Trends in Staffing and Contingent Workforce Management for 2013
The contingent workforce sector has undergone many changes over the last few years as employers (of all sizes) have embraced the flexibility, experience and skills that contingent workers can bring to their business. In fact, it appears that 2012 was a banner year for the contingent workforce. According to Staffing Industry Analysts:
- More than $2 trillion has been spent globally on contingent/temporary workers. This includes independent contractors, SOW (statement of work) consultants and agency temporary workers.
- Approximately 16% of an “average” large company’s workforce is contingent, up from 11% in 2005.
- An average of 2.95 million temporary and contract workers were employed per business day by US staffing companies during the third quarter of 2012. This was 4.3% higher than in the 3rd quarter of 2011.
Revenue for the US staffing industry is expected to reach a high of $134.1 billion in 2013. This is expected to beat our industry’s previous high of $132.3 billion in 2007. But as the growth occurs, what trends will continue into the new year? Three that I think are worth noting are:
Impact of Healthcare Reform
More than 75% of staffing firms say that they are unsure how to comply with healthcare reform regulation rules. This hesitancy is well founded. Whereas the re-election of Barak Obama has virtually ensured that the Affordable Care Act (ACA) is here to stay, there are still many, many variables that need to be worked out by 2014 – when most of the larger mandates take effect. Shared Responsibility (requirement that employers with 50+ full-time employees offer health insurance that meets minimum standards) and the resulting penalties are still being analyzed and slowly rolled out by the IRS and other agencies. Until those definitions are set in stone, most companies are still taking a wait-and-see attitude….while preparing for all possibilities.
Fiscal Cliff
A November 2012 survey of 143 chief executives by the Business Roundtable indicated that they are optimistic about continued economic growth, but they are uncertain about the fiscal cliff. This uncertainty continues. Even though Congress came through with an 11 ½th hour compromise, the deal has simply pushed back (not solved) several critical issues – handing them over to the new Congress.
However, economic uncertainty has more of an impact (in terms of anxiety) on short-term labor demands than on long-term planning. Long-term planning continues to move forward, with an eye on short-term stability; the goal of every company is to grow, and executives across the country are designing long-term workforce solutions to support those growth initiatives.
Skilled Talent Will Remain in High Demand
SIA is reporting that skilled degreed and professional labor in healthcare, industrial, engineering, clinical/scientific and IT will have consistent labor demands in 2013, surpassing their pre-recession peaks. In some regions, there is a 10 to 1 ratio of open positions to candidates. This means that you should expect to pay competitive prices for your contingent workforce. In fact, Staffing Industry Analysts are forecasting a 6% industry growth rate in 2013.
Two things are clear for 2013. Employers will continue to try to 1) not increase their labor expenses and 2) demand maximum output from their current workforce. However, uncertainty about the fiscal cliff and the actual parameters around healthcare reform has made a majority of chief executives hesitant to hire more workers or boost capital spending – at least in the short term.
Regulatory, labor, and health care costs will be the biggest concerns of chief executives for the next six months, as our legislators and governmental officials work to find solutions that continue to spur economic growth.
By David Allen, Snelling.com 
NOTE: A full-color, downloadable PDF is available.
