The Astrix Blog
Expert news and insights for scientific & technology professionals.
The Life Science Industry Blog for R&D Professionals
The Advantages of Creating a Flexible Workforce
The economic downturn in 2008, which began with the bursting of an 8 trillion dollar housing bubble, had a substantial impact on the job market. In 2008 and 2009, the U.S. labor market lost 8.4 million jobs, or 6.1% of all payroll employment, producing by far the largest labor contraction of any recession since the Great Depression. During this period, businesses from a variety of different industries recorded significant job losses:
- Hewlett-Packard – 47,540 jobs
- General Motors – 107,357 jobs
- Citigroup – 73,056 jobs
- Verizon Wireless – 39,000 jobs
- Pfizer – 31,771 jobs
- Dow Chemical – 17,530 jobs
Although economic recovery from what many have termed The Great Recession is well underway, the waves of economic uncertainty it created are still rippling through employers in the United States. New trends have emerged as companies seek to adapt to today’s rapidly changing business and economic landscapes in ways that allow them to remain competitive and increase agility.
One such trend involves organizations moving away from a rigid labor model and creating a more flexible or variable expense model. The largest fixed expense on a companies’ income statement is typically the cost of labor – payroll and payroll related expenses. In an effort to better manage their workforce, improve operational agility and reduce costs, many successful organizations have done a strategic analysis to determine what percentage of their payroll related expenses should be variable versus a fixed expense. Put another way, smart companies are now asking: what percentage of my workforce should be core full-time employees vs. contract or temporary staff?
Once this question has been answered, a company can shift a percentage of their workforce into contract or temporary staff to dramatically improve agility. The ability to bring on-demand, skilled labor into the workforce is of significant value when project deadlines are accelerated, unexpected resignations take place, or any business event occurs that causes a shortage of labor. Scaling up, quickly and efficiently, makes sense when there is demand. On the other hand, if there is a recession or downturn in demand, this kind of variable staffing model allows the company to maintain their core employees and shed the temporary staff to reduce expenses. Optimal implementation of this strategic approach to workforce management requires partnering with a quality staffing firm. Companies that create such a partnership can enhance organizational agility, profitability and efficiency without sacrificing quality.
There is much evidence that this new flexible workforce model is being widely implemented. According to the American Staffing Association (ASA), since the recovery began in July 2009, staffing employment has been growing more than two times faster than the economy and just over six times more rapidly than overall employment. ASA figures show that in 2016, U.S. staffing companies employed an average of 3.21 million temporary and contract workers per week. During all of 2016, staffing companies hired a total of 14.49 million temporary and contract employees, with around 13% of these being in the engineering, IT, and scientific sectors.
The rise of flexible staffing strategies is undoubtedly changing the nature of the modern workforce, allowing companies to effectively cope with a changing business environment and maintain competitiveness. Let’s explore some of the options provided by staffing firms that are allowing companies to create a more flexible staffing strategy.
Staffing as a Service – The Flexible Workforce
The days of temporary employees being viewed as throw-away, non-skilled labor are over – temporary and contract employees are now an integral part of the workforce. Today, interim employment has become an attractive option for both employers and employees, with the result that nearly any position can now be filled on an interim basis – from janitor to scientist, and even CEO.
By focusing solely on providing high quality staffing solutions to customers, staffing firms have become experts at recruiting talent. Recruiting professionals at these firms locate, select and screen talented candidates, and are able to make these prequalified candidates available as a potential employee to companies seeking to hire. A good staffing firm can deliver the right people at the right time for the job, and this provides an enormous amount of flexibility for companies seeking to address situations like a recession, skill shortages, temporary project needs or fluctuating demand. Some of the services typically offered by quality staffing firms include:
- Temp-To-Hire – This “try before you buy” service allows companies to hire talent on a temporary or contract basis before committing to a full-time hiring decision. After the contract period is over, companies have the option of converting the employee to full-time status if they have demonstrated that they are a good fit for the company.
- Temporary Staffing – This service allows companies to hire qualified and tested temporary employees to fill openings for special projects, peak loads, vacation, or leave (maternity, illness, disability, etc.) situations. Temporary employees remain employees of the staffing firm providing the placement, and these firms thus handle weekly payroll, benefits, workers’ compensation, unemployment insurance, tax issues and all employment-related functions.
- Direct Hire – Using their extensive referral networks and access to large pools of skilled job seekers, staffing firms are able to shorten your search for qualified, highly skilled, full-time employees.
- Executive Search – Staffing firms providing this service have recruiters that focus on executive talent, helping you locate the best fit executive for your organization.
- Payroll Outsource – This convenient service allows companies to put their employees on the staffing firm’s payroll so that payroll administration, tax reporting, and other payroll associated HR responsibilities are taken care of by the staffing firm.
- Vendor On Premise – To make optimal use of contract employees, it is important to have a plan. With this service, staffing companies provide an onsite consultant who will work with your HR department to coordinate, manage and plan temporary staffing needs. The onsite consultant will also ensure all temporary staffing requests are appropriately filled, and monitor temporary worker performance to ensure satisfaction.
Benefits of a Flexible Workforce
Companies that utilize staffing firm services can create a flexible workforce that provides enormous benefits for the organization. Some of these benefits include:
Reduce Payroll Expenses: Utilizing contract employees from a staffing firm allows you pay for talent only when you need it, effectively converting your fixed payroll expenses to variable. Additionally, since contract staff are technically employed by the staffing agency instead the business using their services, the overall costs of the employees are reduced as the company does not have to provide benefits, payroll services, or workers’ compensation. Finally, since staffing firms manage the entire employment process, this contract employee strategy also helps to reduce the work hours required by your Human Resources (HR) Department.
Eliminate Overtime: Using temporary and/or contract employees in place of overtime can significantly reduce labor costs.
Improve Operational Agility: The ability to scale your workforce up or down to match workload helps protect both profitability and core employee morale.
Reduce Operational Costs: Posting on job boards, sifting through resumes and interviewing candidates is a laborious process. Staffing firms can do most of this work for you at a significant savings compared to your Human Resources Department. Additionally, utilizing contract employees from a staffing firm helps ease the administrative burden and reduce costs associated with processing weekly payroll, benefits, taxes, unemployment claims, and/or workers’ compensation. Finally, working with a staffing firm shifts the financial expenses associated with employee turnover and/or layoffs onto the staffing company.
Reduce Compliance Risk: There are currently thousands of different labor laws or clauses that employers must comply with, and there can be significant financial penalties for non-compliance. Proper procedures for hiring temporary staff are particularly challenging. Working with a staffing firm to fulfill your hiring needs shifts much of the burden and risk for labor law compliance onto them.
Find Candidates Quickly: Quality staffing firms are very familiar with the industries that they place candidates in, and they will therefore understand your needs. Additionally, staffing firms typically have a broad pool of qualified and already-vetted candidates in waiting who can start immediately. After communicating your needs to a staffing firm, you can be introduced to a qualified candidate in a matter of days, or even hours.
Reduce Training Needs: The highly skilled and seasoned employees provided by staffing firms can often hit the ground running, requiring very little time spent on job training. Additionally, staffing firms will assist with some of the onboarding tasks in order to get your new hire up to speed quickly.
Make Better Hiring Decisions: The “test before you invest” Temp-To-Hire service helps you to avoid a bad hiring decision by allowing you to directly assess a prospective employees’ fit for the position before making an offer for full-time employment. Additionally, a staffing firm can provide you with access to a much larger pool of quality potential employees than your HR Department could source, helping you to more easily find the best person for the job.
Improve Core Employee Morale and Productivity: Being understaffed leads to long hours for core employees, ultimately lowering morale and productivity, and leading to burnout or even turnover. Contract or temporary employees can help to minimize the necessity of overtime for core employees during special projects or other periods of peak workload. Additionally, the Temp-To-Hire service helps to minimize the bad hiring decisions that can contribute to and/or create the understaffed scenario.
Access Talent with Specialized Skills: Quality staffing firms recruit nationally and have the ability to find candidates with highly specialized skills. Utilizing their services, you can more effectively find full-time employees with in demand specialized technical skills, or quickly fill a temporary skilled position necessary to complete a special project (e.g., laboratory informatics project).
Keep the Focus on Core Activity: Utilizing temporary contract employees to facilitate completion of a special project or handle tasks associated with an increased workload allows core employees to keep their focus on core business activities, effectively helping to maintain company productivity and profit.
Create a Trusted Partner: A relationship with a quality staffing firm can provide you with the best quality candidates, along with access to industry insiders who understand how your business can leverage current trends in the job market. Additionally, staffing firms have the knowledge required to keep you up-to-date on competitive wages and benefits in your industry.
Choosing a Quality Scientific Staffing Firm
The rapid growth experienced by the staffing industry over the last decade has turned staffing services into a commodity. Just because an organization claims to do scientific staffing does not mean that they do it well. To provide scientific staffing services effectively, our experience has shown that recruiters must have the proper knowledge, skills and experience to understand their customer’s needs. A recruiter with no training in IT, for example, would likely not be the best person to be interviewing prospective candidates for your IT department.
In addition, the commoditization of staffing services has led to a situation where staffing recruiters rarely have much tenure in the company they work for. This makes it hard to find a scientific staffing firm that is committed to building the kind of long-term relationships with both customers and candidates that are necessary to best meet the needs of both. It’s not necessarily size or market prominence that makes a great scientific staffing firm, it’s the quality of the services that they can deliver to both customers and candidates. We recommend that you take the time to interview your interviewer, as the staffing firm you hire will effectively be representing your company with prospective candidates.
If you are already working with a scientific staffing firm(s), ask yourself if they are meeting your needs effectively. If you are not completely satisfied with the partnership, you may want to consider interviewing other firms. Some of the questions you should be asking a prospective scientific staffing firm include:
- What is the tenure in your recruiting staff?
- Do your recruiters have both scientific backgrounds and/or the industry experience?
- Do you offer quality employee benefits to facilitate contractor health and retention?
- Are you working to effectively leverage the passive job seeker market through referrals and networking?
- Do your recruiters attend trade specific events within their field of expertise to stay up on changing trends?
- Do you have any candidate and customer testimonials from long-term partnerships?
- Do your Account Managers invest the time necessary to understand a customer’s business and qualify their requirements?
- Is your candidate recruitment and screening process consistent yet customizable to customer requirements?
- Do you maintain consistent communication with both the contracting employee and their manager post-placement to help facilitate retention and performance?
- What percentage of your contractors are retained? What is the conversion rate to full-time employment?
- How many resumes are in your candidate database?
The Astrix Difference
Astrix Technology Group has been a trusted provider of scientific and technical staffing services across many different industries for nearly two decades. At Astrix, we are all about the science, and this is reflected by the fact that our Managing Directors always have scientific and technical backgrounds in their respective areas, along with work experience spanning numerous scientific industries. This gives them the knowledge and experience necessary to understand the skill sets and requirements of the candidates you need. Our clients work with us because we are scientists ourselves, and we understand the need to have skilled and productive people in the laboratory.
In addition, Astrix has chosen to build a company culture that facilitates employee loyalty and longevity. Our staffing division is thus filled with long-term employees that have the experience necessary to excel in what they do. Each of our regional managing directors are part owners in our business, and are motivated solely by a desire to exceed our clients’ expectations.
Astrix has a staff of 32 full-time recruiters located in 7 regional offices across the country. While we have the ability to recruit nationally, recruiters in each of our regional offices have a unique understanding of their region and the availability to meet with clients in person.
Astrix employs a methodical and data-driven recruitment process that is customizable to customer requirements. Our recruiters place a full range of skilled scientists, specialists and technicians, and we work closely with each candidate and client throughout the engagement in order to assure that the needs of both are met.
Finally, we understand that the success of your business depends on finding and hiring quality talent that will stay engaged until the job is done right. As such, we provide our contract employees with an industry-leading benefits program that serves to help keep them motivated and satisfied during their tenure. We provide the right talent to help your business grow and evolve, along with the right benefits to support your employee’s health and happiness.
As the modern economy continues to evolve, companies are learning to leverage staffing firms in order to create the business agility and scalability that is necessary to thrive in a rapidly changing business environment. The practice of utilizing staffing firms to create a flexible workforce is not just being embraced by employers, however. Employees are also welcoming the expanded opportunities and flexibility that staffing firms can provide to their careers. One might even say that temporary or contract employment is currently trending, and this puts employers in a good position to leverage this strategy.
We live in the age of information, and connectivity through technology is coming to dominate our world and economy. The internet and cloud technologies are spawning the rise of an Everything-as-a-Service (SaaS, IaaS, PaaS, etc.) business model that allows companies to reduce costs by outsourcing the aspects of their business that are not core competencies. The staffing industry is a natural outgrowth of this business trend, allowing organizations to reduce costs and increase flexibility and agility while receiving expert recruiting services. Learning to utilize the services of a quality scientific staffing firm like Astrix is an important piece of the puzzle for companies seeking to remain competitive and profitable in today’s increasingly challenging business environment.
Astrix Technology Group is a technical consulting and staffing firm focused on serving the scientific community. With offices throughout the United States, Astrix is dedicated to providing the highest level of quality and service.