Preparing for a Recession: 7 Ways to Maintain Talent Quality Whilst Cutting Costs

By Sam Smith

As the economic situation in markets across Europe continues to deteriorate, firms are increasingly asking themselves tough questions about their bottom line. Recession, persisting inflation, and a labour market that is fraught with uncertainty are forcing many firms into drastic action. Many high-profile companies have begun laying off large percentages of their workforce in order to cut costs, and there is the potential for firms of all sizes to make similar, difficult decisions as they look to set themselves up to survive the tough time ahead. Clearly this will have an enormous impact on a firm’s ability to retain talent, which is just as crucial as cost-cutting in ensuring that a business can thrive in tough economic times.

Contingent workers, off payroll workforce including temporary workers, independent contractors and consultants, can have a hugely positive impact on a firm’s ability to be flexible, and ensure they have the right skills, in the right place, at the right cost. However, in order to fully maximise the potential of these workers, firms must have an effective contingent management strategy and avoid knee-jerk decisions. There are seven key things to bear in mind for firms who are looking to cut costs without sacrificing their top contingent talent.

1. Use accurate and up-to-date talent intelligence data. 

In a highly competitive labour market, when having to focus on cost savings and efficiency, data is critical. By gathering and leveraging fully up-to-date information on hiring market rates from a range of sources, firms put themselves in the best possible position to get the right talent at the right price.

2. Widen the talent net. 

If firms limit their access to talent, it can cost them vast sums of money in hiring, as well as suppressing talent quality. Firms that establish their own curated talent communities, and reduce reliance on staffing and recruitment agencies, can improve their access to talent and drive better outcomes. In addition to this, AI-powered matching tools can be employed to find the candidate for each role. 

3. Leverage an integrated platform. 

Creating a single-entry point for all off payroll workers simplifies the process, eradicates the need for multiple platforms and a complex integration landscape. Providing the hiring manager and HR a simplified process increase adoption, compliance and improves the experience for all parties.

4. Ensure a vendor-neutral partner is used. 

Often in the industry, organisations use staffing firms that act as their Managed Service Provider (MSP) to find contingent labour. However, this leads to the potential of the MSP favouring its own staffing services and candidates, meaning firms can miss out on key talent and incur higher costs. If a vendor-neutral partner is used, free from affiliation with a staffing agency, talent searches can be optimised, and costs reduced.

5. Strive for an efficient Statement of Work management. 

Firms spend a vast amount of money on services procurement, however, often do not have the correct systems or processes in place to ensure services procurement spend is captured. Firms looking to minimise these inefficiencies should implement a services procurement solution that streamlines the whole process, end-to-end. This will improve decision-making by providing managers with critical data, ultimately allowing firms to save precious resources.

6. Redeploy existing workers. 

A critical mistake that firms make when a contingent worker’s assignment ends, is letting them simply walk out the door. Increasingly, savvy companies are redeploying these workers by identifying other open positions they would be suitable for and moving them into that role instead. This can fill crucial talent gaps, saves time, and also save money on hiring and retaining processes associated with finding and onboarding a totally new contingent worker. 

7. Assess length of stay and tenure policies. 

Another way to impact costs is to evaluate length of stay and tenure policies. By extending active high-quality workers, firms may be able to get rebates from suppliers, as well as more favourable rates. Moreover, the classification of these workers with longer tenures can reduce markups and further lower costs.

With tough times ahead, it is crucial for firms to use every tool at their disposal, if they are to survive and grow. Contingent workers provide huge benefits for businesses at all times, and in a recession, this is no exception. Effectively managing these workers can have an enormously positive impact on a business’s bottom line whilst ensuring that they have the top talent in place to remain dynamic, flexible and effective.

About the Author

Sam Smith is the President of EMEA at Magnit, a global leader in contingent workforce management. Sam is an accomplished transformation leader and is responsible for helping grow Magnit’s presence in EMEA. She has over 25 years of experience in helping the world’s leading brands reimagine their contingent workforce management programmes.