Recent economic mixed signals are challenging manufacturers and distributors to meet continued high demand while they face the competing pressures of limited access to credit, inflation, high wages, hiring freezes, and an array of other challenges. While there is no crystal ball on the economy, workforce leaders need to maintain the right balance of employment during a downturn, but also be able to meet surges in demand or take advantage of a quick economic recovery. Utilizing temporary labor is offering many manufacturing and warehouse operations a means to meet these challenges. These types of operations can utilize contingent labor to boost worker efficiency while, at the same time, offer flexibility to grow or shrink a workforce to adapt to swings in demand. But there are several key strategies to making this work.
Strategy #1: Leverage Contingent Labor to Improve Efficiency
Far from a stop-gap measure, contingent labor can actually be a way of improving efficiency. First, workers can be deployed to harder-to-fill shifts or positions. This can reduce overtime and actually increase productivity. In addition, workers with the right set of skills can also significantly improve efficiency. A thorough skill screening process is an effective way to ensure that the right workers are matched with the right jobs. For example, the Eastridge GATETM – or Gateway to Attaining Technical Experience – program, has been effective for many clients to not only reduce turnover, but also improve production in manufacturing as well as in shipping and logistics positions. Finding the right talent and the right balance of talent can, ultimately, boost producing at a lower cost.
Strategy #2: Upskill Your Workforce
While temporary labor is often used as a last resort, it can actually be a way to acquire new talent that has entered the market. Although unemployment rates remain historically low, more workers are now open to temp assignments in order to explore new opportunities or fill gaps in employment. Contingent labor can be a way to acquire skills that could then be folded in as a permanent part of your workforce.
Strategy #3: Hedge Against Employee Mobility
While there are signs that the economy is slowing and the job market is cooling, workers are still moving to other positions for pay or other opportunities. Leveraging a pool of contingent labor is a way to ensure that you have skills at hand in order to meet production when this happens, and that you don’t lose productivity due to employee turnover. For example, a manufacturer may keep a set of temporary workers on hand moving them into permanent positions when positions open up. This ensures there are no dips in production, but also gives flexibility to not increase headcount.
Strategy #4: Enhance Hiring and Recruiting Efficiency
Another way to realize efficiency gains is taking administrative pressure off HR and talent acquisition departments. The right staffing partnership should help realize efficiency gains not only on the production floor or warehouse, but in the back office as well. For this strategy to work, however, a staffing partner needs to understand your needs enough to free the expertise of these departments to fill higher level roles and act more strategically either through reduced turnover or simply filling positions more quickly and effectively.
Strategy #5: Stay Nimble
Finally, contingent labor strategies should be leveraged so that you can pivot quickly to seize an opportunity. In down economies, many of the winners and losers are determined not during the lean times but in the inevitable upturns that follow, usually quite rapidly. A contingent workforce strategy should remain consistent, and enable a quick acceleration to take advantage of broad economic recovery or spikes in demand presenting opportunities for growth.
Today’s seemingly contradictory economic pressures have placed workforce efficiency front and center for many organizations. Contingent staffing, when deployed with strategic intention, can boost overall business efficiency and provide the flexibility companies need to take advantage of new opportunities or help ride out business uncertainty.