We’re now two months into the second half of 2023 and economically speaking, things are looking positive. The Bureau of Economic Analysis reports that GDP grew 2.4% in the second quarter of 2023. The labor market remains tight with unemployment at 3.6%, a rate not witnessed in decades. However, according to the U.S. Bureau of Labor Statistics, the tight labor market provides the Federal Reserve with the flexibility to continue raising interest rates to fight inflation. Currently, inflation rests at 3%, a percentage point higher than the Federal Reserve’s longer-run goal of 2%.
Does the state of the current U.S. economy equate to a “soft landing” and the evasion of a recession? Maybe, maybe not. Due to the expectation of continued interest rate increases and the potential ramifications, uncertainty remains among executives and their enterprises. Thus, many are considering strategies over the next six to 12 months to recession-proof their critical workforce and their organizations.
With that in mind, over the next few weeks, the Future of Work Exchange will feature a three-part series exploring several contingent and overall workforce strategies to achieve a recession-proof enterprise. Let’s begin part one this week with a look at our first three strategies.
Higher Utilization of the Contingent Workforce
The contingent workforce presents enormous opportunities for enterprises. It opens the door to global talent that was not accessible by the organization in the past. The remote/hybrid work model means attracting contingent workers who are seeking workplace flexibility and balance. Once in the door, maximize how contingent workers are utilized within the enterprise. First, whether it’s a unique skillset or competency, contingent workers can help train employees in those areas to expand the capabilities of the entire workforce. Second, integrate contingent workers into the workplace culture, providing a greater sense of purpose and achievement — enhancing collaboration and teamwork. And third, ensure a diversified recruitment strategy to hire contingent workers who bring unique perspectives that can translate into potential innovations and business solutions.
Use of Skilled Contingent Workers for Critical Projects
The contingent workforce is much more advanced than it was a decade or more ago. The gig economy is ripe with contingent workers who bring best-in-class competencies to organizations of all sizes. The timing couldn’t be better with many HR leaders and recruiters now shifting to skills-based hiring for both their permanent and contingent workforce. Today’s roles and projects often require specialized skills, making freelance and contingent workers ideal candidates for executing those opportunities. Positions can remain open for several weeks, costing enterprises time and money until those roles are filled. Instead, tap into top-tire talent within the extended workforce to deliver immediate performance and drive long-term value.
Improve Overall Operational Agility for the Future
To best recession-proof your enterprise, agility is required. What does this mean exactly? It means having the organizational capabilities to adjust to changing conditions quickly and easily with little to no operational disruption. Enterprises must optimize their processes and workflows in all areas of the business for greater flexibility and resiliency. In procurement, for example, securing a second and possibly third source of supply mitigates the risk of production delays and product shortages. Implementing automation for accounts payable streamlines the payment process and reduces processing errors. And in HR, leveraging contingent labor during periods of peak demand ensures workforce optimization.
The economy is proving resilient against a recession. However, implementing workforce strategies today that can weather an unexpected economic downturn will only pay dividends in the long term. Next week, we’ll explore three more recession-proof enterprise workforce strategies.
