Security guard company
Staffing Automotive Detroit
The major change in the job market is the new permanent temporary worker. Both temporary and part-time employment are arguably the fastest growing segments in the new American workforce. Good news for the temporary staffing industry continues as the Bureau of Labor Statistics shows a 50 percent increase since the financial crisis reached its lowest depth a few years ago. By all accounts, the U.S. is not the only nation dealing with this new phenomenon. Reports from BLS's counterpart in the U.K. also showed that employers were replacing full-time workers with part-time hiring.
Furthermore, it appears that these statistics point towards a structural change in hiring practices. Even a healthy economy will not bring back most hiring practices that predates the recession. Consequently, more employers are looking for flexibility with fewer people on their payroll. Contentment with one-fourth of a core staff to generate 80 percent of company value leaves room for temporary staffing agencies to fill the rest.
Rethinking Staffing Possibilities
Companies are rethinking how people are staffed to perform specific duties. And, temporary staffing is rethinking how it can continue to build relationships around these new structures. Generally, companies are reorganizing workflows and innovation based on project-oriented work. Facilitating a faster, less expensive way to work makes it easier for contingent workers to participate.
Technology also plays a significant role in redesigning job descriptions that impact how knowledge and skills are plugged into the workplace. Requirements of jobs have shifted dramatically even before the Great Recession, which began laying the foundation for the new role of temporary staffing services.
This foundation paved the way for companies in fast-growing markets looking to temporary workers. For instance, employment opportunities in healthcare for skilled temporary workers increased during 2013. Some of the growth relates to recovering from effects of the recession. Preparation for the new healthcare law has also increased demand for staffing temporary employees.
Information technology is another strong area of growth for temporary staffing services. Many companies continue to make technology investments even as they are slow to hire permanent employees. By the end of 2013, the IT industry is expected to see an eight percent growth.
Likewise, demand for marketing and workers with creative skills is forecasted to grow by eight percent. This increase is spiked by strong demand for mobile apps, social media campaigns and website design for businesses.
Demand for industrial workers is largely due to modest gains in construction, manufacturing and energy sectors. Projections for staffing temporary industrial workers is a six percent growth. While these percentages may seem modest individually, collectively they bring a significant revenue increase for the temporary staffing industry.
In addition to growing markets, temporary staffing is also witnessing markets that are either near or on the verge of surpassing previous records of demand. Adjusting for inflation, temporary staffing services benefit from a seller's market in high demand areas where workers are scarce. Ultimately, this gives staffing agencies that can find top talent more pricing power for services.
Generally, staffing agencies can set fair pricing levels because recruiting for skilled workers is more challenging than filling low-level positions. In addition, companies pay more to receive added value in services from the agencies. Furthermore, the time it takes to recruit high demand positions is longer because of the scarcity of qualified candidates.
On the other hand, demand is weakening compared to historical peaks for the more common temporary positions. These include clerical staff, accounting/finance professionals, legal workers, travel nurses and placement for direct hires. Much of the decline is related to the recent recession that created an ample source of workers in these fields. If this trend continues, these staffing markets could become a buyer's market with lower pricing and higher competition.
If a silver lining exists for these segments, it is contributed to potential growth for some existing staffing agencies. However, it is also possible that these losses will continue due to permanent factors that are changing the employment landscape. For example, labor-saving technology may replace some workers and freelancers can be hired through online platforms for some clerical functions.
Continued Projections for Growth
Industry experts believe that more upside is ahead for temporary staffing in the U.S. Currently, the industry employs 2.7 million Americans with a market share nearing $131 billion annually. Assuming a modest 2.2 percent increase in GDP, the overall growth of temporary staffing could equal six percent during 2013.
Two sources, based on positive economic news during the first half of 2103, are contributing to the positive upbeat: a fast U.S. economic recovery and more temporary workers penetrating the market. Growth in housing and construction coupled with lower gas prices offers hopeful gains. The proportion of temporary workers compared to the overall workforce may rise faster in part because of healthcare reform./
According to BLS, temporary services increased by seven percent in March and April 2013, which was more than the industry experienced in the previous year. The steady pace in growth promises more through 2014 by reaching 95 percent of its historical peak. Engineering, education and retained search are predicted to show the most growth.
Reasons for the Significant Role of Temporary Staffing
At the height of the recession, the ratio of unemployed workers and job openings was six-to-one. This built a faulty theory that workers were competing against each other for one job. While this might be true for some situations, this phenomenon was also masking changes in how companies wanted to get things done. Instead of competing against one another, workers were actually competing against alternative ways to work.
For many companies, value creation became the impetuous for hiring workers. If most of that value cold come through hiring temporary workers or implementing automation processes, they were not hiring permanent staff. When tweaking a business process empowered three workers to be as productive as five workers, this eliminated the need to hire two more people.
Typically, temporary staffing agencies are tasked with growing business in times of economic boom and decline. The question for staffing agencies is not whether they can help companies find full-time workers. Rather, they need to ask how can temporary workers become more valuable in the changing structure.
They must also question whether companies are willing to invest in developing the knowledge-base and capabilities of temporary workers. Some agencies may have to offer training and professional development services to demonstrate the value of using more temporary workers.
The Bottom Line for Temporary Staffing
The bottom line for temporary staffing agencies is that growth can continue. Even during economic uncertainty for many companies, agencies are poised to meet the rising demand with flexible staffing options. Jobs are dramatically different than what workers faced a decade ago.
Industries that have experienced the biggest changes are relying on temporary workers. Retail, financial services, education, publishing, real estate and even health care are some that have gone through significant transitions.
Demand for temporary workers in these – and other – industries are at historic high levels. Competition for scarce resources in growth markets will increase pay rates if the supply of workers is low. Temporary staffing agencies can work to fill the gaps by improving recruitment efforts to fill more positions. Nearly 40 percent of employers expected to hire only temporary workers, opportunities for growth abound.
With growth comes responsibility. Growth means raising standards in how agencies recruit more workers to meet market demand. Temporary staffing agencies bear the onus to demonstrate a willingness to raise expectations from candidates. Even though jobs are categorized as “temporary,” workers must be committed to being productive.
The days when temporary workers were called on as a last resort, or to do busy work, are over. As more companies move toward flexible staffing options, temporary staffing agencies are becoming an integral part of the business community. Workers and agencies must also achieve consistency in performance based on business expectations.