Contract staffing is emerging as the driving force behind the job growth with employers continuing to hire cautiously in spite of the U.S. economy seeing growing trends. During 2013, contract staffing has experienced a record growth every month with the month of December recording an all time high time growth of 2,816,600 jobs according to the data of Bureau of Labor Statistics or BLS. The temporary help services (inclusive of contract staffing services) accounted for 40,000 of the 74,000 jobs that had been added to the U.S. economy during the month.
The contract staffing penetration rate (portion of total American workforce contract/temporary positions) also hit a record high of 2.06 with contract staffing having achieved about 10% increase on year on year basis. The employers are still hesitant to commit to direct hire staffing in spite of economic improvement because of financial impediments in the form of debt ceiling standoff. The other biggest reason for employers being driven to this mode of staffing is related with long-term concerns such as employment regulations that are increasing the cost of doing business. Amongst these reasons is the Affordable Care Act (ACA) or Obamacare mandate with 2015 deadline hanging as a domicile’s sword. Under this mandate, employers/companies with 50 or more full time equivalent employees are required to provide health care coverage for the employees or otherwise have to pay penalties.
According to the Career Builder’s report about 42% of employers are planning to utilize contract workers during 2014. There is a hot growing trend in the field of Science, Technology, Engineering and Mathematics (STEM) arena with competition for talent in these areas in great demand. Staffing agencies that can provide contractors in this area are most sought after as a lot of work in this field is project based. Jobs seekers in these industries also prefer contract staffing services due the flexibility and higher earning potential that the contract works offer. Those staffing agencies that are up till now are not offering the contract staffing services are now seeing benefits in this mode of staffing to recoup their lost revenues and are preparing to add this into their business model.