Defined as an employment situation where an employee is expected to remain in a position only for a certain period of time, Temporary employees are hired for a finite period of time, often with the opportunity to achieve permanent employment status after the time period has lapsed. Temporary workers may also be referred to as seasonal employees or temps.
According to Barry Asin, president of Staffing Industry Analysts, staffing as an industry will continue to grow and become increasingly robust through 2020. Today, approximately 10% of the US workforce is temporary/contingent. By 2020, experts anticipate that between 15%-25% of the workforce will be temporary/contingent.
Human Resources Today reports that staffing employment has grown three and a half times faster than the economy and seven times fasterthan overall employment. Throughout 2014/2015, U.S. staffing firms hired a total of 14.6 million temporary and contract employees, up 32.7% from 2013/2014returning annual staffing employment to pre-recession levels. Additionally, from 2017 to 2020 199,639 new jobs are expected to be added in the temporary help services industry, which amounts to a solid 7% growth, according to Emsi data.
Why? There are a few key reasons. Number one, todays US employers are using temporary hiring with greater regularity, especially within IT, manufacturing and healthcare, because it gives them the ability to remain flexible. As global competition continues to put pressure on U.S. companies to over perform, while keeping costs low, temporary labor is a vital piece of that equation. Companies can quickly grow or downsize based on their strategic goals and market demands.
Number two, employers are finding it more difficult than ever to hire those with specialized training/skills to fill their engineering and information technology positions. As the demand continues to grow , combined with a skills shortage, as well as a 4% unemployment rate (2018), those purple squirrels can take their pick and move from job to job at their leisure. According to Monster, these higher “churn rates” could benefit staffing companies, as they will be tapped to fill those open positions.
Number three, Millennials. We define Millennials as those ages 18-34. This generation is now surpassing the 74.9 million Baby Boomers (ages 51-69) in numbers. Millennials entered the workforce during the recession. They bore witness to a nation who found itself at the unemployment line. They watched their parents go bankrupt, lose their homes, lifestyles, etc. And when they graduated from college/university, they found themselves unemployed or underemployed. Born out of necessity, the Millennial generation learned to adapt by cobbling together various opportunities and developing their own businesses. Currently, Millennials are considered to be the largest living generation – giving them the power to reshape how, where and why people work in the United States.
PriceWaterhouse Cooper (PwC) conducted a global generational study. Among the key findings were expectations of work and life balance with 66% of Millennials reporting a desire to create flexibility in their work hours or to work from home. Generally, Millennials are accustomed to balancing many activities, such a team sports, large networks of friends, family, and philanthropic activities. As such, they want flexibility in their work schedule and a strong balance between home and work. And contingent or temporary employment opportunities support their vision of work/life balance.
Staffing companies would be wise to recognize that Millennials are comfortable with what is now called the gig economy, or an environment in which temporary positions are common and organizations contract with independent workers for short-term projects.
Although the potential for growth and sustainability certainly exists for those in the temporary staffing business, the future belongs to those who are willing to quickly adapt to the rapid advancements within the industry, the willingness to meet candidates where they are and the patience and diligence required to ride the next industry wave(s).