The COVID-19 pandemic has drastically impacted the global economy, leaving many companies struggling with financial instability. As a result, businesses have had to make tough decisions to reduce costs, including laying off employees. In Q1 2021, U.S.-based companies have cut more than 270,000 jobs, a nearly 400% increase year-over-year. In this article, we will explore the impact of the increase in layoffs and how Workforce-as-a-Service (WaaS) platforms can help protect hourly employees from job losses.
The increase in layoffs
The unprecedented increase in layoffs is caused in part by the ongoing effects of the COVID-19 pandemic. As businesses struggle to navigate the financial instability, they are forced to reduce their workforce to cut costs. In Q1 2021, U.S.-based companies have cut more than 270,000 jobs, a nearly 400% increase year-over-year. This spike in job cuts is a clear indication of the continuing economic challenges many businesses are facing.
Lack of outplacement support
When employees are impacted by layoffs, it’s essential to offer support to help them transition to their next position. Unfortunately, 60% of hourly employees are not offered any kind of outplacement support when affected by layoffs. This lack of support can leave employees feeling unsupported, making it challenging for them to get back on their feet.
The issue with hiring full-time staff
Hiring full-time staff can leave businesses in a precarious position when demand slows. With the high costs associated with recruitment, hiring, and onboarding, businesses are forced to make challenging decisions when faced with financial instability. This approach tends to cost employers far more than they anticipated and can lead to layoffs when demand slows down.
The importance of reducing company expenses
With inflation soaring, employees are looking for higher wages to make ends meet, making it more crucial than ever for employers to minimize company expenses. Retaining talent and minimizing turnover rates are essential to keep businesses financially stable, a situation which can be exacerbated by heightened turnover rates.
Costs associated with vacancies
A recent report shows that a vacancy for a single worker earning $15/hour costs businesses at least $5,832 annually in missed revenue and underutilized resources alone. This cost can increase exponentially when businesses experience high turnover rates, making it essential to find alternative approaches to managing workforce demands.
Variable Demands and Seasonal Work
Companies in verticals such as retail, supply chain, hospitality, and logistics are no strangers to the ebbs and flows that come with peak seasons. As such, they typically increase their workforce in preparation for heightened demand. However, this approach can often lead to layoffs when demand subsides. It’s crucial to have a flexible approach to managing workforce demands to avoid layoffs.
Introduction to Workforce-as-a-Service Platforms
Workforce-as-a-Service (WaaS) platforms offer companies a solution to managing the variable demands of their business with a flexible hourly workforce. These platforms do not require the upfront costs of traditional recruitment, hiring, and onboarding methods. Additionally, WaaS platforms minimize the ongoing costs that come with retaining talent.
The Role of WaaS Platforms in Reducing Layoffs
Deploying a WaaS (Workspace-as-a-Service) platform can help organizations manage their workforce demands seamlessly and efficiently, thereby reducing employee headcount without having to make tough decisions to lay off staff. This approach helps to retain talent and minimize the financial impact on businesses. WaaS platforms help businesses avoid making the tough decision to lay off staff in times of financial instability, leaving their employees out of work during a time when steady paychecks are crucial.
The increase in layoffs year-over-year is a clear indication of the continuing economic challenges many businesses are facing. With the global economy battling financial instability, it’s critical to find alternative approaches to managing workforce demands. The costs associated with recruitment, hiring, and onboarding can no longer be accepted as “just the cost of doing business.” Workforce-as-a-Service (WaaS) platforms offer a solution for businesses looking to manage their workforce needs flexibly while minimizing company expenses. With WaaS platforms, businesses can protect their hourly employees from falling into The Great Layoff.