Recession 2022?
“Recession” is not a word business owner’s like to hear. When Americans lose confidence in the economy, memories of past struggles surface: the 2008 recession, not so long ago, took five years of recovery. The US Staffing industry business owners saw a decline of 28% in revenue in 2009. Since then, revenue has steadily grown. Warning signs currently contributing to the concern of an impending recession include seeing interest rates increase, stocks declining, and inflation.
How does a recession affect businesses? Customers don’t want to spend money, so most companies see a reduction in their profitability. Customers typically won’t invest in innovation during a recession, they will cut costs as much as possible, making it difficult for Sales professionals to continue generating leads. Quality is another way products suffer, as businesses try to reduce their bottom line. Lenders also make requirements stricter, meaning a line of credit to fund operations can become less accessible.
How to prepare?
Can you have a recession proof business? Preparing – whether a recession comes or not – can make a lasting impact on businesses. By evaluating possible scenarios and planning what a response to that scenario would be, a business can adapt to those outcomes quickly. Having a contingency fund is also a good way for a business to prepare for potential loss. By making projections in advance, a business can determine the current financial wellness and evaluate what longevity in the event of a recession.
When considering current customers, businesses can evaluate more specifically how a recession may affect them. A recession will affect different industries in different ways. If a business has all of their customer base in one industry, considering new opportunities to diversify a customer base now might prepare them for possible industry shifts. Looking at current customers in advance can also lead a business to audit current receivables. Making sure contracts and terms are in place and specific, managing accounts receivable and invoicing, and running credit checks can help businesses ensure their longevity.
Workers’ Compensation
As a recession takes place, there is a natural decline in employed workers. As businesses manage their operations, safety often becomes less of a priority. Often, businesses will not invest in newer and safer equipment during a recession. Reduced training opportunities, longer shifts for employees, and less safe conditions can increase Workers’ Compensation claim volume. The impact on premiums as a result can be catastrophic to a small business.
Unemployment
Unemployment rises across board during a recession. Unemployed workers may have difficulty finding new opportunities, which leads to them to file for unemployment and remain there, receiving unemployment benefits longer than they would outside of a period of recession. Considering the 2008 decline in employment, “…Among workers displaced during the Great Recession, only 35% to 40% were employed full-time by January 2010”. This impact on a small business’ unemployment insurance rate can conflict with their ability to maintain operational costs.
ESSG
Employer Solutions Staffing Group, LLC is a solution-based company. We have focused on the needs of our clients as a whole, with an intention to cut costs and increase profitability. In many ways, ESSG can help businesses in the event of a recession.
ESSG’s worker’s compensation team manages risk across our workforce. This means that we take a proactive approach to ensuring the safety and well-being of employees. Our resources and solutions mitigate and leverage risk.
ESSG is in every state, and our unemployment policies maintain low exposure as a result of our model. It is our goal to keep employees working. We manage unemployment insurance claims handling, ensure that legal compliance is followed, and reduce this liability.
“We have been with ESSG for 7 years. One area they really deliver in, is helping us with regulations like ACA. We have relied on their expertise and experience, which allows us to focus on growth. They help so much with claims, reducing accidents in the workplace and fighting back on false claims. No matter how unique our challenges are, ESSG always seem to find a solution that works for all. We could not be happier to have them as a partner.” – Staffing Company Owner – Multiple States