The uncertain economy is creating a sense of uneasiness for job seekers and hiring companies alike, which is why performance-based labor solutions are becoming increasingly appealing.
It seems as though every week there are conflicting predictions about the state of the American economy. One month it seems to be expanding, then progress seems to stagnate in the next. Recent predictions from the Philadelphia Reserve Bank only further perpetuate these unclear predictions. The bank's most recent Survey of Professional Forecasters for the third fiscal quarter expects that economic expansion over the last year will be less than what was predicted three months ago.
According to the survey, throughout the rest of the year, the forecasters see real GDP growing at a rate of 1.5 percent, which is down .5 percent from the previous estimate. Furthermore, predictions indicate that this number is likely to rise through 2015, after which it is expected to drop again in 2016.
Employment in a Volatile Economy
This survey paints a cloudy picture of the future economic situation. While there are some signs that the economy is likely to grow, others suggest that this may not be the case. This makes it difficult for companies that want to take advantage of positive economic indicators, as there have been few since the recession of the late 2000s.
Part of this means taking on more employees to increase business production. However, doing so could be seen as a major risk for some as it would increase the costs of labor at a time when the economy could suddenly contract again. To further understand the apprehension of these companies, consider the experiences of many who are currently seeking employment.
Preparing for Work
A recent guest blog in Forbes Magazine explains that many employers are wary of taking on new hires because of a lack of skills in the talent pool. It examines a number of studies that measure the sentiments of companies looking to hire. One study examined was conducted by McKinsey, which revealed that while 72 percent of educational institutions believe their graduates are ready for the working world, only 42 percent of employers feel this way.
There are several reasons why this could be so, but the bottom line is that employers do not feel like they have candidates that they can confidently hire. Forbes examined a number of ways in which companies have been able help cultivate the necessary skills in employees. One strategy that has become common among some larger corporations such as Target, Macy's and Goldman Sachs, is month?-long training programs to ensure that their new hires are adequately prepared.
Using Alternative Labor Solutions
While these methods are strong practices in which businesses can bridge the skills gap, not every company has the time or fiscal freedom to run such programs. This puts them in a situation in which they would like to expand their operations, but are anxious that such an endeavor will not play out in their favor.
To address these concerns, many companies have used alternatives to temporary staffing. While contract labor is a flexible labor solution for companies who need a larger labor force, employees offered by these services are often untrained and not fully committed to the job. As a result, such solutions do not allay the fears that the hiring company had in the first place.
However, performance-based labor solutions offer on-site training, thus addressing the hiring concerns while also providing the business with laborers who they know can complete future jobs. In this way, these companies can oversee the development of employees without having to dramatically expand labor costs if they do not wish.