hough there are pros and cons in hiring a third-party provider to handle business processes, the sheer number of companies offering their expertise suggests that outsourcing is on trend. Technology, in part, has made outsourcing services like payroll and HR easier and more affordable. Likewise, third-party providers have expanded their services in these two areas, meaning business owners get more bang for their buck.

Airswift, an international provider with an office in Anchorage, has assisted employers mainly in technology and engineering sectors with workforce solutions for forty years. It started as a small computer-aided design company in 1979 and grew into a multifaceted consulting, management, and recruitment firm. Through a series of collaborations, mergers, private equity investors, and acquisitions, Air Energi and Swift Worldwide Resources officially merged into Airswift in 2016. Five years later, Airswift merged with its former competitor Competentia.

Driven by three corporate hubs in Singapore; Manchester, United Kingdom; and Houston, Texas, Airswift is an integrated team of 800 employees, 60 offices, and more than 7,000 contractors. The company has had an office in Alaska for more than fifteen years.

“We have a truly global approach and a reach that is unparalleled,” says Christopher St. John, regional director of Airswift in Alaska.

Airswift provides talent acquisitions, global employment and mobility, recruitment, and consulting that covers talent mapping, salary and market rate benchmarking, identification and delivery of cost savings, skills assessment, strategic workforce planning, and performance risk management advice. Determining the right mix of services starts with an audit of a potential client’s resources to identify gaps in their existing business processes, followed by a discussion about best practices and market trends meant to guide future decision making. Airswift then develops a proposal with suggested services and associated costs for the company to review and accept.

“Each solution is customized to individual clients depending on their specific needs,” says St. John.

There are many reasons to outsource HR and payroll to a third-party provider. A company like Airswift provides instant expertise that ensures clients comply with labor and employment laws. Third-party providers can also adjust services as needed, which means they can ramp up for seasonal or project-based timeframes and reduce efforts during their clients’ slower periods. These temporary additions to a company’s core employees are known as a contingent workforce.

However, there are also challenges to outsourcing these services. St. John says that communication, strategies, and goals must be aligned between providers and their clients. Companies that embrace a contingent workforce as their own play an important role in developing a culture of belonging and teamwork, yet they might struggle with not having complete control of contingent workers. Airswift’s job is to ensure companies are fully compliant with federal and state labor laws to mitigate the risk of litigation and protect clients from an array of workforce management issues. Following best practices, like requiring proper documentation for performance issues and accountability, is a priority.

“Ongoing and effective communication is a must,” says St. John. “We conduct quarterly business review meetings discussing strategies, workforce analysis, and trends to get buy-in from client management on future services. We conduct weekly face-to-face meetings with hiring managers to discuss performance, current and future needs, upcoming interviews, candidate feedback, and invoicing.”

He adds that, much like many internal HR teams, third-party HR providers aren’t always on the same page as their client’s internal operations and have different priorities. Overcoming this difference generally means soliciting more feedback from line managers since third-party providers aren’t always “boots-on-ground” and observing potential needs.

“It’s difficult to offer help to struggling employees if we don’t know if there is an issue,” says St. John.

In the face of workforce shortages, relying on third-party providers for business processes may be the answer. According to the January 2023 issue of Alaska Economic Trends by the Alaska Department of Labor and Workforce Development, an older population, lower birth rates, and migration loss in the state translate to fewer current and future workers. People over the age of 71 make up more than 7 percent of Alaska’s population, up from 1 percent in 1980. At the same time, children below the age of 15, the future of Alaska’s workforce, have dropped from 29 percent in 1980 to 22 percent, with further decrease anticipated. And though the state’s working aged (16-70) population still hovers around 70 percent of the total after a series of ebbs and flows, about 20 percent of Alaska’s jobs are filled by nonresidents, with only 10 percent seeking residency.

Many of the infrastructure industries served by a company like Airswift are feeling the pinch. Oil and gas resumed growing after losing a quarter of its jobs during the pandemic. The report anticipated around 400 new jobs to be added in this industry as preparation for the Pikka and Willow projects on the North Slope are estimated to boost employment.

“The current talent landscape in Alaska is very one-sided,” says St. John. “With Willow and Pikka ramping up, the need for qualified talent greatly outweighs the supply within our state. Businesses like Airswift are looking for ways to connect with talent from a variety of sources and communities that have been underutilized in the past.”

Mining is expected to add around 600 new jobs. Construction will potentially contribute another 500 jobs. The transportation, warehousing, and utilities sectors could also result in another 500 jobs combined. If all these industries continue job expansion that exceeds their pre-pandemic levels, Alaska will need to find a way to increase worker supply. Retirement of elderly people and decreased birth rate aren’t the only reasons for a smaller labor force. People leave their jobs for many reasons, including childcare, care for sick and aging family members, health problems, school/additional training, and burnout.

To counter this trend, third-party providers actively promote job opportunities in Alaska. Airswift’s website primarily focuses on recruiting for the oil and gas industry while providing international case studies to highlight previous collaborations. The website emphasizes the need for a highly qualified and dedicated workforce and highlights the benefits of living and working within the state. For instance, Airswift promotes the oil and gas industry as the heartbeat of Alaska’s economy, with professionals receiving excellent pay, benefits, and rotational schedules to maintain a good work-life balance.

However, tackling a workforce shortage is going to be a team effort. Airswift works with companies throughout the state to find quality candidates that meet more than 90 percent of their job description qualifications. Airswift’s definition of “strong candidates” allows it to identify applicants that are a good fit with their clients. Strong candidates, according to Airswift, understand the logistical and environmental challenges the state faces when operating in rural communities.

Outsourcing business processes isn’t likely to decline anytime soon. According to a March 2023 report published by Global Industry Analysts, the global market for HR outsourcing is expected to grow 7.2 percent a year from 2022 to 2030. In the United States, the estimated market value of outsourced HR services is estimated around $10.9 billion as of 2022. The global payroll market size was valued around $8.2 million in 2021 and is expected to grow to $12.4 million by 2027.

While there are few data available for the number of Alaska companies outsourcing these services, it’s clear that third-party providers will play a role in developing the next generation of workforce in one way or another. Companies like Airswift not only assist their clients with the best business practices but also consult on the best way to find qualified candidates. Sometimes it’s by handling the full recruitment process, sometimes it’s assisting with messaging, and sometimes it’s by directing clients to take an entirely different approach. St. John says this will most likely be the case with a generation of workers that simply haven’t had the time or training to acquire the skills of an existing employee.

“Employers need to focus more on soft skills like having the aptitude to learn new skills, problem-solving, motivation, and communication,” says St. John. “These are keys with new hires lacking the traditional education and experience.”

Despite the ups and downs of the state labor market, St. John believes a long-term solution will eventually emerge.

“The future is bright!” says St. John. “We are a growing industry, and as the ‘gig’ mentality continues throughout our younger workforce population, it’s important that companies maintain a pipeline of qualified talent as well as a flexible workforce. This is exactly what companies like Airswift offer to employers and employees alike.”