Contract Staffing Business Is On the Rise

Feb 10, 2011

Last week, MRINetwork released a statement discussing the momentum that contract staffing has been gaining lately:

The contingent employment industry is traditionally a leading indicator of post-recession economic conditions and a reliable predictor of future employment trends. Cautious employers hire temps first, hedging their bets on the recovery, recognizing it is easier to scale back if demand doesn’t materialize. This cycle is no different, say the contract staffing experts at MRINetwork, except this time employers plan to maintain a larger portion of their workforce as contract employees even once business recovers.

This is something that we, and many of you, have made note of in the last several months. Tim Ozier, director of contract staffing at MRINetwork, states, “During the recession, employers learned to refocus on their core business, realizing that a smaller core workforce that was well trained and technologically astute was more effective and nimble than their pre-recession staff. As firms emerge from the recession they are, of course, beginning to hire full time workers but they are also seeing a larger role for highly skilled contract workers who are engaged on an as-needed basis.”

Good business owners observe market trends and learn to adapt their business to meet the needs of their customers. But do you think this is a staying trend, or simply a typical gun-shy reaction to the supposed end of a recession?

We recently polled some Fordyce readers on their thoughts and involvement in contract staffing:

  • 60% of those polled either already offer some contract placement services or plan to in the coming year.
  • Some of the reasons cited for wanting to pursue adding contract placement to current business offerings include:
    • Prior experience offering contract placement services, but unable to sustain the staff to keep it going. Now that things are getting better, would like to re-start that business offering
    • Seeing a need to expand the business in this direction
    • Understanding that companies want to ‘test’ new workers, and they don’t want to have to pay benefits
  • Some of the reasons cited against adding contract placement to current business offerings include:
    • The need for more staff to handle this, but not enough incoming revenue to support it yet
    • Need to focus on one element of recruiting; to be really good at one almost dictates that you won’t be really good at the other
    • Too small a revenue stream to justify having dedicated staff

Though there seemed to be a pretty even distribution of Yes’s and No’s regarding personal pursuit of contract placement services, 63% of respondents agreed that contract placement is a rising trend in the recruiting world and should be paid attention to. Many recognized that more and more employers are looking for full-service firms to take care of both temporary and permanent hiring needs, and that by not at least exploring the option of having contract placement services, they run the risk of losing some of their clients. Others cited economy recovery and employer reluctance to hire full-time employees. As one respondent put it, “I think the economy is still ‘on the mend’ and companies are reluctant to hire full time. A company may have a sporadic surge of business but may not be sure of how to read it — whether it is a fluke or if business is indeed picking up for them. They can hire temporary employees for a short period of time. If their business continues to increase, they already have that option of hiring their temporary employee that knows their business, is already trained, and knows what their expectations are. If not, they do not have the concerns of unemployment issues, bad morale, etc.”

Here’s your chance to share your thoughts — do you think this trend will stay beyond the coming months, or do you think this is a knee-jerk reaction that will fade once we are clearly on the road to economic recovery? Do you think, as a contingency or a retained search professional, that it is important to explore the option of adding contract placement services to your repertoire? Or do you feel that it will take focus and resources away from already successful business practices? Share your thoughts in the comments below!

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