Many companies have made the mistake of using the forecast to plan and executive hiring of new employees so that they could be trained and up to speed when the demand arrives. Although such a practice does add to overhead by bringing employees aboard before they become economic contributors to the bottom line, there is much to be said about service quality by having trained employees on the front line when the customers want and need them.
There are periods in any economy or industry segment when growth seems steady and there are few warning flags ahead. In such instances, it is much less risky for a company to execute its plans for spending in coordination with forecast revenues. But there are many more times in which the near term future is far less predictable, and when early hiring decisions may be just the wrong move, reducing flexibility and reserve resources. It is during such more common times, that you should consider using temporary employees to fill demand as needed, even if brought aboard a bit early for pre-training. And increasingly, there are off shore service providers able to contribute to production and service, expanding and contracting at will, with some sacrifice in control and sometimes in quality.
Further, a company suffers in its reputation with its employees when hiring and firing in short cycles to meet short term needs, unless those brought aboard are hired as temporary or seasonal workers. Every employee wants a stable work environment and does his or her best work in a culture of mutual trust as to continued service as a reward for good work. Constant interruptions in the chain of command, changes within the ranks and threats of impending layoffs together combine to form one of the greatest impediments to efficiency and a strong corporate culture.