As contingent staffing led the employment crash of 2008-2009, it is roaring back in the 2010s. As they revamp their businesses, employers in several industries will continue to hedge their labor bets by ramping up with contract and temporary labor.
“The general sense is that this particular recovery has much more uncertainty than previous ones, though all metrics now point to improvement,” says Jai Shekhawat, CEO of Fieldglass, a Chicago provider of software for contingent workforce management. This perception of continuing business risk resulted in a staffing trend that saw an increase in staffing activity for staffing firms that survived waves of consolidation.
The Impact of Contingent and Temporary Staffing Trends on Staffing Companies
There’s no denying that it’s been a stomach-churning ride for all stakeholders. From 2007 through mid-2009, the temporary workforce dove by 33.7 percent while the total private workforce dropped by just 5.8 percent, according to an analysis of Bureau of Labor Statistics data in The Atlantic.
Then in 2010, employment in temporary help services rose by about 300,000 to 2.21 million, according to the BLS. “By 2012, contingent employment will have returned to 2008 levels,” says Dana Shaw, senior vice president for strategy and solutions at Staffing Industry Analysts in Mountain View, Calif.
Some see the trend as part of tomorrow’s unconventional workforce and workforce composition transformation.
Riding Out the Storm with Continent Labor
Many companies used contingent labor as a sustaining force as part of their recession staffing solution. Since September 2008, when the financial downturn became a crisis, 88 percent of employers have either maintained or increased the size of their non-employee workforce, according to a December 2010 survey by staffing firm Yoh.
“Five years ago, organizations may not have had the appetite to prove the value of contract workers,” says Amy Lewis, practice leader for talent strategy at Human Capital Institute, a trade group in Washington, D.C. “Now organizations are saying they want to be able to measure the output of a contractor versus a full-time employee. They’re now better able to make a business case for using contract talent, if it’s properly structured.”
Where is contingent staffing coming back with the most vigor? In diverse industries across several US regions:
Professional Services Pulls in Contingent Workers
Given positive experiences with contingent professionals on large projects such as Sarbanes-Oxley regulatory compliance, “clients are now accepting the idea of bringing in more professional-level workers on a project basis,” says Brett Good, a senior district president with staffing firm Robert Half International in Orange County, Calif.
Professional contract employment, based in part on the longstanding practices of the IT industry, is spreading to other sectors. “Business services, financial services, IT and retail are all absolutely growing,” says Shaw.
The creative destruction of the financial collapse has engendered volumes of project work well-suited to the contract white-collar set. “Industries that are going through fundamental change are big users of professional contingent labor,” says Shekhawat. Banks and insurance companies, rejiggering to comply with a slew of recent regulation, are once again heavy users of non-FTE professionals. Contingent hiring is particularly strong in financial services work tied to lower interest rates, such as mortgage refinancing and loan modification, according to Good.
Professional contingent hiring and staffing opportunities are increasing fastest in the Northeast and in the Southeast, where growth is returning, says Rebecca Callahan, president of staffing firm SourceRight Solutions.
Science and Technology Rises with Contingent Technical Professionals
As major corporations sitting on cash begin to reinvest in their futures, they’re marshalling more creative technical professionals on a long-term project basis.
“The main areas are science, technology, engineering and math,” says Lewis. “Typically these people have had a full career as a permanent employee, and they bring an incredible body of knowledge to their contract work.” Defense contractors and construction firms are among the organizations boosting their use of contingent technical professionals.
Natural Resources Boom Hiring Contingent Labor
As energy prices rise with the tide of US and Asian economies, natural resources companies are using contingent labor to ride the wave while mitigating the risk of hiring too much too soon. “The industries that are doing the most contingent hiring are the industries that are doing well, like natural resources, oil and gas,” says Shekhawat. Many of these operations are in Texas, Louisiana, Arkansas and Oklahoma.
Other industries are ramping up contingent labor on the production side. “I see plenty of programs for light industrial,” says Callahan.
What’s the new frontier of contingent staffing in the 2010s? The world’s the limit in global recruitment. “The contingent workforce has gone global,” says Shekhawat. “Now we deploy our solution for one client in a dozen or even 30 or 40 countries.”