Rising labor costs have led employers to increase their usage of contingent labor. With the economy expanding in spurts, employers are still not willing to add full-time employees in mass amounts. Therefore, temporary employment is one of the few sectors of the labor market that is growing rapidly.
In fact, employers in industries that have typically not employed “temps” are now using contingent/temporary workers, and they are using them in increasingly diverse ways. Temporary hiring is becoming a valid business practice, one that is used to not only help companies test the waters during an economic recovery, but one they use to manage the natural highs and lows of their business cycle.
The reasons behind this shift can be broken down to several workplace trends that come top of mind when I think about it. These are:
Changing Needs of the Workforce
Workers, regardless of their generation, are beginning to view work differently. The need for flexibility is greater, due to more people within the household requiring employment, dependent care needs and general work/life balance issues.
Many need/want to exercise more control over their own employment, regardless of whether or not they are at the beginning or end of their career. Contingent work offers them the ability to do this, and many of them are choosing to follow this path.
Employers reacted to the recent recession with layoffs, furloughs and the cutting of hours. The employees that remained were expected to “do more with less”; in other words, work harder and longer hours in order to keep service/production levels high.
However, there comes a point when those employees can do “no more” with less. They burn out, and quality, productivity and morale plummet. A contingent workforce can help. During times of need, the contingent workers allow employees to continue to fulfill their day-to-day responsibilities without taking on additional workload. They also allow employers to uphold their quality standards and productivity (both important competitive differentiators) and morale.
Smarter Talent Management
Businesses are looking to make strategic human capital decisions – for both stability and financial reasons. They are looking to attract, manage, develop and retain high-performing workers. They are beginning to think outside the box in regards to talent management, and many of them are increasingly using contingent labor to fill short-term gaps, long-term projects and specific labor segments.
Critical Skills Shortages
The skills shortage remains an issue. Recently, it was reported that over 600,000 manufacturing jobs remained unfilled because of a lack of skilled talent. Besides manufacturing, there are reported skills shortages in healthcare, education, business & finance, IT, architecture and engineering and skilled trades.
This has resulted in growth of the contingent workforce as workers embrace a contingent model to maximize their pay and employers seek out contingent workers for needed skill sets.
Changes within the Staffing Industry
Staffing firms are no longer just “staffing” firms. We do not just handle “spot recruiting” for our clients anymore (i.e. sending workers to fill in on a day-by-day basis for illnesses and vacations). This move came about because, as I mentioned above, employers are moving away from reactive staffing and are starting to focus on talent management as a competitive differentiator. They have started asking their human capital management partners to help them better manage their entire workforce.
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