Contingent workforce is taken as an indicator of the health of the job market. The reasons are not far to seek.
Contract work today is ubiquitous, as high wage jobs requiring high skills are also being taken over by temporary workers. While some cut hair, drive taxis, design clothing and jewelry, share their homes with paying guests or connect with consumers using technology and Internet-enabled applications, others sell hand-crafted items, market innovative concepts, edit/proof content or many other types of contract work. It could be security, janitorial or even transportation, as with Uber. Today your temporary worker is not some clerk but a CEO, CTO, doctor, engineer and highly specialized Nuclear Plant Outage expert!
Analysts keenly watch the rise and fall of temporary worker hiring to get a pulse of the job market and its growth trends. The staffing industry has long known that contingent workers form a part of permanent corporate policy and has scaled up accordingly to meet the recruitment demands of corporate America. Nothing speaks of this better than the $120 billion revenue the industry notched up in 2015 and the nearly 16 million Americans who worked some form of temporary work in the last year.
The number of temporary workers as per estimates by the Government Accountability Office (GAO) could be anywhere between 8 million to 47 million, while some others put it anywhere from 5% to 33%. Such wildly disparate estimates make it difficult to arrive at a realistic estimate of the actual numbers involved.
But we will soon have the Bureau of Labor Statistics working with the Census Bureau to produce a “Contingent Worker Supplement,” as a part of an upcoming Current Population Survey, set to be released in May 2017. According to research by Harvard economist Lawrence Katz and Princeton’s Alan Krueger the measurement of workers in alternative work arrangements is probably being heavily undercounted. They look at all types of temporary, gig or contract work as alternative work arrangements.
After concluding that the net employment growth in the U.S. economy from 2005 to 2015 appears to have occurred in alternative work arrangements, the research of Professors Katz and Krueger throws new light the characteristics of alternative work arrangements:
The research expresses concern that growth in alternative work arrangements could put downward pressure on wages and labor standards, and begs the question of how to extend the social compact between workers and companies to nonstandard employment settings to be addressed.
Yet the increase in contract workers is only going to place increasing burdens on procurement as well as suppliers to fulfill these obligations.
If you’re part of this explosion of contract workers, you need a world-class VMS to handle all the details. It’s time to explore Smart Track. Contact us for a demo today.
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