It seems that inflation—and fears of a potential accompanying recession—are top of mind for everyone right now. While US inflation slowed to 8.5% in July 2022, consumers and business owners are still treading lightly after inflation hit a 41-year high of 9.1% in June and GDP shrank by 1.5% in the first three months of 2022. These trends have led big firms like Vanguard to place the risk of recession at 25% over the next year.
Clearly, the economic outlook at this point is uncertain, but there is a silver lining: Conditions like these are ideal for investing in a new venture like franchising, especially in a stable industry that experiences consistent growth. It may seem counter-intuitive, and you may understandably be wary of making a career move when there may be a recession on the horizon. However, owning a staffing franchise positions you to step in and assist both businesses and job seekers alike, providing you with a steady source of income regardless of what the future holds.
Staffing is a resilient industry insulated from economic volatility
In a downturn or recession, many industries tend to suffer. When money is tight, people dine out less, take fewer trips, and purchase goods and services less frequently. This has a ripple effect across the economy, causing numerous industries—restaurants, airlines, and entertainment, to name a few—to feel the squeeze. However, staffing companies help their clients save on operating costs, so we provide crucial assistance during downturns. Even when the economy is volatile, people will be looking for jobs, and businesses will need help finding capable, qualified candidates to fill both temporary and permanent positions.
Even if staffing wasn’t initially on your radar when it comes to future career opportunities, it should be now. Staffing is a wise choice for long-term stability and growth, even in a downturn or global pandemic. Despite many business closures and a general economic contraction during the COVID-19 pandemic, US staffing revenue decreased just 8% in 2020. While overall US business revenue increased 2.2% that year, some industries, like leisure transportation and accommodations, saw their revenues decrease by 40% or more.
And while many industries are still working to make up for losses they took during the pandemic, the staffing industry experienced 16% revenue growth in 2021, with 4% growth predicted in 2022. In contrast, US GDP is expected to grow by a slight 1.7% compared to 2020. The US staffing industry’s predicted revenue this year is on track to increase to $185.5 billion, up from $161 billion two years ago. Few other industries can say they have this strong of a track record of success over the last few years!
Why is investing in a franchise a good idea?
You may now be interested in pursuing business opportunities in the staffing industry, but what makes franchising a better choice than opening your own business? The primary advantage of franchising is that it’s inherently much less risky than opening a new business. With franchising, you still get all the flexibility and personal autonomy you’re looking for, while also benefiting from ample support and resources courtesy of your franchisor.
Let’s start with the steps you’d have to take to define a new business first. Before you could even begin to think about opening, you’d need to create a business plan, test the market, refine your product or service, and take care of dozens of other tiny details. Even then, there’s no guarantee that your new business would be successful. Franchising carries few of these risks. All of the strategy and business planning have already been taken care of by the Corporate team and been proven by many franchisees over the course of years or even decades. Instead of spending valuable time trying to complete these preliminary steps, franchising allows you to instead devote all of your energy to getting up and running—and making money.
Once you’ve opened a franchise, you can take comfort in the fact that your business is built upon a stable, proven business model. The franchisor has already thoroughly vetted their product or service, systems, and processes. They know what works and what doesn’t—so you don’t have to learn those lessons yourself! Plus, reputable franchise brands come with built-in name recognition, which makes it easier to acquire new customers. And after a franchise grand opening, franchisees can continue to benefit from access to the franchisor’s training materials, operational equipment, billing and payroll support, plus any other resources you may need to help run your business.
Finally, opening a franchise makes you part of a community of other franchisees who are eager to share knowledge, tips, and support with their network. As experienced franchise owners, they’ve been in a new franchise owner’s shoes before, and they can help you survive and thrive by sharing ideas that have helped their businesses weather hard times and thrive during upswings.
Get franchisee support in any economic conditions
Interested in learning more about both franchising and staffing? Look no further than Spherion. Working with a company like Spherion sets you off on the right foot and gives you a leg up as you get your business off the ground. To start, you get 80+ hours of comprehensive opening support that gives you all the background information you need to open your franchise, hire your team, and find customers. Spherion also handles payroll, back office operations, and technology maintenance for all of its franchisees, so you can focus on running your business—instead of on nitty-gritty details.
And every step of the way, you get ongoing support from Spherion and our franchisee community to help you build long-term growth. Our Franchisee Advisory Board is available to answer big-picture questions or help you find a way forward when you get stuck. Spherion Corporate conducts regular sales and recruitment training so your team is kept up-to-date on best practices and the newest strategies, ensuring greater success. To drum up new business, Spherion’s corporate marketing team launches creative nationwide marketing campaigns and offers tailored support for individual franchise locations. These are just a few reasons why it’s better to franchise with Spherion!
Nervous about making such a big move?
It’s natural to feel nervous about making a major decision, but consider this: Staffing—and franchising through Spherion—offers greater flexibility than many other business ownership endeavors. In staffing, there is no fixed inventory, complex machinery, expensive equipment, or long-term fixed expenses. That means you benefit from low overhead, which makes it easier to quickly scale operations to meet business demands, whether the economy is in an upturn or a downturn.
You may also be concerned with increased interest rates that can make borrowing money for payroll and employee expenses higher. However, there are plenty of funding options available. Spherion is proud to offer in-house financing for qualified applicants. Companies like Spherion use corporate cash flow for all payroll expenses and will fund payroll and accounts receivables for 60 days at zero interest. Actions like these ensure that your business’s profitability is insulated from interest expenses and bank fees.
Finally, you might be overwhelmed by the thought—and expense—of providing payroll, insurance, and other benefits to your team. But with back-office support from a franchisor, these stresses are removed. Spherion covers the costs of staffing employee payroll and maintains all the necessary insurances, coverages and benefits required by state and federal law. For the franchisee, this means no expensive insurance policies, benefit plans, or tax responsibility for the employees you assign to customers.
There is no “perfect time”
Much like with every major decision, there’s never a “perfect time.” There’s always a reason to wait or put a decision off until later. That said, right now, with a potential recession on the horizon, is an advantageous time to make the change.
During economic turmoil, companies look for ways to become more nimble, flexible, reduce costs, and maintain availability of labor to meet customer expectations—which means staffing firms will see increased business from companies looking for temporary workers or hires for new positions during restructuring. And after a recession, the accompanying economic upswing results in sustained demand for new hires, which means long-term future growth.
If you’re interested in franchising, the best time to start is yesterday. It takes a minimum of six months to optimize your business and get it off the ground, so delaying the decision to franchise until the market is better means you’re likely to miss out on the next up cycle. It may seem risky, but remember that franchises have a proven ability to prepare for, respond to, and adapt to constantly changing economic conditions. As long as you know how to adapt the way franchise organizations do, you can ride any wave.
If you're looking for a stable income source that can weather most any economic conditions, talk with one of our franchise development team members. They're eager to share how a Spherion Staffing & Recruiting franchise is a great business opportunity.