Staffing – A Growth Industry

Staffing a Growth Industry

By: James Sutton      

September 1, 2015

During the recession of 2008, companies were faced with major setbacks and layoffs. As the unemployment rate increased, causing firms to have to make challenging decisions, organizations had to learn how to strengthen their financial position. Their options were to either downsize head-count or to eliminate operating costs in order to regain their financial health. When the economy started recovering from the recession, firms had to ramp up again – increasing headcount rapidly. This put many companies in a pearl because they did not have the technical recruitment resources needed to fill the open requisitions. So their best option was to go to third party staffing and recruiting firms for support.

After the recession, businesses had an increasing need for candidates who were seeking temporary, and/or temporary to permanent placement. Many firms had discovered value in the transitory nature that the temp-to-perm process offers. Also known as the contract-to-hire service, that placement firms offer – where companies to try employees out before offering them full time positions – reducing their cost to hire; as well as having the ability to try out several different employees at the same time. This service proved to be the best avenue to bring head-count numbers back up in their organization, and BOOM, the Staffing Industry exploded. Many firms grew at double-digit rates from 2012 to present day and are still growing.

Another key factor, was the new health insurance costs related to the Affordable Care Act (ACA) which took effect January 1st, 2015, many companies found themselves burdened with higher costs that they were not affected by previously. This legislation became a huge driving point for the increase within the staffing industry as well, being now, that any company with 50 or more employees are required to offer Healthcare coverage to their associates and their families. Business Leaders learned that by off-setting these workers with an Employment Agency, companies can effectively remove those burdens from their P&L, increasing their bottom line, thus adding to the immense growth of the Staffing Industry. I foresee this growth to only continue as the years go by and Staffing firms are going to be the go-to partners for many businesses which previously never consider them.