The Global Rise Of Temporary Staffing To Maximize Profits And Efficiency
You’ve likely noticed this past year that the makeup of the global workforce is shifting. According to global research conducted by Mercer in 2019, 79% of global employers expect temporary and freelance workers to substantially replace full-time workers in the near future. This highly effective workforce planning strategy is increasing in popularity for a number of reasons. In our post, we’ve highlighted a few of the key factors contributing to the rise in temporary staffing.
A Changing (And Confusing!) Legal Landscape:
Localization:
A top projected trend for global HR in 2019 and beyond is the increased localization of laws. This means that employment laws are becoming more specific to each country, state and city, making it nearly impossible to stay up-to-date and effectively create uniform policies and processes. In 2019 in the US, we have 11 states with their own versions of paid sick leave laws, as well as many laws at the county and city level. A few states with both state laws and local sick leave laws have actually banned the local sick leave laws due to the complications they have created for employers, but not all of these cities are complying, and more cities in other states continue to put forth new bills for paid sick leave laws. And that’s just the US!
By utilizing human capital agencies, companies can unload some of the compliance burden related to localized employment laws that cover temporary workers. For more long-term and comprehensive compliance solutions, companies may also choose to contract with an employer of record (EOR). While EORs may indemnify the company and provide helpful resources, they typically do not provide staffing solutions, so partnering with a reputable local or global human capital agency is usually helpful in conjunction with an EOR.
Legalization:
In addition to more laws and stricter regulations, many nations are actually repealing or modifying laws in ways that help businesses and workers. As of January 1, 2019, employers in Germany may now make use of temporary workers up to 18 months at a time. As in other countries, temps in Germany may now be placed by domestic or international human capital agencies, by online applications that broker freelancers and temporary workers, or they may be engaged directly by the employers. Due to increased penalties imposed by the government for worker misclassification, employers in many countries, including Germany, may shy away from engaging temporary workers directly. Local talent shortages may further make directly engaging specialized temporary workers challenging.
The Impact of AI on Job Design:
Advances in AI have presented organizations all over the world with the need to reskill their workforces. In order to capitalize on the use of AI for both decision-making and routine tasks, the jobs of existing employees need to be reworked, replaced or eliminated altogether. Some jobs will shift from tactical to strategic and some will become highly specialized. This rapidly increasing need for new types of professionals has resulted in massive employee skills gaps that human capital agencies and other contingent workforce solutions are in a unique position to address.
Increasingly Obvious Benefits of Outsourcing:
For Businesses:
Employers are seeing the clear benefits of being able to retain core staff while outsourcing work involving transferable skills (e.g. project management and UX design). By utilizing human capital agencies to place virtual talent, companies receive expert services from highly skilled workers in a more economical manner over retaining such talent full-time.
For Employees:
Outsourcing certain aspects of employees’ jobs also benefits the employees. The Workforce Institute “found that 75% of workers worldwide say it should take fewer than seven hours a day to do their job. Yet, 71% of those respondents said that work interferes with their personal lives.” Outsourcing certain tasks to temporary staff may create more meaningful work for a company’s core employees. It may also help those core staff get unburied and allow them some much deserved work-life balance.
For Human Resources:
In many countries, HR is one of the functions that is being reskilled and restructured. According to the Human Resources Certification Institute, a common trend in the HR function within European countries and across the globe is the reduction in size of HR departments in relation to overall staff size. “Routine or administrative HR functions are outsourced or offshored to other nations.” More established countries are more likely to outsource labor than less developed nations because they have proven core processes in place that are easy to carve out from routine, lower skilled support services. In contrast, businesses in rising economies may still be attempting to establish themselves and may have larger HR departments to match the size of their in-house staff.
Staffing Agencies Are A Main Solution:
Human capital agencies, both domestic and international, are one of the best solutions for employers needing temporary workers. Some of the main benefits to partnering with human capital agencies are that they
- have a greater talent pool from which to source qualified candidates,
- offer cost-effective trained support staff for routine admin tasks,
- quickly fill positions for short-term, highly-specialized projects,
- eliminate the administrative burden and costs associated with using internal resources to recruit and
- they share some of the compliance burden with regards to classifying and remitting payroll taxes for the staff they place with you.
Are you ready to take your local or global staffing to the next level, while freeing up valuable time for your core operations? Let’s get started!