Contract staffing services as an industry is responsible for the 763,000 of the jobs created in the first three years of the recovery from recession than any other industry in the United States. This data is based on the studies conducted by the Bureau of Labor Statistics or BLS. Contract staffing as a type of staffing services has emerged as a long term business strategy for organizations to build a new combined workforce model that imbibes the qualities of both direct hires and contractors. This model consists of maintaining a small core of traditional permanent employees supported by a larger outer ring of contractors.
This inner part or core consists of key personnel who are necessary for the stability and growth of the business. These key personnel have good experience and are part of the organization for a longer duration. Therefore, any disruptions in this group tend to be fatal for the organization’s existence. On the other hand, contract staff or contractors as an outer ring are responsible for the day to day tasks and critical projects. Any turnover among them does not much effect businesses that are hiring their services. There is flexibility in contract staffing as companies have the choice of adjusting (removing / hiring) the contractors to meet their business demands without incurring the wrath of layoffs that are found in case of permanent or direct hire staffing.
Contract staffing services as such has turned into a boon for companies during recessionary periods and to survive organizations have learned to run lean by adopting this staffing model. The improvement in economy does not affect the contract staffing model as the rapidly changing business environment with its increased regulations, taxes, audits, insurance requirements etc has made the workforce flexibility a long-term requirement. Human Resource experts predict that contract staffing/workforce would comprise about 40-50 percent of the entire American workforce by 2020.
The increasing dependence on contract staffing by organizations has its own challenges in the form of the need for good contractors or contract staffing agencies or firms. Companies needs quality contractors/contract staffing agencies that they can trust with their critical day to day tasks and they will need them fast to respond to real time needs. Due to this reason, the contract staffing firms will become more important partners to their client companies in the coming days ahead.