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Managing the workforce in the midst of a weak economy

Posted on February 22nd, 2011 Read time: 1 minutes

The recession kicked off a lengthy period of high unemployment rates that are not expected to return to normal levels for a few years.

The Wall Street Journal polled leading economists, who predict that the unemployment rate at the end of 2011 will be at a historically high rate of 8.6 percent.

The strain of high unemployment and reduced hiring has piled stress on remaining employees, making it difficult for them to spend time strategizing or working on longer-term work, the Wharton School asserts in an article on its bi-weekly online business insight resource – Knowledge@Wharton. Furthermore, the longer-term unemployed will face increasing difficulty in gaining work as their skills become outdated and they don't meet company needs.

In order to expand their workforce, businesses can hire contract workers without having to make the major capital investment that comes along with hiring new employees, notes Wharton. When hiring a contract worker, businesses do not have to invest a large amount of resources in training because many temporary workers come with notable expertise in their fields.

If there are no regular additions to staff, it can affect the long-term prospects for a company. For example, not hiring any full-time or contract workers in one year will result in a lack of new management in four years, notes Wharton management professor Matthew Bidwell.  

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