Businesses need a strategy for tapping into flexible labour resources

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By John O'Reilly, Operations Director at Flex Recruitment Plus.

Britain is back in business. As the Bank of England forecasts growth of around 3% for the UK economy in 2014, and manufacturing growth is reported to be the strongest for a generation, companies are reviewing their resources and many will find it necessary to take on staff within their warehousing and logistics operations to meet rising demand.

However, retailers and manufacturers that suffered the hardships and financial pains of laying-off staff during the recession will be reluctant to expose themselves to the risks of recruiting more direct labour.

It's not difficult to see why. The Chartered Institute of Personnel and Development (CIPD), in its March 2012 Work Audit, estimated that it cost businesses an average of £13,000 to make an employee redundant and that from the start of the jobs recession in 2008 to March 2012 UK employers paid out a total of around £35 billion.

Clearly, companies need to be very confident that any rise in business prospects is sustained and predictable for the long-term before committing to hiring again.

But with UK businesses increasingly exposed to dynamic global markets, strong competition and high volatility in demand, the risks and 'unknowns' of doing business today make predicting demand extremely difficult, and with it, calculating any reliable figure for future labour resources.

A new strategy for recruitment is required. Businesses need a more flexible approach to acquiring and retaining skilled staff for warehousing, manufacturing and logistics tasks – one that minimises risk to the business and potentially, offers more to the individual.

The issue for most companies gearing-up for a resurgence in demand is finding the right balance between hiring permanent employees and temporary staff. How do you best acquire and retain important skills within the business? What are the legal and financial commitments to those employed, either permanently or on a temporary basis? And how easy is it to adjust labour resources to the ebbs and flows of current business needs?

The wider context of these questions comes down to: How can companies be responsive to the vagaries of the British economy, flexing their resources to meet demand, whilst minimising exposure to risk?

Although many companies use agency labour for meeting immediate short-term needs, few are deploying agencies to deliver longer-term strategic advantage. This mind-set needs to change. Skilled individuals do not necessarily have to be retained as permanent staff. By partnering with an agency that has a rich pool of skilled labour under employment contract, businesses can tap into skilled resources on a flexible basis, without the risks and complications of taking on staff directly themselves.

But how can agencies shoulder the risks of having skilled people under employment contract? And what level of flexibility can be achieved?

By virtue of having a broad base of clients, a large independent agency can efficiently manage a pool of employees, moving them between contracts as demand dictates. By doing so, risk is mitigated across the 'employment opportunities' landscape – allowing the agency to flex accordingly. In addition, using specialist tools and models, an agency is better positioned to flex workers' hours up and down in response to business needs. These tools also help with finding people with the right skills for the job.

For instance, FlexPlus, with a database of around 400,000 people, uses technology to track the skills of individuals, so that people can be placed in the right areas. But training people to have the skill-sets required for tasks such as order picking, put-away duties, managing teams, or driving HGVs, is an important part of the mix too. Through proper training, provided by the agency, individuals can be developed and readied for a wider scope of job opportunities.

Importantly, there are major advantages too for workers on a long-term agency contract. If one assignment terminates they can be placed elsewhere, giving them greater job security. And being on a Paid Between Assignment contract offers the individual further guarantees of income. Also, an agency environment offers a sound platform for developing further skills and expertise, and provides the individual with the opportunity to experience different challenges across a broad mix of businesses. But for many younger people looking for a job, acquiring skills via the agency route places them in the best possible position for gaining employment at the end of the course.

For any employer, checking compliance on a prospective employee's eligibility to work in the UK is a time consuming activity. In the aviation sector, 'Known Consignor' rules are particularly stringent and require individuals to have five years of verifiable employment history with no gaps in excess of 28 days. Getting a verifiable work history on someone that has been employed outside the UK for most of that time makes it a tough call. But then add in drug screening and medical testing prior to using mechanical handling equipment and the whole management process of bringing in new staff becomes very time consuming.

So why are companies taking on these onerous tasks themselves, rather than focusing on their core competencies? Specialist teams within an agency can efficiently carry out screening tests and compliance. Or if the agency provides their own employees, then these checks are the agency's responsibility.

If businesses wish to take advantage of the booms, and protect themselves from the expense of redundancy payments in the downturns, they must build an agile organisation that is capable of flexing its workforce to the demands made on the business. Outsourcing to an agency that can provide the skilled labour resources needed, as agency employees, offers the business the flexibility it needs to protect itself from the vagaries of the UK economy.

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