A Labor Shortage Crisis Looms, and Contract Staffing Could Help

Birth rates are dropping

Recently, you might have seen a report about how the birth rate, specifically in the US, is falling dramatically. A recent New York Times post quoted the report by saying, “There were an estimated 3,788,235 people born in the United States last year, a 2 percent decrease from 2017 and the lowest number of births in any year since 1986.”

While the reasons behind this decrease are still being debated, what’s not is the lasting impact this trend could leave in the workforce going forward. That is just one reason why contract staffing will be more important than ever going forward. 

Flexible Working & Shift Covering

As fewer people age into the workforce and more people age-out, we will see issues with staffing open positions on a consistent basis. There will be an increase in the need for contingent workers and/or contract workers. 

These new employees and contractors will need to be flexible in order to fill the gaps left by a decrease in the workforce. With that in mind, contract staffing and recruiting firms should be getting ready for this looming threat by ramping up their scale and keeping this in mind for future marketing.

It’s Not Just the Future

Though staffing issues are set to become a serious issue as the population ages, it’s also an issue that’s already come to a head in a few industries. Skilled labor jobs like welding and carpentry are high in demand. 

In addition to those, college-education related jobs like construction management and other STEM fields are experiencing a sharp increase in need. See below for a graph showing the list of the industries that are currently experiencing labor shortages in comparison to their unemployment fields. 

[graph like this: https://www.cbsnews.com/news/these-are-the-industries-with-the-biggest-labor-shortages/]

How does Will Contract Staffing help?

As you can see, there are fewer people looking for jobs in shortfall industries. Contract staffing comes to the rescue here by allowing businesses to have a temporary worker when they need one. This will help the short-fall of talent in multiple ways. 

Flexibility

Using contract workers is the perfect way to get people working when a company is in need. Offering a flexible work structure makes these roles more attractive to candidates. This also expedites the on-boarding process, making it easier to get people started quickly. 

These workers may also be able to work multiple “gigs” at once, allowing them to earn what they want, but also giving the companies the labor they need. Since there is a worker shortfall, making sure that organizations have someone available when they need them will take precedence over a company having someone on full-time. 

Trial-Running

The other issue that companies are having is making full time offers to candidates. With such a small pool of applicants (unemployment is currently below 4%), companies are having a harder time finding someone who’s perfect for their open role during the interview process. 

That’s where contract workers can come into play. Contact workers allow for the testing of a person before making a full time offer. This “try before you buy” scenario benefits the contractor and the company. The company can evaluate if the person is a good fit for the role, the culture, the skills etc. 

The contractor can get their foot in the door at a company for which they really want to work. This win-win scenario should be part of every recruiter’s vocabulary if they are placing contract candidates.

Get Ready for Increasing Demand 

With the large labor shortage, recruiters need to be ready for clients to come to them for help with finding the right candidate, whether that’s full-time or temp work. To prepare for this, recruiters should make sure they have a constantly growing and changing pool of applicants that can be placed into jobs. 

Marketing to these applicants should focus on how they can find the perfect job for them, work extra for the holidays, experience multiple workplaces, and stay employed as more companies transition to freelance and contract positions. 

Showing the temp workers that go through your team that they are ahead of the game is vital in transitioning them from a “temp work is for people who can’t find a job” mindset to a “contact work is the way of the future” mindset.

Market to the Company Too

Finally, don’t forget to market your services to companies within the shortage list early. By getting in with them now, you’ll save yourself the competition later as they will already have a recruiter they trust and know. They may even be choosing to work with a self service staffing model like the new Uber on demand workforce app.

With the unemployment rate so low, and the demand for workers so high, one could ask, “how could companies increase their demand in this type of environment”? Based on the birth rate data and the growing economy, in five to ten years, the demand for employees could be even greater, which is hard to imagine! 

If you develop your contract staffing business now, and develop relationships with clients for these types of placements, you will be in a great position to capitalize on this labor shortage in the future. Good news is FoxHire’s Employer of Record Service can help you get a head start.