We are having a lot more conversations with clients about flexible staffing than we were even a year or two ago. Permanent headcount is receiving more scrutiny. Budget approvals are taking longer. We are seeing requisitions reconsidered or eliminated mid-process, even when the need for the work has not gone away.
The broader market supports some of what we are seeing. Gartner recently reported that CFO expectations for headcount growth dropped from 6% in 2025 to 2% in 2026. At the same time, the American Staffing Association reported temporary and contract staffing employment was 5.2% higher year over year for the four weeks ending July 19.
That doesn’t mean companies have stopped making permanent hires. It means they are being more deliberate about when permanent headcount is actually the right answer.
Before You Open the Requisition, Look at the Work
When a company tells us, “We need to hire someone,” there are a few questions I think they should answer first. Is the need ongoing, or does it have a defined end state? Is this a backfill or something completely new? What does success look like 12 months from now? Who is doing the work today, and who is feeling the pain?
If a team is already stretched thin, waiting until everyone is underwater before considering additional resources isn’t workforce planning. It’s reacting to a problem that has already happened. Deloitte’s workforce planning research points to a similar approach. Start by looking at the work and skills required, then determine the right mix of resources to accomplish it.
We see flexible staffing work particularly well around system implementations, compliance initiatives, leaves of absence, funding cycles, temporary workload increases, and specialized skill gaps.
It can also make sense for a newly created function where the company knows it needs the capability but isn’t yet certain what the permanent role should look like.
Don’t Treat Contractors Like an Afterthought
Another mistake I see is companies deciding they want flexible talent but treating the contractor experience as less important than the permanent employee experience. If you are bringing someone in because you need their expertise to complete an implementation, close a skills gap, or keep a critical function moving, they are doing important work. Treat the engagement accordingly.
Strong contractors have choices too.
Flexible staffing works best when these professionals are treated as part of the workforce strategy from the beginning.
Think Beyond Headcount
Companies want to remain lean while still having access to the skills and capacity required to execute. Sometimes the right answer is a permanent hire. Sometimes it’s a six-month contractor, a contract-to-hire arrangement, or a project team. The mistake is deciding the employment model before really understanding the work.
The companies that are using flexible staffing well aren’t using it to fill seats cheap. They’re using it to stay fast without getting locked in.
At The Phoenix Group Advisors, we help clients think through both sides of that decision: who they need and the right way to engage them.