Revolving door

Natural business cycles and seasonal sectors can all play havoc with the notion of maintaining a steady head count. So what are your options?


Growth businesses can’t always rely on steady head counts. Many sectors are seasonal and demand can ebb and flow in times of patchy economic growth. So, unless you are recession-proof or see constant demand, there will be times when you need to recruit more or let people go.

So what are the options for growth businesses when it comes to staffing up in busy periods?

Perry Uniform, an online supplier of school wear, makes a virtue of the fact that its seasonal peak – July and August – is a quiet time in the business cycle. That, together with its location in a university city, Leeds, means there is a pool of available labour over the summer.

For the past few years, managing director Bernard Bunting, has recruited students to help meet increased demand. The business has its own factory and warehouse and the temporary recruits assist with core tasks like customer service and despatch.

The business has a £3m turnover and has seen 30 per cent growth over the past four years. However, that growth also creates strains in the infrastructure, says Bunting. Increasing your headcount by 25 per cent for a short period also means you have to be very hands-on in terms of communicating your customer service ethic and ways of working.

Recruiting students has a number of advantages, Bunting says. Many have committed to renting property for the summer ahead of the academic year and so have rent to pay. They are heavily incentivised towards 100 per cent attendance. Perry Uniform offers them more of an internship than a mere holiday job, he explains.

Students often have skills that can be of value to the business. One languages student helped create a Spanish website; the maths Masters student weighed in on financial and statistical analysis; and a design student took a highly active role in the company’s social media programme and the creation of a video catalogue.

Casual and agency staff

Some businesses have less predictable ebbs and flows, for example, a large order from a new customer. In this case, using temporary workers via a recruitment agency can be helpful. Mike Emmott, employee relations adviser at the Chartered Institute of Personnel Development, says taking on staff via an agency for less than 12 weeks raises no legal issues. More than 12 weeks, and the same workers must be considered in terms of sickness benefits, holiday pay and statutory rights.

The tourism and leisure industries make good use of casual labour. If an individual is taken on as ‘as-needed’, the business is not obliged to offer work on any given day. In return, that individual is not obliged to take the work offered. This should be made clear at the outset, Emmott says, and does not negate the need for a contract.

Permanent versus contract

Taking on people via a fixed-term contract can be a useful means of filling short-term needs and avoiding taking on a permanent member of staff in uncertain times. But the timeframe and parameters need to be clearly defined in an employment contract. If the individual is a freelancer, the employer will need to take particular care about commandeering their whole working week, Emmott points out. Self-employed individuals need to be able to vary their work. If they give all their time to a particular employer they will run into difficulties maintaining their self-employed status with the tax authorities.

Full-time versus part-time

Offering new or existing employees a part-time contract may be a good way of dealing with a fall-off in demand. However, part-time workers cannot be treated less favourably than full-time staff. Benefits and holidays should be allocated pro rata, while rights such as sick pay entitlement and other full-time benefits, for example, a subsidised canteen, must also apply.

Hours per year versus hours per week

Hours per year contracts are quite common among large manufacturing businesses; they could also be used to good effect in smaller fast-growing enterprises. The employment contract should reflect the business’ expectations and set out anticipated peak times.

One other option, of course, says Emmott, is simply to be flexible. Small firms are often very good at this, he says. The key to making it work is to state upfront that while you might expect staff to work long hours in busy periods, you are happy for them to take time off when there is less work available. Flexibility can broaden the recruitment pool for growth businesses as it can pull in retired people or mothers of young children – as long as you can accommodate their preferences.

“These days people expect flexibility,” says Emmott, “and there is plenty of evidence that people with flexible arrangements are more motivated than other employees.”

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John Carroll - Helping businesses achieve International success. Head of Product Management & International Business, Santander UK