Ninety percent of CEOs believe a recession is looming, and 72 percent of organizations have started to prepare. Staying informed of economic indicators and proactively readying for potential challenges can help companies mitigate the impact of economic downturns. Strategies can include reducing expenses, diversifying revenue streams, and focusing on talent development and retention to maintain a strong workforce.
Recession-proofing your talent strategy involves taking a strategic approach to ensure your business can weather economic downswings while retaining top talent and attracting new talent. Here are some strategies to consider:
- Focus on retention: Leaders are often quick to lay off employees in a recession. Because the cost of replacing an employee can be more than 150 percent of their salary, instead, the focus should be on retaining top performers. Employers can retain quality workers by creating development plans, offering training, and being transparent about the company’s financial status. Upskill employees to assist them in developing new skills and increase their value to the organization. Offering training and development opportunities also demonstrate that the company invests in its employees’ long-term growth.
- Identify essential skills: During a recession, when companies downsize, remaining employees often need to take on additional responsibilities. Identify the critical roles and functions necessary for your business to continue operating effectively. Once you have identified the vital skills for each position, prioritize them based on their importance to your organization’s success. Then, focus on the most critical skills to your business operations in your recruitment and training efforts.
- Develop a strong employer brand: Even during economic downturns, top talent still has options and will be attracted to companies with strong reputations. Ensure your organization has a positive and authentic employer brand that emphasizes your company culture, values, and the benefits of working for your organization. During a recession, many employees may feel uncertain about their job security and may be more likely to leave if they do not feel valued or supported by their employer. A strong employer brand can help build loyalty and engagement, reducing turnover.
- Embrace flexible work options: Remote and hybrid work have become increasingly popular. In fact, 62 percent of workers expect their employer to allow them to work remotely moving forward, and 28 percent cite work flexibility as their primary motivation for not job hunting in 2023. Offering flexible work options can increase employee attraction and retention, improve work-life balance, and reduce the cost of office space.
- Related: The State of Remote Work in 2023
- Create a diverse and inclusive culture: By creating a welcoming and respectful workplace for all employees, organizations can build a stronger sense of community, reduce turnover, and position themselves as employers of choice in the marketplace. Focus on creating a workplace that values diversity and inclusion and builds relationships with employee resource groups and external organizations that support these values.
- Maintain an agile workforce: The ability to pivot quickly and respond to changes in the market is crucial during a recession. Organizations are looking toward contingent labor to help bridge talent gaps, provide greater flexibility, and optimize their workforce. In fact, since pre-pandemic, companies have grown their contingent workforce by over 50 percent. Contract workers can be brought in to scale up and down as required to assist with short-term business needs or to combat ongoing labor shortages. Bringing on contingent workers is a strategy that comes with few strings attached—meaning you can end these resources’ assignments once your labor needs subside. A Managed Service Program (MSP) solution offers a way to source high-quality candidates, consolidate services, streamline processes, and provide advanced workforce analytics.
Partnering with an MSP solutions provider
In recent years, the adoption of MSP solutions to manage an organization’s contingent workforce has become more widespread and is no longer limited to large companies. An MSP provider can help your organization better manage your contingent workforce, which includes temporary workers, independent contractors, and freelancers. Here are the benefits of partnering with an MSP solutions provider:
- Cost savings: An MSP provider can help minimize your above-market pay rates and supplier markups by providing visibility into workforce spend and enabling data-driven decision-making. This allows organizations to make informed choices about the cost of contingent labor and manage their labor budget more effectively.
- Reduced rogue spend: An MSP provider can identify and reduce rogue spend outside the program by providing a centralized system for managing and tracking all aspects of contingent labor. This can help prevent unauthorized spending on contingent workers and ensure compliance with company policies and regulations.
- Improved efficiency: An MSP provider can save your organization time and resources by seamlessly managing the entire worker lifecycle, from hire to offboard. This can help reduce administrative burdens and enable HR and procurement teams to focus on more strategic tasks.
- More positive worker experience: An MSP provider can help provide a more positive worker experience, improving talent acquisition and retention. This can help ensure contingent workers are recruited, onboarded, and managed effectively, enhancing their job satisfaction and overall experience with your company.
Supplier-funded MSP solutions
You may be thinking MSP fees are too expensive—especially with a looming recession. However, supplier-funded MSP solutions are a common model for organizations looking to manage their contingent workforce. In this model, the management costs of the program are borne by the suppliers, rather than the organization itself. The MSP provider charges suppliers a percentage of their invoices, which covers the cost of managing the program.
Related: 7 Myths About MSP Programs
Broadleaf Results offers managed service programs to support your organization’s wide-ranging needs, from HR and recruiting, to procurement and statement of work. Reach out to learn more today.
This blog was authored by Broadleaf’s Vice President, Client Delivery, Joseph O’Shea.