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The unemployment rate is finally dropping, and the United States is adding jobs. But not all of the news is good.  Staffing Industry Analysts recently reported that mass layoff claims rose significantly in December.

Citing information from the U.S. Bureau of Labor Statistics, the article stated that unemployment claims caused by mass layoffs rose by 10.7 percent in December compared with November. It was a year-over-year increase of 5.5 percent.  Mass layoffs are defined as those in which 50 or more workers are let go from a single workplace at once.

Layoffs aren’t good for anyone.  They are of course devastating to the ones who are let go, but layoffs also can hurt a company’s reputation and the morale of their remaining staff, sometimes causing a reduction in productivity and employee loyalty.

Unfortunately, even though the economy is slowly recovering, it is still very volatile, and the financial outlook of a business can change almost overnight in this environment. That’s why many companies are turning to contract staffing for their post-recession hiring rather than committing to direct-hires.  With contractors, businesses can more easily match their workforce to their workload. When business is booming or they have special projects to complete, they can quickly ramp up their staff.  And if business slows, they can just as quickly end the contract assignments to make their workforce leaner.

If you have clients who would like to hire but are reluctant to do so due to the uncertain economy, you may want to suggest that they bring on contractors instead of making the direct-hire commitment.  By doing so, you could save the company and its workers from painful mass layoffs in the future.

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