The changing face of contract staffing

Contract staffing continues to break new records with employers building their businesses with the concept of blended workforce models. As per the studies carried on by Bingham Consulting Professional’s Monthly Employment Review for February – 2014, the temporary help services (that include contract staffing) has added 24,000 jobs reaching an all time high of 2,800,300 that represented a 8.9% increase over February – 2013. In addition, the temporary help services hit a record market share of 2.0336, that edged out the previous record market share of 2.0288 established in April – 2000. Nevertheless, this increase in contract staffing trends is not a short-term trend.

Majority of companies are now using contract-staffing services in the form of contractors as part of their long-term business strategy by following the concept of blended workforce model. This model is based on not only using contractors at periodic intervals but also integrating both direct hires and contractors as a deliberate business strategy. The major components of this new workforce model include maintaining a smaller core of traditional direct employees who are then supported by a larger outside circle of contractors. The direct employees under this model form the core or key personnel who are vital for the stability and the growth of the business. The contractors’ forms the outer circle as knowledge workers and their work is important, as they are usually responsible for everyday tasks and critical projects.

Any high turnover in the lesser group (direct hires) could be very detrimental for the organization’s business. However, higher turnover in the outer circle (contractors) is not as disruptive as it can be easily accommodated to meet the business demands of the concerned organization. This blended workforce model is the outcome of recession that forced companies to run lean by reducing their workforces to the minimum to get the work done. Statistics reveal that over 30% of the jobs added to the U.S. economy post recession have been through contract staffing compared to just 2% prerecession.

The contract/temporary jobs were up by 9.6% during December – 2013 on a year on year basis according to the Staffing Industry Analysts. Contract staffing is now emerging as a permanent strategy with 42% of employers planning to engage contract workers/employees in 2014. Experts opine that by 2020, contract will comprise about 40-50% of the entire American workforce irrespective of improvement in economic trends in the coming years.