Job Market Challenge

Although IT rarely generates revenue directly from customers, it often accounts for a large portion of corporate expenditures and is often the first place companies cut their budgets. Indications are that if you see an uptick in IT jobs, there may be reason to believe that long-term growth is on the horizon. Most IT driven organizations use outsourced talent for short-term needs, reducing the necessity to increase budget projections. Some IT executives believe that IT spending tracks the national GDP and any downturn in IT budgets has more of an impact on small businesses rather than on larger companies that are well capitalized.

In a macroeconomics model, the classical aggregate demand/aggregate model (AD/AS) is based on the assumption that wages are flexible in times of recession. Regardless of the level of overall demand in the economy, output will always return to the full-employment level, and unemployment will always return to its natural level.

The rationale for hiring temporary workers can be described as the supply of qualified workers and the demands of businesses to keep budgets in check. For example, in response to falling wages in the labor market, the Classical AD/AS Model asserts that government spending is not needed to get the economy out of a recession because wages will self-correct due to new hires and improved production levels. If the cost to employ a contract worker increases a manager's budget by 10%, it may decrease the quantity demanded (number of workers needed) by 2% in the short run, and 4% in the long-run. If the practice of hiring temporary workers goes and stays up by 10%, the result is a dynamic process of adjustment that in simplified terms, can affect production levels. If productivity decreases in the short-term, it may also continue to increase over time if the right temporary worker is hired. Productivity does not have to be affected if the right processes are followed. A thorough understanding by the recruiter and manager about the ideal candidate choice is an important driver for performance. Managers are in the trenches and know how the team works best, they understand the corporate culture, and know what skills are the most valued.

If the practice of hiring temporary workers begins to indicate a decrease in productivity, it is probably because the candidate was not a good fit for a position in the first place. Better screening processes for temporary employees will trigger more efficient hiring practices, and result in a different type of employee (better skills, happier, ability to work flexible hours, etc.).

How does a manager find the right employee? The key to improving candidate choice is always going to be based on how well the lines of communication work between the manager and the recruiter. Using an experienced recruiter is a vote of confidence in the future that looks to improving productivity.

CAP Global, Inc. defines itself as the recruiter of choice. The key for recruiting great people is to identify the characteristics and attitudes of employees who thrive in the client’s culture. We create a selection process for prospects that demonstrate those values. A CAP Global benchmark ensures that staffing requirements are clearly communicated to prospective new hires and managers. CAP Global identifies the brightest, most ideal candidates so managers can focus on long-term success, greater profits, and satisfied customers.

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