The Economy as it relates to the Staffing Business

I am surprised that so many people are screaming recession due to two primary factors. 1. Gas Prices, cost of oil and 2. The credit crunch, home foreclosures and bad loans.

I was a victim of the bad loan crisis early on. I didn't realize how bad it was going to be, until I saw actual 'Foreclosure Tours' taking place by Realtors across the country.

The banks made high risk loans. Period. Allowing people to borrow betting on the fact that their adjustable rate mortgages would not Adjust So Much that they couldn't afford their payments.

So, what did we expect? You make risky loans, you risk your money. You risk your money, your risk your stability. You risk your stability, and everything just goes to heck in a hand basket.

The question is...How will this affect the IT staffing, IT consulting and overall IT business as a whole.

It won't.

Here is why.

When the economy is good, and booming, companies are engaging new customer, new initiatives, new programs, new products....R&D is flourishing with lots of cash to build out the best new generation this and that....IT staffing is a key element of this growth, providing much needed talent to grow the business, to build the applications, to help companies do what they want to do next. It's a great time to be in the industry when the economy is good,

When the economy is bad, and recession is looming, companies are reluctant to hire new employees. Layoff's may take place, hiring freezes are put into effect, and everyone gets very nervous about what is about to happen next. It seems as if the staffing industry would suffer as well.

That's not accurate at all.

Bad economies generally mean good times for staffing firms. Well, at least staffing firms who have good sales practices.

Companies still need to support their IT projects and programs. It projects lend to ROI, cost savings, cost containment or even revenue for companies who sell software products. These initiatives must continue, and although there is no money for additional hiring of perm employees, flexible staffing solutions are the answer for talented resources who keep the company wheel turning. Utilizing contractors, contract labor, contingent labor...whatever you want to call it....is the answer. Flexibility in staffing, short term, long term, etc...makes a bad economy good for the staffing world.

More later!