There has been a lot of news lately about the negative or lackluster jobs report that was released just last week. Yet, it’s important to consider the various conditions that are slowing the hiring market. After all, simply paying attention to the symptoms and ignoring the causes will hardly allow a staffing professional to remain ahead of the curve, invest in proper systems like staffing software and recruiting software and stay aware of the factors that could impact their job.
Many people are unaware that businesses are hiring at a robust rate. Unfortunately, 75 percent of the nearly 1 million hires made this year are for part-time jobs and many of these jobs are low paying, reported NBS News. This lack of robust hiring often makes workers question whether the market will ever recover or if this is the new market they will have to traverse to find work.
Industries that traditionally pay their workers less or rely on part-time employees, like retail and food services, are driving most of the hiring. Some employers, regardless of industry, believe that the reliance on part-time workers is the new trend because it offers greater flexibility. If the economy picks up, then employers are able to increase the number of full-time workers on the payroll. However, if the economy remains sluggish, then keeping a staff comprised of mostly part-time workers will decrease operational costs.
“Us and other people are hiring part-time because we don’t know what the costs are going to be to hire full-time,” said Steven Raz, founder of Cornerstone Search Group, a staffing firm in Parsippany, New Jersey, according to the news source. “We are being cautious.”
One of the major operational costs that has employers concerned is healthcare. The Affordable Healthcare Act has many employers waiting to see what costs are going to be added to their budgets before hiring anymore employees. Many staffing firms serving a wide range of industries have seen this trend. Raz told NBC News that his company started seeing a rise in the number of part-time positions it was filling in late 2012. Over the past year, his firm has seen an increase between 10 and 15 percent in a year-over-year comparison.
“They have put some of the full-time positions on hold and are hiring part-time employees so they won’t have to pay out the benefits,” said Client Staffing Solutions’ Darin Hovendick, according to the news source. “There is so much uncertainty. It’s really tough to design a budget when you don’t know the final cost involved.”
According to the Bureau of Labor Statistics, the number of people working part-time involuntarily – because their hours were cut or they can’t find full-time jobs – is 7.9 million. That is an increase of 75 percent from 4.5 million in August of 2007. Employers are cautious about increasing the number of full-time workers they have on staff. Recent research suggests that by creatively using a combination of full-time and part-time staff, a business can thrive and even the part-time workers may be able to succeed. The difference between successful part-time worker implementation and an unhappy staff is the creation of flexible scheduling that allows for the hours on the clock to work within a person’s other jobs. The Daily Beast reported that capacity is still required to conduct business, which is why many offices are relying on a patchwork of part-time workers.
“As organizations and companies reduce the hours of part-time workers, they still have to replace the capacity, so they go out and hire additional part-time workers,” said Philip Noftsinger, president of CBIZ Payroll in Roanoke, Virginia, which manages payroll for more than 5,000 small businesses, according to NBC News.
Employers who have been focused on supporting employee financial health, yet are not hiring full-time workers, are often using creative scheduling to allow individuals the ability to hold second jobs. After all, it’s difficult to support a family on a single part-time paycheck.
“The difference between 30 and 40 hours can be the difference between being able to make ends meet month-to-month,” Heidi Shierholz, a senior economist at the Economic Policy Institute in Washington, told the news source. “That contributes to reduced living standards for American families and translates into having less income to spend on goods and services, which holds back the economy.”
Many employers report that when the nation’s economy returns to pre-recession levels they will increase hiring and switch back to a greater full-time staff, according to The Daily Beast. But until that happens, staffing professionals will be increasingly working to fill part-time or contract work roles. To manage the different scheduling and placement of part-time workers, the right recruiting software will need to be utilized while uncertainty remains.
Business owners like Jason Holstine, who owns a building supply store in Baltimore, Maryland, are reluctant to take on full-time staff when the economy is so uncertain.
“We are still working in an environment that is very hard to forecast the near future and remains very cash-constrained,” said Holstine, according to the news source. “We were always nimble, but we had to become more reactive. Using part-timers gives us more flexibility.”
Employers learned during the recession that those companies with lean operations were the ones that were better able to withstand the perils of a weak economy. By creating a workforce comprised of part-time workers, companies are better able to increase and decrease staff numbers depending on their needs during a given quarter. A nimble staffing and recruiting software solution will allow recruiters to adjust to client needs.
“Private employers are either able to make more money with fewer employees or have been able to make more money without hiring additional employees,” said Sageworks analyst Libby Bierman. “The lesson learned for businesses during the recession was to have lean operations.”