While recovery from the Great Recession is well underway, in its wake there have been socioeconomic shifts that seem to signal permanent change.
Home ownership is at its lowest rate in 20 years, and many young Americans are choosing to become lifetime renters. Before the recession, the savings rate averaged 2.5 percent. Now it has more than doubled. And even though all 8.7 million jobs lost have bounced back, perhaps the biggest change is in the way companies—and many workers—view employment.
One of the big shifts? Employers are using staffing firms to fill job openings instead of hiring people directly.
“Imagine a company with an internal work force of 500 employees who had to shed 300 of them during the recession,” notes Jason Leverant, president and COO of AtWork Group, a Knoxville, Tenn.-based multispecialty staffing franchise that has experienced boom times in the past few years. “As the economy returns, and they need more employees, they are skeptical of going back up to 500. They ask, ‘Is this economy going to hold?’”
The solution, Leverant says, is hiring through a staffing agency. “They lean on us. If they shed bodies, it’s on us. It’s now more of a just-in-time work force that follows the ebb and flow of industries. Now, post-recession, that’s a huge value for employers.”
It’s also a huge value for AtWork, which has more than doubled its unit count to 75 since the end of the recession. System revenue has increased from $66 million in 2009 to more than $164 million in 2014, with expectations that this year the company will pass the $200 million mark.
We enlisted Leverant to fill us in on the big business of temporary staffing.
Why wouldn’t a company handle its own hiring and firing?
Being an employer has gotten a lot harder. In 1900 there were two employment laws. In 1980 there were 125. Now there are 2,200 different laws or clauses that employers have to comply with. They now face the Affordable Care Act, workers’ comp, health insurance, paid sick leave and the EEOC (Equal Employment Opportunity Commission). There can be multimillion-dollar penalties for noncompliance. They want to shift direct and potential risk away from the company.
We’re a separate employer of record, and our clients see the true value and time savings of using a staffing firm instead of putting everything on their HR staff.
What’s different about AtWork?
We started in 1986, then began franchising in 1992 as four different concepts: a medical, a general personnel, a senior care and an executive search franchise.
We realized during the recession that to survive, our franchisees needed to be diversified, and those with a hand in enough industries could weather the storm better. So in 2011 we consolidated our franchises, and now franchisees can add those highly developed secondary programs for just a training fee. That has made us stand out, and we’ve seen phenomenal feedback from our franchisees and clients in the field. We’re in the best position now in the brand’s history.
How do employees feel about working for staffing agencies?
It’s not just employers who are driving these changes. People in the work force today have a different viewpoint about temporary staffing than they used to. Everybody wants everything on demand now, and it’s the same in staffing. It’s a shift in lifestyles. Some people like to come in and work on temporary assignments, to say, “This is where I want to work and when I want to work.” With the skills gap opening up there’s a demand for all different types of skilled workers.
Do you believe the growth in your industry will continue?
U.S. employers have seen a structural shift. We thought maybe it was a blip and when things recovered it would go back to normal. But we’ve seen five years of growth in staffing. Our customers vary from Fortune 100 companies to mom-and-pop shops with one or two heads that don’t want to deal with employment law. Things are not going back to the way they were.