Temp Worker Crunch: Are You Prepared?

Human resources departments that are straining to fill vacancies with temp workers may find the next few months a little trying.

According to a study by Staffing Industry Analysts, temporary staffing levels are expected to reach historic highs in 2013.

As the economy continues to slow down, organizations increasingly rely on temporary and contract workers to make it through the tough times. Research shows this trend will continue through next year.

The Staffing Industry Analysts report predicts a 6 percent increase in temp worker levels in 2013—especially in the IT and engineering sectors, with a peak in demand in most industries. The only temporary jobs expected to decline next year are office/clerical, finance and legal.

These hot temp jobs could face a talent crisis in 2013, especially if the numbers of available workers do not keep pace with demand.

Bad news for employers may be fantastic news for temp workers. Both starting salaries and hiring time in these areas will increase, with the likelihood of a negative impact on business efficiency and profit.

How can industries get ready for the temporary talent crunch? Six ways your business can prepare:

1. Make sure salary levels are competitive.

Understand the going rates for jobs in your sector. Is there a difference between what you are now paying and current market rates? Expect any gap to widen in 2013, meaning the company will be less competitive when it comes to hiring temp or contract workers.

These insights should influence your hiring strategies for 2013, to prevent delays in hiring and empty desk times.

2. Budget Payroll Increases

Anticipating a talent crunch in your industry, analyze different scenarios. Calculate the potential loss of business through delays in finding workers or decreased productivity, measure all associated costs. Reducing a pay gap now and through 2013 may mitigate losses, but only if they are part of a planned strategy. This information could persuade c-level executives to increase salary budgets, allowing you to respond as necessary.

3. Lessen the Reliance on Additional Staffing

Stay interviews with permanent staff and existing contract labor can be a snapshot to anticipate future needs. Monitor engagement levels and learn what can keep them in place. Identify risk factors that may be inducing people to leave. Be proactive with staff conflicts or issues such as pay raises, to make sure you are retaining your current employees. Losing staff now will only make it worse when the talent crunch arrives in 2013.

4. Audit End Dates of Existing Contracts

Strangely enough, few companies have a comprehensive system to track end dates of the current contract workers. Without organization, the appearance of simultaneous end dates could leave employers in a lurch. Coordinating contract labor terms could prevent tense negotiations to extend contracts under the gun.

Often, temporary employees become passive candidates for other opportunities when they reach the end of their agreements. It will be beneficial—and saves money—for HR to meet with them well before the end of their contracts.

5. Think About Retention Bonuses

The best way to save money during a talent crisis is retention. What might be the most cost-effective is to consider retention (or resigning) bonuses. Plan for this by budgeting bonuses as a larger back-end payment; distributing the money differently to create incentives for contingent labor to continue full-term. Bonuses will also prove an incentive to renew contracts.

6. Investigate Passive Talent

Head off the talent crunch by engaging passive candidates now. Start by cultivating a community of talent—through social media, blogging and online groups. Address issues that are relevant to contract workers; discuss taxation, continuity, finding contracts and bridging the gap between jobs. Involvement in communicates will increase inquiries from interested candidates, as well as creating a social supply of contract workers to call upon when times are tough.

There are obviously no guarantees that the temporary worker crisis will actually happen in 2013. However, this does not imply companies remain unprepared. By following these steps, any organization can be prepared to employ effectively when the need arises—and maintain continuity of production by minimizing empty desk time.