How a Staffing Agency Can Help During Recession

The U.S. economy is quite weak and no one seems to be able to accurately forecast when it will rebound.  Of course, the economy is tied to the pandemic, so who knows when a cure will be discovered and how long after the financial ecosystem will return to normal – if ever.

Businesses would like to find out what is the best way to deal with an extended recession. One way is by changing their recruitment strategy, knowing how the job market is likely to change. It is also necessary to plan to deal with the recession, while continuing hiring top rated talent.Staffing-Agency-Help-During-Recession

 

Reviewing Recruitment

Most business owners review the workers they require regularly and are aware of how many employees have to be hired and the expenses involved. To deal with the recession, it is important to be even more careful while hiring and accurately determine staff required at present and in future under different scenarios – positive and negative. This implies that a plan for talent acquisition should be created, which is based on the forecast for the business for the next few years.

It is important to understand how required staff will change during a longer recession. It is important to know which positions are crucial for the business, so that the budget can be adjusted without affecting essential staff. Businesses should also become more creative in finding new ways to fill the vacancies, like hiring a staffing agency to help with recruitment or promoting existing members of the team. In addition to reducing expenses, the results of the team are likely to improve since promoted employees are more engaged and productive.

Predicting Changes in the Job Market

At present the job market is fairly confusing and there may be major changes if economic conditions worsen further. If job security reduces, employees are less likely to resign from their current job and opt for new unknown opportunities. As a possible template, the SHRM study of the 2008 recession highlighted some of main findings for businesses. It is important to have enough staff, while ensuring that the morale and engagement of these employees is high. Though 55% of the businesses indicated that they had reduced their employee count to cut costs, yet 76% also had invested resources for training their teams to increase the productivity and skills. While reducing expenses is essential during a recession, that should be combined with policies for increasing employee retention and satisfaction in the long term.

Recruitment Strategy during Recession

A business should decide the skills, experience and profile of the employees who are essential, even if the staffing budget has reduced due to the recession. After this the business should finalize its strategy for recruitment. It is advisable to decide the most important positions for the organization, and other positions which may be filled, if the budget is sufficient. This will help ensure that the business hires only the most essential employees first, and the company can reduce its expenses, without adversely affecting business targets.

Single Staffing Agency for Efficiency and Budget Control

When the essential positions are finalized, the business should try to optimize the process of hiring so that expenses are reduced. One way is to use a single staffing agency for all the recruitment activities instead of using multiple staffing firms. The business can negotiate a better deal with the staffing agency to reduce expenses. After this a timetable for implementing the strategy should be finalized, so that the recession affect is alleviate for the business. Being unprepared for a recession leads to reduced profits. Hence it is important to plan ahead to protect the morale of the employees and the company, so that the business survives this recession.

Improve Your Recruiting Strategy with the Help of Flexicrew Staffing

Want to improve your recruiting strategy even further? Call Flexicrew to help create and implement your recruiting strategy to help you attract top talent as long as this recession lingers.

5 Financial Actions Which Help Business Survive Recession

The National Bureau of Economic Research (NBER) has declared that the recession officially started in February 2020. Every business is likely to be affected during this cratering economy. However, the changing economy also provides innovative businesses a chance to overtake their competitors who may not adapt to the changes except by firing employees. These resourceful businesses can use the recession for:

– maintaining cash flow, while other businesses have liquidity problems

– reducing business expenses to so they can reprioritize investment to functions with better returns

– making processes more efficient so that it is easier to grow fast when business conditions improve.

– increasing their market share, especially if their competitors do not adjust

Suggestions To Adopt in a Weak Economy
Recession - Recovery

If a business wishes to thrive during a recession, it should have the foresight to think about the future – think in non-traditional ways, look at the organization differently and adopt business practices accordingly. Some suggestions which can help a business deal with a recession better are discussed below.

1. Closely Forecast and Monitor Cash Flow

The business owner should forecast the cash flow, considering the expenses, and accounts receivables from customers. He should also monitor the actual cash flow, to ensure that it is similar to the forecast. The financial statements should be prepared in time and have accurate, relevant information. Compared to balance sheets, income statements, statements with cash flow information provide a better overview of the financial status of the business. The business owner should be able to forecast cash flow for a three month period.

To get better prices, discounts for bulk purchases, or reduced prices in the short term, it is advisable to negotiate with business associates like landlords, contractors and suppliers. Discounts offered by suppliers for making payments promptly can help reduce expenses. If the supplier is not offering any discounts for bills, they should not be paid before the due date.

If the cash flow of the business is affected, it is advisable to contact creditors and ask them for an extension of the due date. This is better than waiting till collection memos are sent. However, the business should have a history of making timely payments, so that creditors feel confident that the future bills will be paid.

2. Improve Collections

When a business is flourishing, they may become lax while collecting money from customers, accounts receivable. However, this can adversely affect the business finances during the recession. Hence the business should try to reduce the collection period to below the industry average, though customers may resent this.

3. Increase Capital Reserves – Reduce Debt

Businesses should closely monitor the credit rating of all their customers, even the most highly rated clients. The business should communicate regularly with their customers to find out how they are dealing with the recession. Getting regular updates will help the business prepare for any financial problems. This will help build a long term relationship and in some cases lead to new opportunities.

While contacting customers regularly is always recommended, during a recession, this will prevent competitors from poaching customers. Sales staff should contact every customer regularly, and the business owner should also do the same.

Meeting clients personally is probably the best opportunity to resolve the problems of unhappy customers, and regain lost clients. It is advisable to finalize contracts for longer duration with the largest customers, offering them the best possible deal. The customers should be offered incentives for prepayment and discounts for long term purchases.

4. Monitor Inventory

Usually during a recession the sales will reduce and the inventory will increase resulting in a mismatch. This surplus of unsold goods can adversely affect cash flow. It is advisable to convert the unsold inventory into cash and also reduce the stock of the slow moving products. Inventories of products which are not in demand should be monitored closely and trimmed to the extent possible or even eliminated. This will ensure that cash is not blocked in unsalable stock. The recession is also a good time to remove products with a low profit margin from the inventory. However, the business should ensure that products in demand remain in stock.

5. Control Capital Expenditures

Businesses should postpone their plans for expansion and expensive equipment since they will take a many years to recover the investment. However the business should have enough capacity to fulfill their customer orders, when the economy improves.

Conclusion

A business can survive a recession only if the management takes difficult decisions and acts on them. Managing the finances properly is vital for business survival.

Flexicrew can assist you with workforce planning and recruiting the quality talent that you need in this recession upheaval.  Contact one of our workforce professionals Today!