Lessons of the “Great Recession”
The emergence of a new workforce
CANADA’S ECONOMY WEATHERED THE GREAT RECESSION
better than most countries, but the impact of the downturn was still felt across
almost all sectors. Companies in all industries have had to adapt to the re-
alities of a recovering economy and one area where changing attitudes are
most evident is hiring practices.
As companies search for efficiencies to lower their operating costs, many
are discovering the benefits associated with contingency staffing and the
ways in which HR outsourcers can accommodate the changing needs of
employers in a new economy.
While Canadian job numbers are
showing signs of improvement,
unemployment remains high.
Contingent vs. permanent:
The changing profile of the Canadian Workforce
Over the past decade, contract work has will extend all the way up to C-level exec-
outpaced all other forms of temporary utives. The use of professional short-term
employment in the Canadian job mar- contingency workers has been the fastest
ket, surging against rising unemployment growing sector in the temporary staffing
during the 2008 financial crisis and result- industry over the past few years. Indeed,
ing recession. The reduced fixed cost of the “interim executive” is a way for a com-
contingent labour has encouraged many pany to take advantage of the expertise
companies not to replace positions elimi- required for a senior-level role without
nated during the recession with full time having to make a long term commitment.
permanent employees. Instead, fixed
term contract workers and temporary For example, “contingent” executives can
staff usually offer similar productivity at be tapped to turn around a failing com-
less risk and lower costs. pany or one that has just emerged from
bankruptcy. In this scenario, the interim
Overall, 1.8 million workers held tem- executive is brought in to help streamline
porary positions in 2009, accounting for operations and reorganize the company
12.5% of paid employment. This is a slight before moving onto their next role.
decrease from the peak of 13.2% in 2005.
Even small to mid-size firms can benefit
While the employment landscape may from “temporary” talent. A fast-growing
What’s the damage?
continue to look bleak in the short term, company, for example, that needs to cre-
experts predict that the Canadian labour ate infrastructure and personnel process-
market will continue to make gains in 2011 es to support its expansion may consider
and that our recovery will outpace most hiring an interim human resources direc-
of our G20 counterparts. Canada has lost tor who can work a day or two a week
The current condition of the Canadian labour market have come in contract work. In 2009, 52% of all tempo- over 427,900 jobs since the onset of the for a year or more. By hiring a contract
demonstrates that corporations are attempting to con- rary jobs were contract positions, accounting for almost economic crisis, but has replaced those employee the organization receives the
trol labour costs and are approaching the idea of per- one million workers, Statistics Canada’s Diane Galar- by creating 398,000 new jobs, according strategic guidance it needs, but doesn’t
manent hiring with a newfound caution. neau reported recently. “Since 1997, contract employ- to Statistics Canada. The challenge is that have to absorb the burden of retaining a
ment has been the main source of growth in temporary many of these new positions are lower full-time employee.
In a January 2010 article in BusinessWeek, Peter Capelli, work,” she said. paying contingent positions, as opposed
director of the Center of Human Resources at the Uni- to relatively high paying permanent jobs Today, more than 70% of employers retain
versity of Pennsylvania’s Wharton School, said the re- Many experts believe that companies who saw the in the manufacturing or construction in- the services of at least one kind of con-
cession has prompted more companies to utilize “just- Great Recession as a way to reorganize while gain- dustries. tingent employee. Researchers conclude
in-time labour forces that can be turned off and on like ing greater efficiency and flexibility are unlikely to recall that the contingent workforce is expected
a spigot.” those positions now that the economy has reached pre- As organizations continue to face a to grow at three to four times the rate of
recession levels. In an April 2010 New York Times article, shrinking qualified workforce, compa- the traditional work force and will com-
“Employers are trying to get rid of all fixed costs,” says Susan Houseman, senior economist at the W.E Upjohn nies that look to non-traditional ways of prise approximately 25% of the global
Capelli. “First they did it with employment benefits. Now Institute for Employment Research, said, “To the degree filling these critical roles will have a dis- workforce by 2012.
they’re doing it with the jobs themselves. Everything is there’s more uncertainty coming out of this recession tinct advantage over those that rely on
variable.” than in past recessions, we would expect companies conventional methods. It also means that
to be more cautious about taking on more permanent the perception of contingency workers
While the Canadian job market has recovered, Statis- employees…so they’d be looking for more of these as largely “semi-skilled” will dramatically
tics Canada reports that full-time positions declined by non-standard employees to hire.” change as the move towards a flexible
3.8% between 2008 and 2009. Temporary employment workforce—one increasingly focused on
has seen a modest growth of 0.7%, but the key gains temporary, project-based assignments—
Which industries will
beneﬁt most from a
Professional industries are poised to benefit sig-
nificantly from the shift to a contingent workforce. By
replacing retiring or already eliminated permanent
positions with temporary or contract contingent work-
ers, they can maintain flexible, responsive structures
that can adapt quickly to changing business needs
and market demands. Skilled trades that provide care
and support services to the elderly are increasingly
moving towards this model in order to effectively meet
the needs of an aging population that will continue to
grow over the next two decades.
> The shift is on.
Manufacturing is another area of the economy that Despite the residual uncertainty
is undergoing fundamental changes. While we are plaguing the Canadian economy, it’s
seeing resurgence in this industry, the recovery in this clear that the nature of employment
sector is slow and uncertain and employers are in- itself is in the midst of a seismic shift,
creasingly turning to contingency staffing models for and that the workforce of the future will
flexibility. look very different from the workforce
of the past. The notion of “permanent”
Adecco is seeing many workers who were impacted employees will become the exception
by layoffs returning to the workforce as contingent rather than the rule, and companies
workers. In fact, one Adecco client is experiencing will need to respond to the projected
greater workforce stability through a contingent staff- growth in the job market strategically
ing plan that has reduced their average turnover rate in order to gain a competitive edge.
from 8% to 2.4%.
As companies across Canada — and the world — embrace
contingent staffing, Adecco has some important insights on
how a contingent workforce can add value to any corporation.
Convert fixed costs to variable ones Focus on core activity
Determine which processes can be han- Understaffing decreases the likelihood of
dled by contingent staff and reduce core a department meeting its productivity tar-
staff to levels necessary to maintain nor- gets, which could impact related depart-
mal operations. ments. Shift the administrative burden
when you use temporary staff by trans-
Eliminate overtime ferring all costs associated with process-
Using temporary employees in place of ing and administering payroll and ben-
overtime is another way to reduce labour efits from your company to a staffing firm.
Avoid costs associated with burnout
Hire specialists Many companies may take the idea of
The idea of the “temp” being a semi- “lean and mean” too far. Pushing full-
skilled professional is a thoroughly out- time staff to produce more with fewer re-
dated notion. Explore the idea of hiring sources increases stress and diminishes
highly skilled contingency staff for short- morale, which can lead to problems with
term projects—as far up as C-suite ex- quality, productivity, absenteeism, and
ecutives. Often these specialists can bring turnover. Take the pressure off by using
skills and a fresh perspective that may be contingent workers. Explore the benefits
lacking in your current team, and can of flexible work weeks for all employees,
leave once the project is complete. including compressed work weeks—they
can also help boost morale and even
Reduce training costs help companies save operational costs.
Cut training costs and improve qual-
ity and productivity by employing skilled Be smart about seasonality
temporary workers. Also, encourage In industries where workload is impacted
knowledge transfer by hiring back retired by the season, such as retail, contingent
workers on a contingent basis; they’ll staffing adds much-needed extra help at
be able to pass on their knowledge to minimal cost.
Maintain a good brand image
Maximize productivity of star performers Layoffs can damage employee morale
Allow top performers to focus on what and your reputation as an employer;
they do best by using temps for time-con- however, a contingent workforce of-
suming jobs. Don’t impede the productiv- fers the flexibility to increase and reduce
ity of star performers with tasks that could headcount as necessary, with less nega-
be handled by a temporary member of tive impact on your people and your
your staff. brand.
The 21st century workforce
According to independent consulting economist temporary and contingent labour affords firms the
Peter Anderson Ph.D., “Job market trends in Canada capacity to risk expansion into new markets and in-
have presented HR strategies with a ‘made-in-Can- dustries by limiting the fixed long-term costs.
ada’ twist. The ‘right kinds’ of workers are harder to
find; firms are under increasing pressure to find the As the Canadian economy enters into a post-reces-
talent to satisfy expansion plans.” 1 sion era, it is critical for the 21st century workplace to
be organized for the 21st century workforce.
In the wake of higher costs in sourcing qualified can-
didates to satisfy their growth needs, the use of the For more insights into the economic recovery and
contingent labour model provides Canadian busi- what your organization can learn from it, contact Ad-
nesses with an effective balance between cost and ecco, visit Adecco.ca, or check out our monthly re-
efficiency as the market changes. The flexibility of ports in the Employer Bulletin.2
From “The Global Economy and HR” written by Peter Anderson, Ph,D. In Adecco Canada’s Lead magazine #9.
To be included in our Employer Bulletin mailing list, please e-mail us at marketingmanager”adecco.ca.
About the Adecco Group
The Adecco Group, based in Zurich, Switzerland, is the world’s leading provider of HR
solutions. With over 33,000 FTE employees and more than 5,500 offices, in over 60 countries
and territories around the world, Adecco Group offers a wide variety of services, connecting
more than 700,000 associates with over 100,000 clients every day. The services offered
fall into the broad categories of temporary staffing, permanent placement, outsourcing,
consulting and outplacement. The Adecco Group is a Fortune Global 500 company.
Adecco S.A. is registered in Switzerland (ISIN: CH0012138605) and listed on the SIX Swiss
Adecco has a network of over 50 branches, servicing thousands of Canadian
organizations each day by providing the top talent they need to succeed in today’s
competitive market. The company employs several thousand temporary Associates
daily, making Adecco the largest Recruitment Solutions and HR Consulting Services
Company in Canada. Adecco Canada offers flexible contingency workforce solutions
under the Adecco brand along with professional placement & search, and specialized
brands such as Holloway Schulz and Roevin Engineering and Technical.
We specialize in connecting employers with exceptional technical and IT professionals.
Yes, we are part of Adecco—the world’s largest HR staffing firm—but we are the part
that is focused exclusively on recruitment of technical and IT talent.
For more than 40 years, our experts have been building successful partnerships with
some of the world’s top organizations, helping them optimize resources, improve
productivity and exceed their financial goals.
Our experts know your local market inside and out and their local relationships help
them identify the area’s top talent.
We work closely with you to anticipate your growing needs and make sure you get the
most out of our strategic value.