The Tornado Economy & What Will Drive a Strong Q4

The Tornado Economy & What Will Drive a Strong Q4

TRICOM’s CEO, Julie Ann Bittner, recently caught up with Tom Erb, President of Tallann Resources, to share observations on what’s happening in the staffing industry. Since we’re still under the “new normal” (the phrase that makes everyone cringe now!), a Zoom call was in order.

Julie Ann asked Tom for his insight on what’s going on in the industry now, changes he’s seeing and perspectives staffing owners may not have thought about since the onset of the pandemic.

Tom sees the remainder of 2020 to be positive in most areas, even though we are in “weird,” unprecedented times. There’s a Tornado Economy happening whereby the economy isn’t hitting some areas but is hitting others. Tom commented that many of his staffing clients are actually on pace to have their best year yet. He’s also seeing that there are more orders than there are people to fill them. While some markets are coming back slower than others, Q4 and into 2021 is poised to be strong, provided there are no hiccups going in to flu season.  Even though flu season is around the corner, we should be better prepared than we were back in March.

Julie Ann was in agreement with Tom that things are starting to improve. She noted that TRICOM clients have seen an uptick in business over the last several weeks ranging from increases of 3% - 5%. She also expects Q4 to be positive, unless of course there’s an unexpected resurgence from the virus.

In the last 2 months, the GDP in the US flattened partially as a result of the $600 unemployment benefit. Unemployment is dropping and Tom is seeing staffing in a V-shaped trajectory. Staffing is always the first into a downturn, and the first out of a downturn.

With many companies not wanting to go up against unemployment benefits, or having employees with children unable to come back due to home schooling, these situations create great selling points for staffing companies. It’s an opportunity for staffing companies to work with clients on flexibility such as job sharing. They can help their clients with scheduling and figure out how to fill shifts as opposed to focusing on the number of positions that need to be filled.

Julie Ann and Tom both agree there are silver linings from the shutdown. One of those is staffing companies looking at technology as a new tool, where in the past, many had been slow to adopt technology. They had to adapt to remote onboarding and work from home scenarios when many thought neither were possible. Now they’re finding that these can work with the right technology solutions in place. Julie Ann stresses the importance of technology in how TRICOM helps clients’ cash flow. By implementing a new Click2Pay service, ACH or electronic payments are received much more quickly than those being sent through the US Postal Service. She predicts that mail service will only get slower as the election nears and encourages people to educate their clients on ACH payments.

With business being slower, one silver lining is it’s easier to implement changes as opposed to when business resurges. It gives employees an opportunity to adapt to changes while schedules are somewhat easier to manage.

Tom urges staffing owners to take a look at the niches they’re in and evaluate how that niche is really faring. Event staffing, hospitality, travel and retail are down significantly and some won’t come back to previous levels for years. Hospitality is seeing some bounce-back as well as domestic travel. For those retailers shifting to online shopping, they are seeing some improvements as well. After reviewing, if owners realize they’re in a niche that isn’t coming back for 4-6 months or longer, they need to look at diversification and what they could do that’s similar to what they’ve been doing.

Julie Ann echoes that coaching, and has seen TRICOM clients pivot their business to accommodate new opportunities. Contact tracers, temperature checkers and remote call centers are all opportunities created out of the pandemic. There’s always an opportunity; you just have to take a step back and look at where they are.

Julie Ann was curious about Tom’s thoughts on sales approaches during these unusual times. Having seen hesitation from her own sales team on how to contact prospects at the onset of the pandemic, she felt this was most likely a topic on everyone’s mind. Tom agreed there was definitely a hypersensitivity to sales, especially at the beginning of the pandemic. But, that doesn’t mean you stop calling on prospects.  Initially, everyone was delivering a message of “here to help and being a resource” and being hypercritical of messaging based on current circumstances. Regardless of what’s going on in the economy, Tom notes it’s always a good practice to be a resource, to be consultative and provide answers. As staffing companies experience economic downturns, it presents a great opportunity for them to build relationships with their clients who are laying off employees or are concerned about their or their families’ and friends’ jobs. By focusing on being a resource, sharing best practices and offering specific services and expertise, they can now provide more value to their clients.

Both Tom and Julie Ann are 20+ year veterans in the staffing industry. They’ve seen several economic downturns in their careers, as have other long-term staffing professionals. Their experience gives them a perspective that newer professionals don’t have. They both stress that it’s ok to not know what’s next or to have all the answers, but we will get through it together. With all the fear and hopelessness due to so much going on between COVID, a divisive election, social unrest, wildfires on top of any personal challenges people are juggling, they’re seeing less experienced workers struggling the most. By being open with discussions and sharing concerns, this can help to reassure employees that this time and its challenges will all pass, we’ll figure it out and get through it together.

Tom shared some advice on handling the information overload we are exposed to, and he cautioned not to get too bogged down in the information in the media and social media. Much of the information is sensationalized because, unfortunately, bad news sells. Look past it to curate your own information from sources that don’t sensationalize the news (e.g. FlipBoard) and filter it down.

In these uncharted times that we are in, look for the opportunities, be a resource for your clients to help them solve their challenges and remember, we don’t have all the answers, but together, we will figure it out.

To view the podcast, visit our homepage at TRICOM.com. You’ll find the link toward the bottom of the page under “Podcasts."

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