The Growing Use of Contingent Workforce | DCR Workforce Blog

The Growing Use of Contingent Workforce

Numbers usually have the final say on all claims and forecasts – either by proving them or by discrediting them totally. In defiance of the gloom and doom predictions made by various economists, unemployment in the USA showed a clear dip for the fifth month in a row, and sent the stock market indexes soaring in excited response. The numbers once again establish the fact that staffing employment is a leading indicator of growth in employment, when the economy displays an upturn.

A recent story by Washington Post reinforces our consistent claims that there is a fundamental shift in the staffing patterns, with more people showing a willingness to take up temporary work and more employers seeking to enjoy the flexibility offered by engaging contractors.  This claim was based on hard numbers projected by a study which said that, U.S. staffing firms added nearly half a million workers and accounted for 91% of total nonfarm job growth from June 2009 through June 2011. So, we can once again say with a lot of confidence and little hesitation that using contractors is a strategically advantageous move for companies whose outlook is clouded by the uncertainty of our times.

Effects of Economy:  It is an undisputable fact that any cutting of jobs in a company starts with the contractors first and that this so-called growth still does not take the overall jobs to where they were prior to the recession. Any return to hiring also starts with growth in the number of contractors rather than permanent hires. The fact that the current economic growth a big surprise rather than what is expected makes it even more precarious and highly vulnerable to the vagaries of the effects of the European economic conditions, oil prices, debt crises or other unexpected events. But, to all appearances the recovery is real and seen to be robust across industries. This is the new question that faces us now – will the growth be sustained, or will it go bust at the next bogey facing us?

Many of the new jobs added are in the temporary workforce. This development is seen to be driving an unforeseen change in the way employment is structured in America as neither the employer nor the employee is seeking long term relationships these days. Such employees have no reservations about shouldering the responsibility for their own health care and retirement pay outs. Having a job in hand does not automatically mean a 401 K to people and this trend has now come to stay. Doing 2 or 3 different jobs is a perfect solution when taking up part-time roles, if employers are vary of offering 40 hours-a-week jobs. People with skills and expertise went through the recession, taking up short-term/odd jobs to make ends meet, while they were simultaneously on the look-out for a job – until it hit them one fine day that they are already in a happy place and earning reasonably well as consultants.

Baby Boomers: The retiring workforce comprising of baby boomers with skills and experience in demand are going back to work with their parent company or anyone who requires their skills as consultants.  This gives them the opportunity to enjoy semi-retirement with flexible timings and schedules while offering them the opportunity to supplement the dwindling income from social security. This is made possible by the fact that companies are also willing to relax their expectations and allow people to contribute good work from anywhere – virtually across the globe – as long as the demands of the task are met in a satisfactory manner.

The 2011 Free Agent survey by Kelly Services shows this to be a reality in today’s job market, with more people opting to work as free agents across different generations, while 49% of all baby boomers (age 47-65) and 66% of persons aged 66-76 are free agents. The opportunity offered by the IT industry – to work virtually – has made it possible to include persons aged above 30 also in this group. On the other hand, a Staffing Industry Analysts survey says that businesses are planning to increase their use of temporary labor by 26%, to take advantage of the better margins and flexibility.

In all this – job security seems to have taken a back seat in the minds of some – but still manages to get ranked pretty high in parameters valued by people. So, the last word on the matter is still not out, and we do have many more interesting observations to make in this regard.

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.
Lalita is a people/project manager with extensive experience in operations, HCM and training and development across industries like banking, education, business consulting, BPO and information technology. She believes in a dynamic approach to life and learning as change is the only constant.