The US economy continues to roar – unemployment, currently at 3.9%, is at a 15-year low. Strong performance from the retail sector indicates a surge in an industry that’s had a tough decade – with some commenting that retail is entering a “renaissance” era. This month the world’s largest retailer, Wal-Mart, reported its best quarterly sales gain in a decade, and Target reported its largest gains in 13 years. Production increases in the manufacturing sector rose .8% in June, and .3% in July. As consumers continue to be optimistic (a 17-year high), logistics and distribution companies will face constraints that have not been present in the market for more than a decade.
These economic metrics are good news for the country – but it only means one thing to those responsible for operational performance behind the good news. The impacts of seasonality will reach crisis mode – companies competing for labor will spike wage rates or offer overtime as an up-front benefit.
The worst practitioners of these tactics will even market seasonal positions as having potential for full-time hire, when they already know a down cycle naturally occurs in Q1. Many companies that enjoy low turnover and high labor retention throughout the year will see workers jump ship for marginal wage increases – effectively starting a bidding war.
There are two paths for operations leaders to take:
The status quo: enter the bidding war and hope for the best. This scenario requires businesses to forfeit the maximum benefit and good fortune of a booming economy. Labor costs go up, productivity remains stagnate or declines – it requires giving up profit by over-committing to methods such as full-time seasonal hiring, or utilizing expensive augmentation via temp staffing
Embrace change: meet the demands of a new, booming economy with a tech advantage and a labor marketplace that drives individual performance, tailors labor to demand, and meets the needs of customers
At Veryable, we believe operations leaders should be empowered to face challenges presented in this economy. By utilizing Veryable’s on-demand marketplace, your business can post Ops when your full-time workforce reaches capacity. For seasonal hiring, your business can end the annual, predictable cycle of trying to flex capacity through traditional full-time hiring or temp staffing, only to see all the training investment walk out the door in January. The best part of utilizing a marketplace is that you know what you’re getting – businesses on the platform rate the Operators based on performance. When the need arises, you can select your “favorite” Operators to come back to work.
Seize the opportunity to thrive in this economic upturn, and Veryable can help you make the most of it! Get a head start on building your labor pool at company.veryableops.com.