“Labor Buyer’s Market” Helps Keep Temp Worker Growth Flat in 2013

Temp labor reached new heights last year as employers ratcheted up the use of contract workers ending the year with 2.8 million temp employees, a 7.9 percent increase for the year.

Staffing firms added jobs at an average of 16,875 a month last year, the fastest pace since 2010, a turnaround year from the recession that began in 2007. Temp growth was slower in January, with 8,100 new jobs. However, too much shouldn’t read into the month, as January’s temp hiring is rarely useful to predict the rest of the year.

Even with the rapid growth in the use of temp labor, bill rates during the year were largely flat, according to a report from IQNavigator. The firm’s U.S. IQNdex 2013 Retrospective report said rates increased less than 1 percent during the year.

“A labor buyer’s market in 2013”

“It was a labor buyer’s market in 2013, with temp bill rates remaining largely unchanged,” said Gary Pollard, VP, information products at IQNavigator.

IQNavigator, which provides technology to manage staffing vendors and temp workers, found regional variations in bill rates, with the highest increase in the Northeast, due mostly to IT bill rates. Nationally, the hourly billing for IT professionals rose 3.3 percent, with some specialties rising significantly higher. Billings for security analysts rose 19 percent during the year.

Average rates for all occupations rose modestly elsewhere in the country, except in the South, where rates dropped an average of .9 percent, due mostly to a downward trend in the professional – managerial sector, the company reported.

Don’t expect to see a repeat of 2014, cautions Pollard. “Our analysis predicts that contingent labor bill rates will experience upward pressure in the latter half of 2014, starting with roles that require greater education or specialized technical skills,” he said.

“This will be due, in part, to a continued increase in demand coupled with an expected tightening supply of workers – thanks to a declining workforce participation rate, an increase in college enrollment for people over 25 years old and an overall aging U.S. population — a combination that will rapidly reduce the surplus of available workers.”