FTI and staffing association call for more use of flexible workers

07 June 2020 Consultancy.com.au 4 min. read

A new report by FTI Consulting and an industry association calls on Australian businesses to increase their use of flexible workers – to their own benefit – as they return to a ‘back to normal’ scenario.

Commissioned by the Recruitment, Consulting and Staffing Association of Australia and New Zealand (RCSA), FTI Consulting was tasked with assessing the economic value of a flexible workforce amid the nation’s economic recovery path.

The researchers found that in the light of low business confidence and continued economic uncertainty, corporates and SME businesses are understandably hesitant of taking on workers in full employment. But as demand grows for products and services gradually grows again, and organisations are faced with talent needs, they will – in particular in the early stages of recovery – source flexible labour solutions, including agency workers. 

According to FTI Consulting’s estimates, Australia’s agency workforce comprises more than 350,000 Australians who are employed by nearly 9,000 agency staffing firms. Combined, the agency workforce earns more than $21 billion in wages, with the largest chunk of fees earned in the financial services, engineering, construction and healthcare sectors. 

Predicted impact of COVID-19 economic downturn on key agency worker sectors

The report suggests that using agency workers is a win-win. Companies that source flexible talent are able to respond swiftly to changes in a cost-effective manner, in the process leapfrogging them ahead of their more conservative rivals, with international evidence showing that businesses that use the agency workforce typically accelerate faster out of a downturn. 

“Experience in both Australia and internationally [among others Germany, the UK and the US] highlights the significant contribution that the agency workforce can make in supporting businesses and the labour market to manage through a recession and bounce back,” the report says.

Staffing firms play a key role in the demand-supply process. “They source, match, assign and support the best workers for the job in an efficient manner. They have detailed knowledge of labour requirements in the industries they support and can maintain a pool of pre-screened professionals, tradespeople, skilled and semi-skilled workers,” states the report.

The report predicts construction to offer the strongest, and most rapid growth prospects for agency workers, particularly in the infrastructure area due to the likelihood of a government incentivised infrastructure-led recovery. The scientific & technical and financial services sectors also offer strong growth prospects; however, the high rate of permanent employment in the sector suggest that these sectors won’t recover as quickly as others.

Meanwhile, the government is likely to see considerable churn, as ‘staffed up’ parts of the public service will downsize, while healthcare is likely to see rapid uptick based on the backlog of elective surgeries 

Predicted impact of COVID-19 economic recovery on key agency workforce sectors

A $1 billion push

The second win is for Australia as a whole, on the back of the economic value of agency workers brought back into ‘employment’ and the resulting impulse to the government’s coffers. 

“Using agency workers in the early stages of economic recovery is likely to stimulate additional production of almost $1 billion over the course of the economic recovery. This has the potential to improve the Australian Government’s budget position by almost $200 million over the recovery through reduced Jobseeker payments and increase tax revenue.” 

Further down the line, staffing firms are found to be also well placed to get people back to work. “They provide a transition pathway from unemployment to agency work and on to permanent employment in a recovering economy, and as well as a transition to employment for young people seeking to develop their experience in the jobs market or transition from studies,” according to the report.

About the report

FTI Consulting is a global consulting firm specialised in management consulting and financial advisory services. While the firm operates independently, it should be noted that industry association RCSA obviously has interests in ‘promoting’ the use of a flexible workforce, which ultimately would be to the benefit its member base.