It’s been a few rocky years for small businesses. Those that survived the COVID-19 pandemic likely did so by taking out loans that were either forgiven (yea) or coming due (uhm). Now, with numerous geopolitical concerns, inflation rising across the board, and high interest rates slowing lending, consumers are spending less, and small businesses continue to struggle.
As a looming recession seems inevitable (if not already here), the U.S. economy will likely remain uncertain throughout 2023 and into 2024.
When times are tough, the ability to adapt quickly is a significant advantage that small businesses have.
“Nimbleness is truly the core feature of any small business,” said Elizabeth Eiss, Founder and CEO of the talent curation and freelance recruiting platform ResultsResourcing. “An agile company can quickly adapt to prevailing circumstances, stay close to their customers, and manage changes in the business environment to survive and thrive.
“One of the best strategies a company can adopt to recession-proof their business is an agile talent strategy.”
What is an agile talent strategy?
Most companies spend between 15 and 30 percent of gross revenue on payroll expenses. When the economy is stable, and cash flow is predictable, it is easy to maintain this payroll percentage. However, when cash flow becomes unpredictable, this percentage can quickly fluctuate to unprofitable levels. This leads to employee pay cuts and layoffs, meaning essential services suffer and valuable employees may be lost forever.
However, small businesses can stabilize their payroll percentage by adopting an agile talent strategy. This powerful, yet simple concept enables companies to quickly and easily scale up and down as needed, which keeps payroll costs steady and predictable.
“An agile talent strategy is a deliberate shift to incorporate talent that is deployed on a flexible basis. Companies often use this approach as a way to complement and augment full-time staff, gain specialized skills, or get short-term support. During times of uncertainty, it provides flexibility.” said Eiss.
“An agile, variable, hybrid cost model can combine full-time, part-time, and contract workers, as well as onsite and remote roles. We say that an agile talent strategy enables small businesses to ‘access’ talent instead of ‘acquiring’ it in the traditional parlance – and also because talent has a say in the matter. People choose to work with an employer, rather than be “acquired.”
Making the shift to an agile talent strategy
The first step when shifting to an agile talent strategy is clearly identifying a company’s core value proposition. What will customers continue to pay for during these unsure times?
Next, focus your small business around that core value. That is accomplished by identifying a company’s core and non-core roles.
- Core roles directly drive customer value. These tasks impact business performance and give a company an edge over the competition. Core roles can change and evolve as a company grows. Full-time employees should generally staff these positions.
- Non-core roles support core work and are just as important in running a successful business. Non-core roles are defined by work that does not directly impact the value a customer receives. For the most part, these tasks may not be needed 40 hours per week, every week. Some possibilities include admin, marketing, social media, human resources, copy writing, billing, and payment management.
With an agile talent strategy, freelance professionals can staff non-core roles on an as-needed basis creating more flexibility for business owners.
“Small businesses with poorly defined core and non-core roles are at a competitive disadvantage because they lack the clarity of their more agile peers to delegate work to flexible professionals,” said Eiss. “By transitioning non-core tasks to contract professionals, small businesses can leverage highly skilled talent without making a full-time hiring commitment.”
Discover how to recession-proof your small business by shifting to an agile talent strategy. Click below to schedule a free, no-obligation 30-minute chat to learn more.
