Staffing Insights: Jon Osborne, VP of Research, Staffing Industry Analysts, on Key Staffing and Recruiting Trends

Posted by Bond Team | October 15, 2013 |

The staffing and recruiting industry seems to get hotter with each passing day. New reports and changing hiring trends show staffing and recruiting professionals servicing nearly every industry. From the rising percentage of contingent labor to businesses preparing for the Affordable Care Act, to increased automation and improved usage of recruiting software and staffing software, the staffing and recruiting industry is rapidly adapting to changing market dynamics in order to succeed.

Jon Osborne, Vice President of Research & Editorial at Staffing Industry Analysts, sat down with us recently to talk about current trends and the future of the industry. At Staffing Industry Analysts, Osborne leads a team of research analysts who create thoughtful insight into the staffing industry and provide access to market research. Let’s see what he has to say about key trends impacting the staffing and recruiting industry, and how recruiting and staffing software fits with key trends.

What’s a key trend impacting the staffing industry?
“Within the last several months, the proportion of jobs that are part time has spiked enormously. So far, 77 percent of jobs created this year were part time and that’s what making all the news. However, when we look at that [figure] over a longer period of time, while it’s still elevated, it’s hardly as impressive,” said Osborne. “More broadly, we have the lowest ratio of full-time employment as a percent of population since 1983, at about 47 percent, and the low-point then was only temporary. We’ve been at the 47 percent level for a few years now, since 2010, and I don’t know another period that it has been like that for as long.  All this may affect the types of assignments requested by buyers and generally is indicative of continued weakness in the job market.”

What are the benefits of a contingent labor force for businesses? 
Contingent labor provides flexibility to a business so that it may scale up or down as needed. This flexibility allows the company to make effective changes to the size of its labor force depending on the strength of the economy and market demands for its products and/or services. In fact, there are trend watchers who predict that by 2020, 40 percent of the U.S. population will be  acting as free agents.

“This last recession was a bit of a learning experience for a lot of companies,” said Osborne. “If a buyer had a significant portion of contingent labor then they were well able to absorb the shock of the economic downturn. Organizations that typically only employ full-time, salaried workers found it much more difficult to adjust as necessary and had to turn to layoffs. This is very disruptive to your labor force and to cut, for example, 5 percent of staff is demoralizing and also results in high outplacement costs. Having a small layer of contingent workers, even 5 to 10 percent, allows a business to protect its permanent layer of workers. Contingent workers don’t have an expectation of long-term employment. As a result, no one [in this employment situation] bets the farm on a contingent job and so there’s much less damage to morale if the economy takes a downturn and cuts to contingent staff have to occur.”

“The number of contingent workers is growing, we have been surveying larger companies since 2005 and we are seeing that organizations are continuing to grow the number of contingent staff. When we first started tracking [the percentage of contingent staff, it] was around 10 percent and now it is 16 percent and expected to grow to 18 percent by next year.”

What are the benefits of the contingent labor trend for workers?
The growing percentage of contingent jobs being offered is not only beneficial for businesses. Workers in industries that fall under the professional sector, like finance, healthcare and tech, are demonstrating that the trend is providing a number of benefits.

“On the worker side, there is a demand in professional work for flexibility and also for higher wages. People who work on a contingent basis in IT or healthcare are typically doing it for lifestyle reasons. You can make $80 an hour for a few months and then live in Bali for a few months, and pick up another gig when you’re ready,” said Osborne.

Obviously, the perks of the contingent trend are felt by more in-demand professions. Fields that require expert understanding of niche practices like those in the technology and healthcare sectors are providing professionals with access to more competitive advantages. Osborne went on to provide us with an example of careers with high and low demand and how the contingent labor trend is impacting employment in those fields.

“Occupational therapists have a very low unemployment rate. Employers are having such a difficult time finding quality workers for this field that staffing firms are tracking them from the moment they get accepted into a training program—before they’ve even taken a class; the wages for this job are high and the occupational therapist is able to set the terms. They choose when to work and employers pay more per hour,” said Osborne. “On the other end, clerical and office workers experience a more ‘try before you buy’ situation as companies like to hire temp workers to see if they are a good overall fit for the position. It’s hard to tell in an interview if the person is right for the job. So a three- to- six month contract provides a period of time to test the person’s fit.”

Why hire a staffing firm?
It’s not uncommon to hear detractors ask “what’s the point?” or “why do you need to hire them?” in reference to staffing firms. People often pose the question of whether it would be cheaper to handle hiring internally. However, despite these questions, there are many sound reasons and benefits to hiring a staffing or recruiting agency, such as access to leading recruiting and staffing software, to fill one or more positions in a company, especially contract or contingent employment positions, according to Osborne.

“Have you ever bought a sandwich? That’s just outsourcing a meal. [Staffing] is no different – it’s outsourcing at its finest,” he said. “As consumers, we outsource almost everything. We don’t build our own car or our own house. With staffing agencies, companies are turning toward a specialist who has mastered employment, turned it into a science and has been trained for the job – making the entire employment process faster and cheaper.”

Category: Management

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