We all know the economy over the past few years has been challenging. But did you know there is a word for this strange economic environment we’ve been living in?
Well, according to renowned human resources expert Dr. John Sullivan’s recent ERE.net post, there is: VUCA. VUCA stands for Volatility, Uncertainty, Complexity, and Ambiguity. It is a state where changes are fast, disruptive, and unpredictable, and where traditional HR, talent management, and workforce planning procedures are more or less doomed to fail.
Previously, companies could prepare for one most likely future scenario and maybe one or two alternatives. But in the VUCA environment, it’s impossible to forecast the future. A company could even have a hiring freeze in one department and rampant hiring in another.
Therefore, Sullivan advocates for a more “agile model” that can handle sudden changes “just-in-time.” He says that those in talent management should stop focusing on long-term employee retention and instead prepare for rapid increases and decreases in talent. They should also be prepared to deal with the fact that the skills needed by the company today could be totally different than those needed tomorrow, creating a nearly constant gap between the needed and available skill sets.
One of the ways Sullivan recommends that companies combat these forces is to use contingent labor (contract staffing) to respond to the sudden upturns and downturns and to bring in new skill sets quickly when needed. He also recommends outsourcing to help expedite this process.
This correlates with what we have been reading and what we have heard from the recruiters we work with. Contract staffing has typically been popular after recessions to help companies test the hiring waters, but it appears that companies are making contract staffing a more permanent part of their workforce strategy as the uncertainty continues. We are seeing companies maintain just a small core of direct hires surrounded by a much larger outer ring of more flexible contractors. After all, no one wants to relive the ugly layoffs that were commonplace during the recession. With contractors, companies don’t have to be afraid to bring in the talent they need because if things change, they can simply end the assignments. The contractors already know the assignments are temporary and are prepared for them to end.
In this environment, you can become a valuable resource to your clients if you are simply able to provide quality contractors very quickly to respond to their needs. And in the process, you can provide yourself with a more steady, predictable income through contract staffing during this unpredictable, volatile time.