Is recession fuel for the staffing industry? : Corporate views on staffing in times of recession

University essay from Umeå universitet/Handelshögskolan vid Umeå universitet; Umeå universitet/Handelshögskolan vid Umeå universitet

Abstract:

At the time of writing, the business world is currently recovering from a recession that struck globally in the late 2008. The financial crisis brought many consequences, not least in the labor market. In meantime, media is reporting of the increasing trends of companies outsourcing their employment needs, by using staffing companies. Could it be that there is a correlation between the recession and the companies’ choices to do so?

By revising literature on the topic we have found that the companies need for flexibility seem to be their main reason for using staffing companies. We have also come to review the first reports on the current increase of staffing company use in the US claimed to be caused by the current recession. Regarding the recession, we have come to find that it does have a structural impact on the labor market according to literature. An impact, that many claims is not temporary, but is here to stay.

We have departed from retroduction with a touch of abduction when investigating our research problem. In practice, we have conducted a study based on surveys where we have asked 37 people in managerial positions at the top 100 largest employers in Sweden about their views on the recession and their attitudes towards the staffing industry. In addition, we have conducted an interview with a manager from a staffing company in Sweden to get another view on the use of staffing companies.

The findings of this study include; even though several references in this paper forecast rapid growth during times of expansion for the staffing companies, this is not reflected within the responses in our sample. The companies perceive the situation of temporary staff as being better than what some theory suggests. There is reason to suggest that large companies that use staffing companies are moving towards a permanent need of temporary labor, and the respondent of such companies generally perceive staffing companies as a good option for mitigating labor-associated risks.

It is difficult to draw definite conclusions based on our findings. We have opted to give the reader some insight as to how the companies perceive the staffing industry, and how a manager of a staffing company perceives its current state. We would like to encourage further research to use the questions and suggestions raised in our paper to conduct tests in the area of temporary staffing from a corporate perspective to nourish the debate in the society with a scientific point of view.

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