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  • Pamela Murray

5 Ways Contract Staffing Can Help Your Business During a Recession



The Great Recession hit businesses hard, especially small businesses.  According to figures from the U.S. Census, more than 223,000 businesses with 100 or fewer employees went under from 2008 to 2010.  And when they closed their doors—forever—more than 3 million American workers lost their jobs.

WHY ARE RECESSIONS SO HARD ON SMALL BUSINESSES? Census Bureau data show unequivocally that the Great Recession hit small businesses harder than their large, enterprise counterparts.  And although the effects of the current economic downturn aren't yet known in their entirety, early numbers indicate that, once again, small businesses are less able to weather the storm than big ones.

Among the chief reasons for this is that small businesses generally have far less cash resources.  They tend to live hand to mouth, and several months of reduced cash flow can make it impossible for them to pay their employees or the vendors with whom they work.  In addition, small businesses have fewer customers and are less diversified than large ones.  When even a relatively small percentage of their customers stop buying, it can set up a chain reaction that quickly turns into insolvency.

Fortunately, there are things small businesses can do to survive a recession.  One of these is by leveraging contract staffing.

WHAT ARE THE MAIN BENEFITS OF HIRING FREELANCERS AND CONTRACT WORKERS? Every business is different, of course, with different business goals and different hiring challenges.  That said, most businesses realize similar benefits from temporary staffing, including the following 4:

1.  YOU'LL SAVE MONEY As noted above, one of the principal reasons small businesses don't survive a recession is running out of money.  Hiring freelancers and contractors are one of the best ways to cut costs.  First, you don't need every employee on a permanent basis as some projects, especially highly specialized ones, can be completed in a relatively short time frame.  Second, full-time employees come with typically excessive costs associated with benefits like health insurance.  To protect your business, you need to carefully assess which jobs require full-time, permanent employees, and which can be performed by contract workers.

2.  YOUR BUSINESS WILL BE MORE AGILE There are of course advantages to hiring permanent employees.  For example, they can be more acclimated to your business simply because they're with you for a longer time period. 

But there are also advantages to working with freelancers and contractors.  One of these is their ability to meet immediate, one-time needs.  For example, if you need to build or redesign a website, it probably makes more sense to outsource to a digital marketing agency than increase the size of your in-house marketing and IT teams. 


Outsourcing everything from HR and payroll to some portion of IT and marketing operations to freelancers will make your business more flexible, empowering you to turn on a dime as your business grows and your needs change.

3.  YOU'LL BENEFIT CONTRACT WORKERS' EXPERTISE Most full-time employees wear more than one hat.  For example, your marketing people need to handle everything from maintaining your website to generating new leads and writing the content that drives lead generation, online conversions, and increased sales. Freelancers and contractors, on the other hand, are specialists.  Most do one thing only, but they tend to do it extremely well.  In addition, to stay relevant, freelancers need to know the latest trends and developments in their field.  This ensures your business will benefit from the high-quality work they perform, making your business more productive, and more competitive.

4.  YOU'LL RAMP UP YOUR BUSINESS NETWORK The nature of their work requires freelancers to maintain critically important associations with other freelancers in their field, as well as with multiple other businesses.  Some of those other companies will be competitors of your business, but many won't.

In hiring freelance workers, you get the benefit of their entire business network.  They can, for example, suggest working with other companies that can help you solve protracted problems and improve critical business operations, like customer service, sales, training, and marketing. 

IN CONCLUSION One of the reasons a recession can wreak such havoc on small businesses is that these economic downturns lead to unpredictability.   During a recession—like the one the country is currently experiencing—small business owners can't say with any certainty whether current conditions will remain stable, improve or worsen.  Temporary staffing and hiring freelance and workers, by reducing costs and making your business more adaptable, will bring back some measure of predictability to your business and, as a result, help you survive the recession.

Of course, for businesses with little experience in working with freelancers, that can also be a significant challenge.   That's where we can help.

To learn more about the ways our contract-to-hire, long and short-term projects, and direct placement services will help you make it through the current economic crisis—and take your business to the next level—contact us today.


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