01 Jun Recent Trends in the Contingent Workforce Landscape
In 2015, the U.S. Department of Labor found that 65 percent of employers anticipate an increase in the use of flexible staffing arrangements to meet their future talent needs.
Staffing Industry Analysts’ April update of the U.S. Staffing Industry Forecast, presented a bright future for the contingent workforce. In their report, this global advisor on contingent work predicted that this industry segment will grow 6% in 2015 and 5% in 2016 to reach a record industry size of $121 billion. This projected growth is no surprise to anyone who has been paying attention to the contingent or “on demand” workforce over time.
With the economy in constant flux it is imperative that businesses remain adaptable and responsive to change. Companies decided it was more advantageous to employ a more elastic workforce, or one that can quickly contract in bad economic times and expand in better times.
Companies today have on-going challenges as it pertains to changes in regulatory compliance, mergers, acquisitions, and constant business transformation. Managing the contingent workforce can be a time consuming and costly process. A Vendor Managed Service Program is an increasingly common way to handle the difficulties in managing multiple staffing providers and providing visibility into their staffing expenditures.
Many organizations make the strategic decision to outsource the management of their contingent labor. Many companies partner with an MSP which avoids the direct cost of managing the process on their own and allows their key resources to concentrate on more critical tasks and initiatives.
Technology is a catalyst, allowing organizations and contingent workers to easily connect and as a result drastically decrease the time that companies take to source and retain quality talent. The average time to hire dropped 43 days at large companies using traditional staffing methods, to 3 days via an on-line marketplace per the SHRM Benchmarking database.
Geography is also becoming less of an issue as it relates to contingent workforce employment. There is more opportunity to work online, hence making it easier to find talent and not be restricted by demographics. In addition, the pool of contingent workers have widened over the years. Baby boomers who are not ready to retire view contract work as a way to have independence without the restriction of a full time job.
On the other end of the spectrum, millennials have witnessed their parents lose jobs when companies merged or downsized, and have had difficulty finding jobs themselves. With the Affordable Care Act making healthcare more portable, millennials exhibit less of a penchant for a traditional full-time job. In the middle are the Gen Xer’s who are deep into building a family, which opens an opportunity for one spouse to stay at home and perform contract work.
The way people work will only become more flexible and variable. Staffing firms will need to be ready to address the different forms of contingent work for which clients will be searching. In addition, the industrial procurement staffing supply chains that affect contingent workforce management will continue to develop. As a result, staffing businesses will need to keep up with those changes to provide the kinds of hires needed, whether they’re temporary or permanent.
The next five years will be exciting – are you ready??
Lauren works closely with vendors and hiring managers and is committed to building a long-term relationship with each key stakeholder.