Hiring This Type of Employee Can Protect Your Business From a Volatile Market Everyone talks about diversifying your portfolio in terms of investments, but what about diversifying your portfolio of employees? Deploying different types of permanent and flexible workers can reduce the number of idle employees, cut down on unnecessary costs and help your business succeed.
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Fine-tuning the use of labor is one of the constant challenges for businesses. Hire too many people and you may be paying workers to sit idle. Bring in too few and you'll be leaving revenue on the table as you have to forgo opportunities. To avoid downtime and unused resources, you have to get things just right, all the time.
The problem is becoming more acute, too. Even if we put aside the uncertainty of the economic cycle and shocks like the Covid-19 pandemic, the seasonality of demand is increasing. In the years before the pandemic began, the volatility of consumer spending on services had reached levels unseen since the early 2000s. You'd have to go back almost as far to find the same volatility for spending on goods, which bounces around much more.
Whether it's the spring events season for services or the summer ramp-up to prepare for fall spending on goods, changes in payrolls can be more dramatic than ever. To deal with these ups and downs, it helps to take a page out of investing books: diversify your portfolio. By using a variety of different sources of labor, you can insulate your business from volatility and reduce risks like downtime, burnout and more.
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A broader range of options
Human resources managers and executives have more tools than ever to deal with fluctuations in demand. Not too long ago, their main choices were just full-time or part-time workers, and employment was always for a fixed number of hours. These days there are many more choices in the market.
Permanent full-time and part-time jobs still exist, of course. But there are also job shares, whereby two or more people share and cooperate in the same position. People can work remotely or on hybrid schedules where their jobs allow. Freelancers can offer extra leverage. Now there are flexible workers who can engage with companies in myriad ways: for a single shift at a time, on a roster of rotating workers or via long-term assignments.
All of these workers bring different attributes to the table: the knowledge and skills they have coming in, the additional training they require, the hours they are willing to work, the pay they expect to receive, the benefits to which they are entitled and the budget lines to which they belong. Together, these differences can fit together to make a diversified portfolio of labor options.
When permanent workers need time or get burned out from working extra hours, flexible workers can pitch in. When flexible workers need training, permanent workers are there to guide them. In periods of peak demand, flexible workers can go on long-term assignments. When demand is more sporadic, they can come in when needed to support a team that's not yet ready for more permanent hiring.
Moreover, some workers may not want every kind of job — a flexible worker may not want a permanent position and vice versa. So if you want access to the entire labor pool, with all of its diverse talents, then you have to offer a variety of options for working together. And by leveraging flexible options, you can "try before you buy" by auditioning workers one shift at a time. With a diversified payroll, hiring isn't just a zero-or-one decision anymore.
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Thinking like an investor
Of course, adopting this approach takes some planning. The bulk of your payroll will always reflect the overall growth of your business. These are your steadiest employees who will be with you for the long term, so you'll often want to gain their loyalty by offering them permanent positions.
Another component of your payroll will help you to control volatility along the way. These are the workers who will show up when others don't, or whose hours can easily change in line with demand. Because shifts for flexible work fill so quickly these days, using flexible workers in your payroll is like adding "just-in-time" labor to a just-in-time supply chain. On our platform, the average time-to-fill is less than 12 hours across almost all roles.
You can add other types of workers to your portfolio, too. You might use a specialized temp agency to bring in experts for short stints, perhaps for launching a new product line or leading a team of recently hired workers. You might hire experienced senior staff who don't want to work full-time as part of a job share. You can also turn one type of worker into another, like hiring an outstanding flexible worker for a full-time position.
It's worth noting that a team with more kinds of workers can be a little more complex to manage. Fortunately, there are new software packages with AI-driven algorithms that can draw up schedules for a variety of workers according to their preferences and businesses' needs, and flexible work platforms will often take care of the recruiting, accounting and payment functions. Just as for investors, the tools are out there — and the winners will be the ones who use them.