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Is Contingent Hiring a Permanent Strategy for U.S. Companies?

February 7, 2013

Employment is on the cusp of a transformation. Both employers and employees are modifying their attitudes and expectations for where, when, and how people work and what amount of flexibility is to be available to each. As more companies – up from 28% in 2009 to 36% in 2012 – are choosing to employ temporary workers, the workers also seem to be choosing flexible schedules and temporary work over permanent jobs.

The need for flexibility today is not something restricted to any specific gender or age group. Retirees, recent college graduates and everyone in between are clearly expressing the need and preference for flexibility at work. Professionals and skilled workers are choosing the benefits offered by temporary assignments, be they in Finance, Marketing, HR, or Legal. Of the different types of knowledge workers, IT has been the early adopter of temporary work assignments. Often, these jobs also allow people to work remotely, avoiding time-consuming commutes to the workplace which encroach into the time a person could use on the job, improving productivity and efficiency.

Contingent Hiring – a Permanent Strategy?

This need for flexibility on the part of employees coupled with the need of companies to build an economic, dynamic workforce that can rapidly expand or contract is increasing the number of employers planning to offer more contracted positions. Predictions run as high as 50% of all staff being contingent workers within the next decade.

Some predictions:

  • We will continue to see an increase in the number of recent college graduates opting for temporary work.  While this phenomenon was initially driven by economic conditions, an increasing number prefer the work/life balance, the option to “experiment’ with different career choices, and the direct control they have over their careers.
  • Retired baby boomers are taking up contingent work as a way to supplement their pension funds while retaining an active lifestyle which offers them the required respite from full-time work.
  • The current unemployment rate encourages job applicants to accept one or more contingent assignments instead of holding out only for a full time job.  In many cases, temporary assignments are used to demonstrate to prospective employers that the candidate has “remained in the game”, keeping their skills and experiences current.
  • The growth in outsourced project-based assignments encourages the hiring of temporary workers, due to their short tenures and pressing demand for successful deliveries.
  • Sourcing for temporary work assignments has moved online, expanding the scope of temporary work beyond national boundaries and providing even small and medium firms with the competitive advantage offered by outsourcing.
  • Evolving talent management practices are ensuring that positive employee experience is not limited to full time hires only. Many companies insist that staffing agencies offer healthcare benefits, recognition programs as well as holiday and vacation benefits to contract workers. This has resulted in contingent workers deriving greater satisfaction from their careers and workplace experiences, while enjoying the unique advantages offered by contingent work, like flexible schedules, better pay (for the really skilled), and independence.
  • Last but not the least, the limit of 50 employees or more for offering mandatory healthcare under the Affordable Care Act is expected to act as an additional incentive to small and mid-sized firms to eschew permanent hires to meet their talent requirements and boost up the use temporary workers instead.

The fact that contingent work is not limited to entry-level functions, with some of the top talent – all the way to some CEOs being sourced from temporary workforces, is an affirmation of the assumption, which we set out to validate – Is Contingent Hiring a Permanent Strategy for U.S. Companies? The answer, therefore, is: Yes, of course.


Disclaimer:
The content on this blog is for informational purposes only and cannot be construed as specific legal advice or as a substitute for competent legal advice. They reflect the opinions of DCR Workforce and may not reflect the opinions of any individual attorney. Do contact an attorney for advice specific to your issue or problem.

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