Beyond the obvious question of how temporaries at or near minimum wage will be able to afford driving to their assignments, four dollar gas and the inflationary forces behind it will wreak havoc on the staffing industry in the year to come.
If it were just gas prices going up, an agency could simply focus on reorienting their candidate searches to place more emphasis on access to mass transportation and proximity to the job site. But the fact is, it’s not just gas. Gold just reached a record high, flying past the unimaginable $1500 mark recently, and the Japanese Yen, tsunami be damned, is gaining on the weakening dollar on a daily basis.
So really this is an issue of inflation. Blame the Federal Reserve if you want. They’ve been printing money fast. The Feds current monetary policy, QE2, has scared Wall Street and main street. Those skyrocketing market caps (take $30 billion for Groupon, as an example) can only be explained by an exuberance falsely generated in part by the rapid expansion in paper money and credit.
Be Ready to Negotiate
Economic turbulence is nothing new for staffing companies. If you’ve succeeded in the business this long, what with unemployment rates getting jacked around as they have, you know you you’re going to get hit on both ends. Temps need more money for gas. Clients will resist price increases. The only good news here is that all this creates disruption for your competitors as well, and many accounts that were previously locked up soon won’t be. Get organized, have a plan for introducing rate increases. Inflation is coming.
Make Location a Core Component of Your Searches
A temp will soon much prefer a nearby assignment that pays substantially less than one that makes them travel to the other side of town. You’ve got software with all kinds of nifty searches, add a filter for distance on them as well.
Use Smart Phones
A smart phone equipped with prospect addresses can save you a bundle of time and now that translates into big fuel savings as well. Get your sales teams to plan their routes better. Make five stops in an area where you used to make only two.
Get ready for the inflationary tsunami. QE2 has sent fuel prices soaring, and rumor has it that QE3 is coming soon.
History has shown that staffing companies that best plan their bill and pay rates to account for rational inflationary expectations can avoid disaster and score well against competitors not so well prepared.