Staffing is a leading indicator of doom and turnaround.  As I’ve written here before, our people were the first to be laid off in late 2007 and early 2008.  After all, if your orders are drying up, the quickest way to cut costs is to let the temps go and ask your base workforce to be more productive.  This just makes good sense.

Now that inventories are depleted and new orders for products are on the upswing, you need the people to get the product out the door.  A recent Business Week column indicates that temporary staffing has added 44,000 jobs since July.  This is similar to past recessions and is a clear indicator that manufacturing is turning around.

Staffing makes great sense for the manufacturing industry on a number of levels.  Answering customer demand and allowing workforces to ebb and flow with business needs are just two of the more important ones.  If your business can benefit from a more flexible workforce or if you need the expertise that a full service staffing company can offer, don’t hesitate to contact us.

Our conversation moved naturally towards staffing levels.  I heard from him and many others like him, a similar theme: when positions had to be eliminated and headcount reduced, the weakest performers were the first to go and are not likely to be rehired.  Does this seem alarming?  I’m sure it does to those underperformers who are still searching for a position and/or hoping their old employer will hire them back.  I believe most employers have found that they were overstaffed and used the recession and lack of business as an excellent opportunity to not just “trim the fat” but to do so in a precise manner that kept the best talent.

All of this makes great sense for companies.  The best talent always produces the best results for its customers.  Unless a company must perform according to bargaining unit rules, keeping the best and getting rid of the rest is a great first step towards higher customer satisfaction and more profits.  These two things help ensure the long-term viability of the company and everyone is a winner.

“Everyone”, you say?  What about those that have been let go and through my insinuations here, were underperforming?  These people win as well.  Long term, no matter how great the job was, if you are underperforming you will not be satisfied in your position.  This lack of satisfaction will almost certainly translate into some other form of dissatisfaction in other areas in your life.  The sooner someone is “set free” from a bad working situation the sooner they are able to find the right situation.  Standing in the unemployment line gives the person a pretty difficult perspective with which to appreciate this situation.  I have spoken with many who have successfully made it through a career transition and have echoed these sentiments.

I can’t help but think about the difficulties we’ve been through over the past 12 – 18 months as a period of pruning for business.  The branches, and therefore the whole plant, will become stronger in the long run.  However, we didn’t just bundle up the pruned limbs and through them in the fire, they have been or will be replanted and nurtured in a different manner for the benefit of the entire garden as well.

Many people I talk to say “When I see this sign, I’ll know the economy is back.”  What many are not taking into account is that the old will not be back.  We are in for changes that no one can anticipate.  Tomorrow will not be like yesterday.  Today is the day for evaluation of the future.  So many people and organizations have been so scarred by the events of this current recession that they will change their outlook drastically to protect themselves from the pain of their current situation.  I suspect we will see greater savings rates and a broadening of education among individuals.  Organizations will be more likely to operate with less perks and seek talent that is broader based in nature. 

It’s a new time for the business world.  Look for your opportunities but don’t get hung up in the past.  We are moving full steam ahead into unchartered waters.  Find your seat on the “opportunity bus” or better yet, create your own.

So here we sit on the “front lines” of this war with a down economy. The view from here is not necessarily a pretty one. Basically we are holding our own. Not giving any ground, but not taking any either. The companies that are busy are busy producing items that aren’t affected by this downturn anyway – food, household cleaning items, etc. So far it’s pretty much still a draw.

We’ll keep you posted though. It’s tough in the trenches but this is where we feel at home. This is where the real work gets done.

Clearly we are living in unprecedented times. Most say, and probably with good reason, that this recession and these economic times are second only to the Great Depression. One day it will come to an end though and then what? How will we handle the need for new talent when the orders come back? How will we access enough qualified candidates when the inventories are too low and the customer demand ratchets up?

I found the attached article very insightful as to what some recovery cycles may look like. What will it mean to hiring? The “V” shaped recovery seems appealing. A steep drop followed by a steep recovery. It sounds a lot like a hiring frenzy could ensue. Who benefits? Well the recession may end more quickly but what kind of strain does that put on hiring managers? When these new hires end up in our operations and we don’t have enough time for checking backgrounds and proper training, massive turnover may be the result.

The “L” shaped recovery seems more managable. A longer road to prosperity for sure, but a much better opportunity to find and train the right candidates ensuring better products and services delivered to customers.  However, as the article states, just when we think things are looking up we see another small downturn and the economy trudges along.

Either way, hiring managers must be prepared and have a gameplan for meeting the needs of their organization with solid candidates to move the organization in the right direction.   With the abundance of talent in the marketplace today, this seems like an easy opportunity.  However, we must prepare for any number of scenarios and keep our options open for help when it presents itself.

Three Scenarios for the Economy’s Path

By DAVID WESSEL

There is no doubt where the economy is now. “By any measure, this downturn represents by far the deepest global recession since the Great Depression,” the International Monetary Fund declared Wednesday. But there’s more than the usual uncertainty about where it is going. The key is the U.S. Even though its slice of the world economy is smaller than it once was, it’s still huge. The U.S. led the world into the abyss, and it will lead the world economy out of it. But how fast and when?

The alphabet can help to imagine the possibilities and the path of the economy. There’s the letter V: the kind of quick rebound that usually follows a deep recession. Or U: a longer recession and slow recovery. There is L: years of painfully slow growth. And W: a temporary upturn as the economy feels the jolt of fiscal stimulus that quickly wears off. Finally, there’s the big D, not the shape but another Great Depression.

With history a guide, consider three starkly different scenarios.

The late Victor Zarnowitz, a student of the business cycle, had a rule: “Deep recessions are almost always followed by steep recoveries.” The mild recession of the early 1990s and early 2000s were followed by mild recoveries. But the U.S. economy grew faster than a 6% pace in the four quarters after the deep 1973-75 recession and faster than a 7.75% pace after the even deeper 1980-82 downturn.

“In deep recessions,” says Michael Mussa of the Peterson Institute for International Economics, “there is usually a growing sense of gloom as the recession deepens.” Then the forces that triggered recession — say, plunging home prices — abate. The adrenaline of tax cuts and government spending kicks in. With inventories so lean, the slightest uptick in demand prompts a sharp increase in production, and the natural dynamism of capitalism reasserts itself.

“Experience suggests all of this should work, and I believe it will,” Mr. Mussa predicts. Governments have administered huge doses of fiscal and monetary stimulus. Home-building and car-buying are so low they can’t fall much further. Many consumers shy away from buying because they’re frightened, not broke, and that state of mind can change quickly and liberate pent-up demand. But the Federal Reserve caused the deep recessions of the 1970s and 1980s when it put its foot on the brake to stop inflation; it ended them when it let up. This time, Fed has its foot to the floor and the economy is still slowing. And so much stock-market and housing wealth has evaporated that a quick turn in consumer spirits seems unlikely. Plus, the repair of the banks remains far from complete, restraining lending.

The odds of the V: 15%.

If one asked a roomful of economists two years ago to put odds on a repeat of the Great Depression, nearly all would have said zero. In early March, The Wall Street Journal posed the question to about 50 forecasters — defining depression as a decline in output per person of more than 10%, four times worse than the decline the IMF anticipates. On average, they put odds at one in seven; several put them above one in four.

“This is a Depression-sized event,” says economic historian Barry Eichengreen of the University of California at Berkeley, citing the global decline in industrial production and world trade. The big difference: In 1929, governments dithered, or worse. In 2009, they’ve rushed to the rescue. To go from today’s deep recession to a depression something would have to go wrong. It could be a financial catastrophe on the scale of last fall’s bankruptcy by Lehman Brothers or another panic-inducing event. Or a crash in the dollar, one that forces interest rates up at just the wrong moment.

Or it could be political gridlock that stops governments in the U.S. or Europe from spending enough to fix the banks before a big one fails, or keeps them for doing more on the fiscal or monetary fronts as the economy deteriorates. Or it could be virulent deflation that pulls down prices and incomes, making debts, which don’t fall when prices do, a heavier burden. The textbook remedy is easy money and big government deficits. But so much of that has been tried it’s easy to question its efficacy or to imagine resistance around the world to doing.

The odds of the big D: 20%.

For a decade after its stock market and real-estate bubble burst in 1990, Japan bumped along at an annual growth of just 0.5%. It was dubbed the Lost Decade, and it could happen here. The recession ends but the economy plods along, growing too slowly to bring down unemployment for years. As the IMF observed this week, recoveries following recession caused by financial crises are “typically slower.” Those following recessions that occur simultaneously across the globe “have typically been weak.” Back in the 1990s, as U.S. banks struggled, the Fed talked a lot about “financial headwinds.” Those were zephyrs compared to the gale-force winds that the economy confronts today.

If financial markets stabilize but don’t improve steadily, or if housing prices continue to drift down, or if confidence remains shaky, the U.S. economy could languish for a time. American consumers, once known for spending in the face of prosperity or adversity, could finally decide to prepare for retirement by saving more, having just learned that neither 401(k) retirement accounts nor home values rise inexorably. And the U.S. can’t count on increasing exports, the solution when emerging-market economies run into financial trouble and the reason Japan didn’t do even worse in the 1990s.

The rest of the world is in no shape to buy. An unfolding depression could scare Congress to act boldly, but the L is less ominous — and perhaps more likely as a result. There would be months when the economy appeared to be strengthening so the temptation to wait-and-see would be strong.

Put the odds of the L at 55%. That adds to 90%. So put 10% odds on the U, less pleasant than the euphoric V but far less painful than a Lost Decade. That’s the rough consensus of economic forecasters; it means U.S. unemployment grows for another year and a half.

Bottom line: The odds favor a long slog.

Copyright 2008 Dow Jones & Company, Inc. All Rights Reserved

Marketing our services has been a real adventure.  Most companies when confronted on the phone, insist there is no good reason whatsoever to have a conversation about hiring practices now.  After all, they’re laying their own employees off.  Let’s try and focus on the future though.  This current economy will change and when it does, what will you do for employees?  We want to be front and center, top of mind, and the first call you make to staff up.  This, in my opinion, is staffing at it’s best.  Know thy customer.  Build a database of candidates for the eventuality that there will be employee needs.  Be prepared!