The Value of a Flexible Workforce
John Harland FRCSA (Life)– Director ERG Recruitment
The Covid-19 Pandemic has thrown world-wide economies and businesses both large and small into chaos and most have experienced significant downturn in revenue and so I think it is timely to discuss a concept upon which much of the recruitment/labour hire industry is based. Many businesses have not survived the current Pandemic and many more hang on to the hope that things will return to some form of normality soon. Unemployment numbers world-wide have grown exponentially, and survival is the major driver of activity.
Unfortunately, a more likely scenario is that any recovery will not occur for quite some time and in fact we may very well slip into an economic depression before we see any recovery at all. In general businesses have restructured large amounts of staff, talent, skills, and intellectual capital so how do they re-establish their business. Pivoting into new areas is a focus for many but whatever action is taken it will still require skills and human resources to make it happen.
Flexible/Temporary workforces have been around for 70 years and is a concept about which much has been written. In this context it broadly refers to that group of workers described as casual workers, temporaries, contingent workers, and contractors. Union’s dislike the concept intensely and describe it as “precarious employment” and “casualization” of the workforce. However, when I wrote my first article on the subject nearly 10 years ago it was estimated that 40% of the world’s workers were employed in the “gig-economy“(i.e. contractors) and its popularity was growing amongst the younger generations who craved the flexibility and opportunity of work life balance.
A Hays Salary Guide across Australasia at the time, found that 51% of Australasian businesses said they used temporary/contract staff for special projects/workloads and only 35% said they use temporary/contract staff only in exceptional circumstances or never. Now these figures are old and will have changed and in the light of business recovery during and after the Pandemic the concept is worth re-examining. I think it is reasonable to conclude that a large majority of companies should see the use of a flexible workforce as a legitimate workforce strategy.
The pandemic, as was the case with the last recession, will bring the benefits of flexible workforce into the forefront of workforce management despite a movement which suggests that it is a strategy designed to casualise the workforce and negatively impact on worker payments and conditions. The recent changes and introduction of the Employment Amendment Act covering “Triangular Employment arrangements” (primarily Labour Hire) are attempts to restrict the practice, however while I have reservations about how it will be used by some parties, I also think that it will only impact those businesses that are not following the basic principles of adhering to the existing Labour laws for the purposes of a market (price) advantage.
Accordingly, the Act should not be a hindrance to ethical labour hire participants (both agencies and their clients). In fact, it has long been recognised that the flexible labour market has a significant competitive advantage and is a driver of investment and growth in any economy. With rapidly increasing unemployment because of Covid-19 and the NZ economy hovering close to a depression, it is more important than ever that we think critically about flexibility. I believe employers should be adopting a more flexible approach not only as a temporary retention strategy, but as a permanent and sustainable solution to more “competitiveness.”
We know through our own experience that flexible/temporary employment is a genuine pathway to permanent employment benefiting both the temporary worker and the host employer. ERG ‘s experience is that 90% of our temporary workers will be offered permanent employment within 12 months. Employers engaging these workers fill roles which are either seasonal or subject to establishing the long-term value of the position. i.e. can it add value to the business on a long-term basis. For the temporary employee it is a chance to learn or elevate their existing skills. It is also a chance for the employee to try something different and discover if it is a role, they would be happy doing in the medium to long term. In my opinion this is a win-win for the employee and the employer.
This is only a short introduction to the concept and I will follow up shortly with further comment on the value of flexible workforce but in the interim if you would like to discuss the merits please contact our ERG Recruitment Branch in Auckland and speak with Apii Jack General Manager on 09 258 5120.