How Staffing Companies Can Combat High Interest Rates

Is your staffing company worried about the implications of rising interest rates? 

Inflation impacts our everyday lives in various ways, ranging from the cost of essential commodities like eggs to the challenges faced by companies in maintaining a budget to sustain their workforce. The unanimous decision of the Federal Reserve's Board of Governors to raise the interest rate paid on reserve balances to 5.15 percent marks the 10th interest rate increase in just over a year. This development has left companies pondering the implications for their staffing firms. Wonder no more! We're here to provide answers and valuable insights to help figure out what interest hikes will mean for your staffing company. 

Interest Rate Spike Responses

U.S.-based employers announced 89,703 layoffs in March and 66,995 cuts last month in April. As a hiring freeze creeps throughout the workforce, we can anticipate major layoffs. Just because your clients are cutting back on their staff doesn’t mean they have less work or projects to complete. Now is not the time to only hold strong to your direct hire placements, it is the time to open yourself up to throwing contract hires into the mix.

Layoffs since the start of 2023 in the technology industry (Crunchbase, 2023.)

Companies Still Need to Produce

The truth is, contract work isn’t all that different from what you’re already doing. It doesn’t take an entirely new marketing plan or building new infrastructure. You already have the contract in place with your client, all you need to get are the requisitions. No need to reach out to new clients.

Where to Begin with Contract Placements 

Ask your close connections and find out what it actually means to work with contractors. Learn more about the jobs and post on your website that you’re now including contract placements into the mix. It’s likely that you will be shocked at the response. 

Inflation and the rising interest rate aren’t just affecting your clients; more than likely, it’s affecting you too. Do you find yourself asking the question, "I want to add contract placements but don't know where to start?" Consider working with a stabling funding solution.

Two Questions to Ask Your Clients 

1. How is your company adjusting to rising interest rates?

2.  Do you know of a department that uses contractors?

Final Thoughts 

1. Open your staffing company up to contract placements.

2. You already have the contract in place, now all you need is job requisitions.

3. Explore stable funding solutions to hold fast during inflationary and unsteady times. 

Still not sold? Watch this Success Story of a direct hire firm that added contract into their staffing mix.