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Friday, Jun 2, 2023

Staffing Industry Says Cutbacks Are Mixed Blessing

Is there an upside to the economic downturn? Yes, according to some employers who say that the recession and its effects,layoffs, bankruptcies and rising unemployment,mean that they have a more qualified pool of candidates from which to offer jobs. Nate Dakar is a case in point. The president of San Fernando-based manufacturer MINDYS Cosmetics, which makes Sonya Dakar Skin Care, recently told the Business Journal that an advantage of the downturn is that it makes the hiring process much easier. “There’s a plethora of good, qualified people in this economy,” Dakar said. “The quality of the applicants is much better than what it was a year ago. We’re picking better people for around the same salaries as we did before.” Executives of Valley staffing agencies are also noticing this trend. “I would say that typically this is what you’d expect,” said Carrie Nebens, president of Equis Financial Staffing in Calabasas. “There’s more good people in our particular industry,finance and accounting. I’ve been waiting for this type of thing.” Nebens believes that this trend means that employers have more of an opportunity to find coveted workers. “You might be able to get someone you might not be able to attract in a more robust (economic) environment,” she said. Ted Milner, president of Executive Temps in Burbank, agreed. However, he also pointed out some drawbacks to the trend. “Employers could be reluctant to bring someone aboard knowing that they’re overqualified with the fear of them leaving and not staying. That’s the flipside,” Milner said. But Nebens doesn’t view this possibility as a problem. She said that good hiring is always about doing one’s homework. Therefore, a company could take a risk and hire a highly qualified worker if they believe that the person is a good cultural fit and, hence, unlikely to leave. Nebens also believes that employers have a role in making sure that they create a work environment that is enticing enough to dissuade workers from leaving. Employers aren’t the only ones who may be affected by a large pool of qualified workers hunting for jobs. Milner believes that that young or inexperienced workers will very likely suffer the most during the downturn because of this trend. “They’re now competing with people they normally wouldn’t be competing with for jobs,” Milner explained. Such workers may end up landing temporary jobs. The number of companies seeking temporary workers has gone up dramatically, according to Nebens. “Staffing companies are probably seeing more of a tendency towards temporary and consulting than towards permanent placement, direct hire,” she said. “Our temporary revenues are higher than our direct revenues.” At Equis, revenues for temporary placements were up 70 percent in 2008 over 2007. Permanent placement revenues increased as well, but by a mere 12 percent in 2008 over 2007. Nebens said that companies don’t want to take a chance on hiring fulltime employees because so many industries are experiencing peaks and valleys right now. Accordingly, hiring fulltime employees might prove financially unwise for some businesses. In times when the industry a business is in has slowed down, a fulltime employee might not have enough to do and, thus, the money spent to pay such an employee would be wasted. Milner has seen firsthand the toll the recession is taking on businesses, particularly small ones. He said that in his two decades of operation he’s never experienced an economic downturn with such far-reaching effects. “I’ve never seen the challenges economically since I’ve been in business that we’re facing now. There are more people out of work than I’ve ever seen in my lifetime.” Milner said that he’s also reactivated a number of workers, which means that people he’s formerly placed at companies have since returned to Executive Temps seeking work. “I’ve never seen as many re-activates come back to us in abundance at one time in my almost 21 years of business,” Milner exclaimed. Milner thinks that the number of tech companies who are outsourcing jobs is playing a role in the number of re-activates he’s seeing. “It’s making it much harder for Americans to compete in that arena,” he said. One way to combat the effects of the recession is to refocus our energies on small businesses, Milner believes. In November, he was involved in forming a task force that went before the Burbank City Council to ask the city to approach the studios and networks based there about employing small Burbank business for services rather than those based elsewhere. “I think if we’re going to move forward in really restarting this economy, you have to address the local small business,” Milner said. “They’re the key I think to resolving the economy and getting us through this time. You need small businesses to start networks, so they start using each other. I think it needs to happen in each individual city. They need to rally.” Milner said that small businesses in Burbank are suffering tremendously. This hurts residents in the city who are looking for work also. “The small business is in major decline. It’s been happening for a while. The recession is going to hit (small businesses) really hard.”

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