Contingent work force is now regarded as the workforce of the future with a majority of staffing industry professionals or staffing agencies choosing temporary staffing business as their core businesses. The 2014 Buyers Survey conducted by the Staffing Industry Analysts on companies (with more than 1000 or more employees) reveals that buyers are most bullish about expanding their use of highly skilled contingent workers, Statement Of Work or SOW consultants, offshore workers and outsourced companies. Staffing buyers are planning to increase the contingent work force that will most likely include the use of SOW or Statement of Work contracts over the next ten years.
One of the main reasons for using the SOW contingent workers is that the process of using them is quite simple when compared with the relative complexity of the temporary workers or employees from staffing firms. The buyers are just required to pay for the deliverable in case of SOW workers in addition, they require less supervision. However, it does not mean that clients or buyers will not be using more temporary staffing agencies, but temporary expansion plans would be moderate. The contingent workforce is expected to grow by almost thirty percent during the next three years. It is estimated that there are currently 17.7 million independent workers in the United States and by 2018 it is estimated that there would be 24 million independent workers.
About 20% of the 17.7 million are Millennial with their numbers growing dramatically over the next five years. By 2020, it is estimated that at least one out of two private sector workers will be an independent contractor or have experience of working as an independent contractor in their career. The increasing population of highly skilled self-employed workers is forcing companies to embrace the free agent movement and be prepared to meet the unique engagement needs and an opportunity to capitalize on this unique talent pool.
Some of the basic reasons behind the growth of contingent work force include the below mentioned ones:
- Companies are not sharing the wealth with their employees that are resulting in a significant erosion of trust among permanent employees.
- The technological advancements are resulting in low barrier to entry that exists today in starting own contract staffing business.
- With more and more population migrating from traditional employment, the government, especially IRS (Internal Revenue Service) and states are finding it difficult to audit every temporary worker. To come over this weakness, the government through their aggressive regulatory laws is trying to penalize companies that are using independent contractors and is considering reclassifying them as their employees so that these companies could pay taxes.