The volatility facing global economies is forcing organizations to make tough choices concerning their employees that are both one of their biggest expenses as well as their greatest assets. The rising employment costs in the form of healthcare, taxes, and employee benefits are forcing companies to do more with fewer resources (employees) and to stay lean. The solution to managing costs and at the same time maintaining productivity is to hire temporary staff. The temporary staffing can be termed as one of the strategic staffing solutions that help the organizations to tide away with economic volatility.
The temporary workers in the U.S. economy were about 2.7 million as in June 2013 as per the data of the Labor Department but The American Staffing Association opined that it maybe even larger. The reasons for the demand for temporary staffing among organizations in a volatile economy are due to the following below mentioned factors:
- Temporary workers/employees are available for special projects and peak workloads without any increase in their fixed payroll costs,
- Overtime labor costs is getting reduced as temporary employees are working for extra hours,
- The staffing companies or agencies are assuming responsibility of paying benefits, unemployment benefits, taxes and other expenses concerning their temporary employees or workers. This type of flexibility is allowing organizations to hire temporary employees without any additional employee costs.
- Temporary employees are helping in improving the performance and productivity during peak periods thereby preventing burnouts among core/permanent employees that in turn is helping in reducing absenteeism, and worker’s compensation claims.
- Temporary employees are allowing companies to respond to market demands quickly without adding full time staff or employees.
The U.S. staffing industry is projected to reach a market size of $131 billion by the end of 2013 and is estimated to employ about 2.7 million Americans. The U.S temporary workers/employees penetration rate or the proportion of temporary workers in the overall work force may rise faster than expected due to health care reforms.
The IT and health care sector is expected to reap benefits (even during recession) due to hiring of temporary work force or employees. Indeed, the employment in the temporary help service industry rose to seven percent when compared with the months of March/April-2012 according to the U.S. Bureau of Labor Statistics. Thus, it can be concluded that temporary staffing is playing a very important role during economic downturns.