because of its numbers. Business and economics expert Andrew Moran told the news source that while the company has only 2,000 staffers in its offices, in 2016 it has an estimated 160,000 people driving Uber cars on a contract basis. These 160,000 are effectively temps, which is a groundbreaking development.

"Uber is the latest sensation in the marketplace," Moran noted. "The ride-sharing app allows consumers to save money on transportation, while the drivers earn a little bit of extra cash. And it isn't just Uber that is contributing to the dismissal of the conventional employee and embracing the so-called 1099 economy."

Uber might be at the forefront of something bigger. Amazon is considering an Uber-like contract delivery service. Deliv, Instacart, GrubHub and Google Express are other big names that are entering this arena.

The New "Permanent Temp" Gig Mindset

As the Uber paradigm sweeps the business world, we're starting to see a large-scale shift as American companies and workers collectively embrace contingent work. While permanent, full-time jobs are stagnating in many industries, there are more opportunities being created for people to work on a contract basis.

"Job creation may be lackluster, but there is one area of the U.S. economy, and in other developed nations too, that is booming - temporary workers," Moran explained. "Temp workers are becoming the perpetual fixture in an economy where labor competition is fierce and high-paying positions are scarce."

Biz 3.0 estimates that the number of temps has approximately doubled since the end of the recession in the late 2000s, now sitting at 2.7 million total. For business leaders, this needs to factored into their contingency planning process. It's likely that in the near future, contract hiring will play an even more significant role in business continuity planning, especially as the drive for increased productivity leave little to no margin for error.

The New Paradigm Offers Many Advantages

On the labor side, there are a lot of benefits to being a temporary worker. You're not under a boss' control, which means you can set your own hours and define your own career path.

Interestingly, there are advantages for employers as well. Greg Zanio, the CEO of a contract worker placement firm, told Business.com that relying on contingent staffing helps a lot with a company's flexibility.

"If companies can get work done without creating a full-time position, they are more inclined to do that today, just to stay more flexible and agile and keep their fixed cost structure to a minimum," Zanio said.

At MADI we are also seeing that our clients are now requesting agile staffing tools to ensure that key positions can be filled at a moment’s notice in order to reduce staffing threats to operations that would then lead to costly additional exposure and risk.

The bottom line is that we're quickly learning that both sides - employer and employee - have something to gain from the growing contingent labor scene and that CEOs and CFOs are quickly taking notice.

Does Contingent Staffing Really Work for Manufacturing Companies?

While we've witnessed an increase in temporary staffing in recent years, we've also seen a realignment in specifically which industries are especially reliant on the contingent workforce. According to Area Development, manufacturing staffing agencies are especially big today.Manufacturing has been a key sector for temporary staffing.

Becca Dernberger, vice president and general manager at Manpower, told the news source that this is a rather new development. In 1990, 42% of the contingent workforce in America was populated with clerical workers, versus 28% in manufacturing and industrial positions. That proportion has since flipped, with 47% of temps now working in manufacturing and industry.

Largely, Dernberger explained, this has happened because manufacturing companies have been eager to stay resilient in the face of fluctuating demand.

"As companies started to grow post-recession, they wanted to augment their workforce at the pace of demand," she said. "Employers were hesitant to add permanent staff until they saw sustained demand. Many manufacturers turned to contingent workforces to cautiously increase production and start investing in potential future hires, should the business be able to sustain them." This has led to the Managed Service Provider (MSP) model, which is designed to manage the efficiency and costs of temporary labor, and is heavily reliant on locally available talent.

Today companies are finding that contingent staffing is no longer be a one size fits all tool that can fill all its temporary staffing needs. For example, what happens if there is a shortage of available key talent in your region? How does this impact your ability to serve the customers who depend on you? Is there are risk of revenue loss?

Local Labor Shortages are Threats To Business Continuity

This is something to consider as your company goes deeper into business continuity planning. Whenever you need help overcoming a threat to operations due to a local labor shortage, whether large or small, using contingent workers can help. The trick here is to make sure you have a contingency plan for staff shortages and a resource that can cast a wide net to secure talent where they are, deploy them immediately and onboard them for seamless integration with your processes.

This way, if you're dealing with a labor dispute and need a temporary employees maintain operations to serve your customers no matter what, or if you have seasonal staffing needs because a certain period is unusually busy or slow for your company, or that key position cannot remain unfilled or the supply chain is at risk, contingent workers can be used to fill in the gaps. The gig economy is growing, and it can benefit the company with workers that are skilled, flexible, and productive on a moment’s notice.