How to Conduct a Staffing Needs Assessment in Uncertain Times

While your competitors are taking a “wait and see” approach to staffing in 2025, you could be seizing historic opportunities for growth. Record-high demand for electronics and IT, automotive, cybersecurity, and other products and services means that technical companies who invest now could be miles ahead when the dust clears and markets stabilize.

However, aggressive investment needs to be tempered with strategic caution. In some cases, a more flexible approach to filling your staffing needs, like fractional employees or contract-to-hire, can be the best way to have the best of both worlds.

Why uncertain times make it difficult to assess staffing needs

Despite ample opportunity for growth, uncertain times make it difficult to assess your current staffing needs. More than that, it’s difficult to assess and quantify risk when the variables that drive that risk are constantly in flux.

Right now, economic uncertainty and market volatility have created an environment where workforce planning is difficult, to say the least:

• Sudden changes in consumer behavior, market trends, and regulatory environments is leading to fluctuating demand for products and services
• Pressure to tighten budgets make it harder to justify new hires or invest in recruitment and retention programs
• Rapid advancements in AI also make it harder to justify new hires, especially in rote, monotonous work
• Need for operational flexibility as companies need to be able to meet short-term staffing needs without overcommitting resources

This uncertain environment makes it challenging for organizations to determine the optimal size and composition of their workforce. In other words, you want to steer the best course forward, but you’re flying blind.

How to assess your current workforce in the face of market uncertainty

Market volatility requires constant attention to your workforce needs. New opportunities and challenges will inevitably arise, meaning what worked last year probably won’t work this year (or next).

So how do you assess whether your staffing needs—present and future—align with the current state of the market? Here are a few practices we’ve found to be helpful with our clients.

1. Audit role-to-strategy for every new (or current) hire

This year has already seen the highest number of job cuts since the Covid-19 peak. Although some of these reductions may be attributed to a “haircut” caused by economic uncertainty, a major factor has been the “rightsizing” of workforces following over hiring in the second half of 2024.

Increasingly hiring managers are charged with maintaining headcount discipline: growing or holding revenue without hiring new employees. There’s also a focus on “value density,” or ensuring that each new hire brings maximum value to the organization. For example, cross-trained and cross-functional employees have a higher value density than those who are specialized in only one skill.

For each new or existing role, it’s critical for leaders to audit each position to ensure it aligns with the needs of the organization. Otherwise, that role can quickly change from an asset to a liability.

2. Conduct an internal skill gap analysis

When you hired your current team, those hiring decisions were predicated on a series of assumptions. And even if those assumptions were valid at the time, there’s no reason to assume those assumptions are still valid today.

In technology and engineering, the “cutting edge” of yesterday is the “obsolete” of today. For example, if you look at the top in-demand skills of the next decade, most of them didn’t even exist (at least in any widespread way), just a few years ago:

• Artificial intelligence (AI) and machine learning (ML): over 80% of IT professionals believe they can and should use AI, but only about 12% actually have the necessary skills
• Cloud-based solutions require more cloud engineers and architects, which are among the hardest to find positions
• Cybersecurity has always been a critical concern, but as hackers and bad actors become more frequent and sophisticated in their attacks, the skill set needed to maintain compliance and security continues to expand
• Soft skills and leadership capabilities, which are critical for driving innovation and managing change, which are sorely lacking among many new IT and engineering recruits

Keep in mind that closing a given skill gap doesn’t require a full-time, permanent hire (we’ll talk more about that below). You could upskill or retrain current employees, or engage in contingent or contract hiring to target gaps without taking on excess overhead. But before you figure out how to close a skill gap, you first need to know which gaps exist.

3. Invest in predictive workforce planning & scenario planning

The days of a relatively stable market and economy are long gone. Internal historical data is insufficient to accurately plan for future workforce needs. Which is one of the reasons why predictive analytics is critical for workforce planning.

For your predictive analytics models to accurately anticipate workforce needs based on changing market conditions, you need both internal and external data:

• Internal data includes insights into employee performance, engagement, turnover rates, skills, and more
• External data includes macroeconomic indicators, industry trends, labor market statistics, and competitor insights

In addition to predictive analytics, it’s helpful to invest in robust scenario planning. This enables you to broaden your perspective and develop multiple scenarios—best-case, worst-case, and most likely outcomes—to break through assumptions and be prepared for whatever the market throws your way.

4. Consider flexible approaches to staffing

The traditional approach of bringing on external, full-time hires to address every skill gap, while helpful in some situations, does carry some risks in uncertain markets. Lengthy hiring processes, risk of bad hires, and financial burden of bringing on a new employee make these types of placements far from agile.

As a result, it’s important to determine whether your skill gaps or strategic needs demand a full-time hire, or can benefit from a flexible staffing solution:

• Non-traditional hiring arrangements, like contingent, contract, and contract-to-hire
• Skill development and upskilling your current team
• Building cross-functional teams within the organization to leverage synergies and increase value
• Emphasis on retaining existing high-demand talent instead of bringing in new hires

How to fill strategic needs with flexible staffing solutions

Flexible staffing solutions can offer a major advantage for companies looking to navigate complex labor markets with precision. At PEAK, when we think about flexible staffing solutions, we ask the three following questions.

Who needs to be hired?

Not every person you staff needs to be a full-time hire. Often the assumption is that the best way to close a skill gap is to hire someone in that area. But the only reason to extend a full-time offer is if you have stable, ongoing, predictable needs for that particular service.

If you aren’t confident that the demand for a given role or skill set will persist beyond the next five years, you should consider a flexible or skill-based solution.

Does a flexible workforce solution make sense here?

If you can’t guarantee the need for a particular employee, it may make sense to consider a more flexible workforce solution: project-based or contract work, part-time or fractional employees, job sharing, seasonal workers, virtual assistants, and more.

Flexible workforces offer a number of benefits, especially in uncertain times:

• Reduced labor costs
• Lower overhead (e.g. PTO, retirement, insurance, and other benefits)
• Minimal overtime and overstaffing
• Reduced administrative costs
• Access to specialized skills without a long-term commitment
• Lower recruitment and turnover costs

Can we mitigate the risk of a full-time hire with contract-to-hire?

If you do decide that a full-time hire is the best way to fill a skill gap, there’s still a lot of pressure and risk associated with that decision. A bad hire can directly cost tens of thousands of dollars, not to mention the indirect costs of productivity loss, replacement, and opportunity costs.

One of the best ways to mitigate those risks is with a contract-to-hire position. These flexible staffing solutions enable you to:

• Evaluate a candidate’s skills, work ethic, and cultural fit before making a permanent offer
• Save on benefits, onboarding, and other expenses during the trial period
• Place contract employees faster through a more streamlined sourcing and screening process
• Reduce turnover rates by only placing contractors that are a good fit

If you’re interested in pursuing a contract-to-hire or flexible workforce solution, it’s much easier to do so with a workforce partner in your corner. PEAK’s success in technical hiring has enabled us to help our clients navigate complex labor markets with precision—and we can do the same for you.