When economic conditions are unpredictable, workforce planning becomes more complicated.
You may have enough work to keep your current team busy but not enough confidence in future demand to hire additional permanent employees. Alternatively, you might be experiencing a temporary slowdown while preparing for orders or projects that could resume with little notice.
For Canadian companies, ongoing trade uncertainty has added another layer to these decisions.
According to Statistics Canada, 50.6% of manufacturing businesses reported being negatively affected by U.S. tariffs in the year leading up to the first quarter of 2026. However, 23.2% reported increased sales of Canadian products.
These figures show how economic uncertainty can affect companies differently. Some are reducing production or delaying investments, while others are responding to new opportunities.
In either situation, having the right number of employees at the right time remains important.
In this guide, we’ll explore:
- How economic uncertainty affects workforce planning.
- Ways staffing agencies can help companies manage hiring costs.
- How temporary staffing supports changing production and staffing needs.
- When flexible staffing may be more suitable than permanent hiring.
- How to prepare your workforce for both slowdowns and sudden increases in demand.
How Does Economic Uncertainty Affect Workforce Planning?
Economic uncertainty can make it difficult to predict how many employees your company will need over the next several months.
Changes in customer demand, trade policies, operating costs, and supply chains can all affect production schedules and hiring plans.
For example, a manufacturer that exports products to the United States may experience fewer orders as customers respond to tariffs. At the same time, another Canadian manufacturer may see increased demand as customers look for domestic suppliers.
The Bank of Canada’s July 2026 Monetary Policy Report described an economy showing signs of improvement after a period of weakness, while noting that uncertainty remained high.
For companies, this creates several workforce planning challenges.
Hiring too many employees can increase labour costs if orders decline or projects are delayed.
Hiring too few employees can leave existing teams working overtime and make it harder to meet deadlines when demand increases.
Delaying recruitment may protect your budget in the short term, but it can also create staffing gaps when business picks up.
The challenge is finding a balance between maintaining enough capacity to operate effectively and avoiding commitments that may be difficult to sustain.
This is where flexible staffing arrangements can be useful.
How Can Staffing Agencies Help During Economic Uncertainty?
Staffing agencies provide companies with access to employees for temporary assignments, seasonal work, specific projects and longer-term positions.
During uncertain markets, these services can help companies respond to changes in demand without relying entirely on permanent recruitment.
Here are five ways a staffing partnership can support workforce planning.
1. Adjust staffing levels as demand changes
One of the biggest advantages of temporary staffing is the ability to bring in additional employees for a defined period.
For example, a distribution centre may need 20 additional employees to process a large shipment but may not have enough ongoing work to justify 20 permanent positions.
Rather than making long-term hiring commitments, the company can arrange temporary assignments based on its expected workload.
This approach can also support companies dealing with changing production schedules.
If a manufacturer receives an unexpected order, a staffing agency can begin recruiting employees to support the additional work.
When the project ends, the temporary assignments can conclude according to the agreed terms and applicable employment requirements.
This flexibility is particularly useful when companies cannot confidently predict their staffing needs several months in advance.
However, temporary staffing still requires planning. Agencies need time to recruit, screen, and prepare employees, especially when positions require specialized skills.
Sharing upcoming projects and possible changes in demand early can help your staffing partner prepare.
2. Manage recruitment and administrative costs
When budgets are tight, companies often look for opportunities to reduce expenses without affecting their ability to operate.
Recruitment is one area where a staffing agency may help.
Hiring employees internally can involve advertising positions, reviewing applications, conducting interviews, checking qualifications, and completing onboarding paperwork.
These tasks require time from HR teams, supervisors, and hiring managers.
For temporary assignments, a staffing agency can manage much of the recruitment and employment administration process.
Depending on the service agreement, this may include:
- Advertising and sourcing candidates.
- Screening applicants and verifying qualifications.
- Coordinating interviews and assessments.
- Completing employment paperwork and onboarding.
- Managing payroll and required employment records.
- Maintaining communication with employees during assignments.
This can be particularly valuable for smaller companies without dedicated recruitment teams or larger companies whose HR departments are already managing competing priorities.
Does using a staffing agency always cost less than hiring directly?
Not necessarily.
A temporary employee’s bill rate generally includes more than their hourly wage. It may also cover recruitment, payroll-related expenses, government remittances, insurance, and agency services. Direct hires, on the other hand, require the company to manage these remittances and contributions themselves, on top of the pay rate for the employee.
To evaluate the cost, companies should consider the total expense of recruiting and managing employees internally alongside the services included in an agency’s rate.
The potential value comes from reducing administrative work, managing staffing commitments and having access to recruitment support when it is needed.
3. Reduce pressure on your existing workforce
When business slows, companies may decide to leave vacant positions unfilled or delay recruitment.
While this can help control spending, it can also place additional pressure on the employees who remain.
If demand increases unexpectedly, your existing team may need to work longer hours to keep up.
Over time, frequent overtime, and heavy workloads can contribute to fatigue, absenteeism, and employee turnover.
Temporary staffing can help companies manage these short-term increases in workload without immediately expanding their permanent teams.
For example, a warehouse preparing for a large seasonal shipment may bring in temporary employees to support picking, packing and shipping.
This allows permanent employees to continue handling their regular responsibilities while the additional team helps manage the temporary increase in volume.
Companies should still compare the cost of temporary staffing with overtime and other available options.
The right approach will depend on the length of the project, required skills, available employees, and operating budget.
4. Access specialized skills for short-term projects
Economic uncertainty does not eliminate the need for skilled employees.
Companies may still need experienced professionals to complete projects, support operations, or address temporary gaps in their workforce.
For example, a manufacturer adjusting its production process may require an experienced supervisor for a specific project. A company implementing new financial systems may need temporary administrative or accounting support.
Hiring a permanent employee may not make sense if the need is expected to last only a few months.
A staffing agency with experience recruiting for these positions can help identify candidates who already have relevant qualifications.
This may reduce the amount of role-specific training required, although companies remain responsible for providing appropriate workplace orientation, and safety training.
Access to specialized talent can also help companies continue important projects without adding permanent positions before future demand becomes clearer.
5. Maintain recruitment support without expanding your HR team
During economic slowdowns, companies sometimes bring recruitment back in-house to manage costs.
This can be an effective approach, particularly for permanent positions where an internal hiring team already has the necessary resources.
However, temporary and seasonal recruitment can create a different set of challenges.
Hiring 30 employees for a six-week project may involve reviewing hundreds of applications, coordinating start dates, managing attendance, and completing employment paperwork for employees whose assignments will end shortly afterward.
These responsibilities can quickly become time-consuming.
Staffing agencies already have recruitment processes and tools designed to support this type of hiring.
Maintaining a relationship with a staffing partner allows your company to access that support when needed, even if you continue handling most permanent recruitment internally.
How Can Flexible Staffing Help Companies Respond to Tariffs?
Tariffs can affect more than the cost of importing or exporting goods.
They can influence customer orders, production schedules, supply chains, and decisions about future investment.
Canadian manufacturing is particularly exposed to changes in U.S. trade policy.
Statistics Canada reported that approximately 70% of Canadian manufacturing’s net employment growth between 2020 and 2024 was directly or indirectly connected to producing goods for export. Much of that growth was linked to U.S. demand.
The Government of Canada’s tariff guidance also identifies sector-specific U.S. tariffs affecting industries such as steel, aluminum, copper, and automotive manufacturing.
For companies operating in these industries, staffing needs may change as trade conditions evolve.
A flexible staffing strategy can help in two situations.
When production slows or projects are delayed
If orders decline, companies may need to reduce operating hours, delay expansion plans, or reconsider upcoming hires.
Where temporary assignments are already part of the workforce, companies can review future staffing requirements with their agency and plan changes based on expected demand.
A staffing partner can also help communicate assignment changes to affected employees and manage the related administration.
This does not remove the need to follow employment standards or contractual obligations. Any changes to assignments should be managed in accordance with applicable requirements.
When demand increases unexpectedly
Trade uncertainty can also create opportunities.
Customers may look for new suppliers, companies may shift production between locations or manufacturers may receive orders that require additional capacity.
In these situations, having an established staffing relationship can help companies begin recruiting without building a new process from the beginning.
An agency familiar with your workplace, schedules, and job requirements may be better prepared to identify suitable candidates when additional employees are needed.
The objective is to maintain enough flexibility to respond to changing conditions while continuing to support reliable operations.
Access to new business opportunities through your staffing partner
An established staffing agency may also be able to connect your company with potential customers, suppliers or service providers within its network.
For example, a manufacturer experiencing reduced demand from U.S. customers may be looking to build relationships with more Canadian businesses. A staffing agency that works with companies across different industries may know of other organizations looking for new suppliers or production partners.
While these introductions aren’t guaranteed, they can provide another opportunity for companies to build relationships and explore new sources of business during uncertain markets.
This is another reason to maintain an ongoing relationship with your staffing partner, even when you’re not actively hiring.
Real Examples: How ABL Has Helped Companies Adapt
Workforce flexibility becomes particularly valuable when a company’s staffing needs change faster than expected.
Here are two examples of how ABL has supported clients during uncertain market conditions.
Case Study 1: Helping a manufacturer respond to a sudden increase in demand
A mid-sized manufacturing company received a new cross-provincial supply contract that required it to increase production quickly.
Its internal HR team was already managing a full workload and did not have the capacity to recruit a large number of additional employees on short notice.
The company approached ABL Employment for support.
Using our existing candidate database and recruitment tools, our team identified and screened candidates with relevant manufacturing experience.
Within hours, we had assembled a team of qualified workers ready to support the client’s increased production needs.
This allowed the company to respond to its new contract and meet production deadlines without placing the full recruitment burden on its internal HR team.
Case Study 2: Keeping employees engaged during a temporary slowdown
A large contact centre serving the financial sector experienced a pause in one of its service lines during a period of tariff-related uncertainty.
The company wanted to retain access to its experienced customer service and technical support representatives so they could return when operations resumed.
However, there was a risk that employees would move on to other opportunities during the pause.
ABL Careers developed a communication and engagement plan to maintain contact with the affected employees.
Our approach included regular communication, identifying short-term employment opportunities with other client companies and providing access to online training and webinars.
The goal was to help employees remain engaged and maintain their skills while preserving the client’s ability to bring experienced representatives back when needed.
These examples demonstrate two different ways staffing partnerships can support workforce planning: helping companies respond to increased demand and maintaining relationships with employees during temporary disruptions.
When Does Temporary Staffing Make Sense During an Economic Slowdown?
Temporary staffing can be useful during uncertain markets, but it is not the right solution for every position.
Before deciding whether to use a staffing agency, consider how long the work is expected to last and how confident you are in future demand.
For positions requiring extensive company-specific training or ongoing leadership responsibilities, permanent hiring may provide greater continuity.
For shorter projects, seasonal work or changes in production volume, temporary staffing may offer more flexibility.
The decision should also account for training costs, productivity, employee experience, and the total cost of each staffing arrangement.
How to Build a Workforce Plan for Uncertain Markets
A staffing agency can provide recruitment support, but companies still need a clear understanding of their workforce priorities.
Before making hiring decisions, consider the following steps:
Identify your essential workforce needs
Start by reviewing which positions are necessary to maintain daily operations.
Consider which employees have specialized knowledge, manage critical processes, or support important customer relationships.
These roles may require greater continuity, even when demand slows.
Separate ongoing work from temporary demand
Review upcoming projects, seasonal patterns, and expected production changes.
Determine which positions are likely to remain necessary throughout the year and which are connected to short-term increases in activity.
This can help you decide where permanent employees are needed and where temporary staffing may be appropriate.
Prepare for more than one scenario
Rather than relying on a single hiring forecast, consider what your workforce would need to look like if demand increases, remains stable or declines.
For example:
- If orders increase: Which positions would need to be filled first?
- If demand stays steady: Can your current team maintain operations without excessive overtime?
- If production slows: Which planned hires or temporary assignments could be adjusted?
Having these discussions in advance can help your company respond more quickly when conditions change.
Communicate with your staffing partner
Share upcoming projects, anticipated staffing volumes, budget considerations, and potential changes in demand.
Even if you’re not ready to hire, these conversations can help your agency understand what positions may be needed in the future.
A staffing partner can also provide feedback about candidate availability, recruitment timelines, and challenges associated with particular roles.
Review your plan regularly
Economic conditions and business needs can change quickly.
Revisit your workforce plan as new orders arrive, projects change or your company’s financial outlook becomes clearer.
Reviewing staffing levels, overtime, productivity, and recruitment needs can help you determine whether your current approach is still appropriate.
Planning Your Workforce Through Economic Uncertainty
No company can predict every change in the economy.
However, having a flexible workforce strategy can make it easier to respond when business conditions change.
Temporary staffing can help companies manage short-term hiring needs, reduce recruitment administration, and access additional employees without immediately committing to permanent positions.
Keeping permanent payroll costs manageable can also support a company’s financial position. Lenders may consider ongoing payroll obligations, cash flow, and overall operating expenses when assessing credit applications and financing terms. By aligning staffing expenses more closely with demand, companies may be better positioned to manage cash flow and demonstrate financial stability.
It can also help companies maintain relationships with experienced employees and prepare for future increases in demand.
At ABL Employment, we work with companies across Canada to understand their workforce challenges and develop staffing solutions that support their operations.
Whether your company is managing reduced production, preparing for a new contract or trying to balance hiring costs with uncertain demand, our team can help you explore temporary, seasonal, temp-to-hire, and direct-hire options.