Contract and Temp Workers Rising Dramatically; Will Pass 2006 Peak

The world is suddenly waking up to the discovery that employers are bringing on temporary and contract workers at a pace that will soon surpass the peak numbers of 2006.

Subscribers to The Fordyce Letter (a sister publication to TLNT) first read about the surge in temp workers in May. Following the release of the June employment numbers by the Bureau of Labor Statistics, FordyceLetter.com reported, “There are now 2.534 million contract and temp workers in the U.S., a number just a few months shy of exceeding the all time high of 2.657 million reached in August 2006.”

Now, U.S. News says “Temp Workers Make Huge Comeback.” The article points out that the staffing industry has regained almost all the jobs lost in the recession, while other employers have added just over half the ones they shed. It’s not simply a sign of cautious employers bringing in extra help while waiting to see what the economy will do, but evidence of a trend.

“A remarkable change”

The article says, “In 1983, temporary workers made up just over half a percent of all employment. Now, that figure stands at nearly 2.3 percent — a remarkable change, despite the small numbers.”

“It’s a structural transformation,” maintains Arne Kalleberg, a professor of sociology at University of North Carolina who studies the labor force.

Meanwhile, Dana Shaw, former senior vice president for Staffing Industry Analysts, says, “Currently, the average mix of contingents in the Fortune 100 is 20-30 percent of the workforce, but it will evolve to 50 percent.” That evolution, she says, will be complete in barely eight years.

Shaw is quoted in an article by Thomas Fisher, Dean of the College of Design at the University of Minnesota. In “The Contingent Workforce and Public Decision Making,” Fisher details what he sees as the implications of having a workforce that could be as much as 40 percent, even 50 percent contract and temp. Some of these impacts are transitory, as older workers without modern business skills are forced into underemployment and become what he calls “a lost generation of workers.”

Changes in the way we work

The longer term changes wrought by the rise of freelance, says Fisher, has several positives.

The rise of a large, contingent workforce also has a more optimistic side to it, however, since it reflects the emergence of what some have called the ‘next economy’, fueled by the digital revolution. In this next economy, workers will have much more flexibility in terms of how, when, and where they work, and they will have, over the course of their careers, many professional engagements and maybe even several different careers altogether rather than the long-term, relatively permanent employment of the old economy.”

Fisher’s view is that government needs to respond now to the changes in the way we work, rethinking everything from commuting patterns and the consequent impact on highways and public transportation, to the tax incentives communities provide employers.

It may become more important, for example, to provide wide-bandwidth wireless service, flexible live-work housing, and walkable communities with plenty of gathering places nearby than to offer the traditional economic incentives of tax breaks, financial incentives, and minimal regulation. What worked in the old economy can completely backfire in the new one.”

Next week, the Labor Department will release the August employment numbers. Analysts have yet to make public their monthly predictions about payroll changes, however there isn’t much reason to expect any significant swings either up or down.

The report, though, will detail how the staffing industry job counts changed. The expectation is that the numbers will be up.