While temporary employment is near historic highs in terms of penetration of the labor market, concerns about the Affordable Care Act, and how it will impact the staffing industry, tops the list as we look ahead at significant staffing trends of 2014.
First, a quick 30,000-foot look back at the year that was. Employment in temporary help services reached 2.7 million by July of 2013, up by 170,000 from a year earlier and nearly a million higher than in 2009, according to a report from the Bureau of Labor Statistics.
Staffing firms that provide just-in-time labor saw their business grow, as more and more companies make contingent workers a permanent corporate strategy.
"We’ve moved into a mode where companies consistently use contingent workers to deal with ups and downs," says John Challenger, CEO of outplacement firm Challenger, Gray and Christmas, in this post on Monster.com.
More and more companies are making contingent workers a permanent corporate strategy.
That same post said statement-of-work contracting is rapidly increasing, as tying contingent workers’ pay to projects completed rather than hours worked provides an opportunity for cost containment on the client side.
Technology also plays a part in cost containment, as well as flexibility, as it continues to shrink time-to-fill in the on-demand labor market.
Dan Ponce is president and CEO of Industrial Labor Management Group, a full-service training and staffing firm based in Huntington Park, California. On the contingent side, the ILM Group specializes in “fast response” staffing. Ponce says with the use of fully integrated TempWorks software solutions, they fill client requests for workers in manufacturing and light-industrial “within one hour or less of the order being placed into our office.”
As I spoke with staffing agency owners and industry leaders in 2013, the one thing they would all like to "order" is some clear direction on the moving target that is the Affordable Care Act. It came up in nearly every conversation, including the one I had with the vice president and general manager of a large, multi-state, national staffing franchisee. He agreed to share a few candid comments off the record:
"There’s still not enough clarity on the important decisions for our industry surrounding the Affordable Care Act. It is going to change how we do things and add costs one way or the other."
Q: Are you concerned about the ACA, whatever it may turn out to finally look like?
A: "Absolutely. There’s still not enough clarity on the important decisions for our industry. It is going to change how we do things. We’ve been having forecasting meetings, but we aren’t even sure how to classify employees right now. I know I have been hearing some companies say they are just going to take the penalty. We just can’t afford to do that."
Q: Without knowing all the details, do you see the ACA ultinately costing you – and/or your clients – more money?
A: "It’s definitely going to add costs one way or the other. Our ability to somehow pass on those costs to clients will be a big challenge. I can see a scenario where an employer says ‘I don’t want to pay someone’s medical because they’re only working for us for two months.’ But then we say, ‘Yeah, but they’ve been working for us for a year and we want to keep them working’ and there is a cost there. I wish some members of Congress could sit in our meetings and get a sense of all the minutiae and how complex and complicated it is to try and comply with the law."
Another big staffing story for 2014 is the expected hiring growth of older workers. The United States Census Bureau expects the number of people in the 55-64 year-old age group to grow to 40 million in the year ahead. As a result, staffing companies and hiring managers may have to interact with more older people as you look for qualified candidates to fill open positions.
Staffing companies and hiring managers will have to interact with more older people as the number of 55-64 year-olds in the workforce grows.
Hiring may also get more expensive in the coming year, with employment rates rising for many sectors, and temporary hiring increasing. With at least a slightly shrinking labor pool, you may have to spend more money to attract talent.
The debate around the tech talent shortage specifically will no doubt continue in 2014, as the private sector, and Congress, wrestle over STEM education and H-1B STEM visas.
Microsoft says it spends more money on research and development than any other company in the world, and is “opening up new jobs in the United States faster than we can fill them.” They say the skills gap is one of the biggest problems they - and other tech companies - face.
Companies looking to hire people in all sectors may face problems in 2014 if you don't have an optimized mobile recruiting strategy.
70% of the traffic coming to employment sites these days is via mobile.
Bill Peppler, managing partner of Florida-based Kavaliro Staffing Services, says 70% of the traffic coming to employment sites these days is via mobile.
He told Staffing Talk in this post, “If you want to reach your candidates anytime, anywhere, and have them be able to get back to you at their convenience, there is only one way to do that.”
A quick glance at the web pages of most companies on a phone or tablet however, indicates their mobile presence still needs more than a little help. So there is opportunity for those companies who are getting this right.
Peppler’s strategy is to make it easy for candidates. They download his mobile app right from the app store or from his website and quickly search for and apply for a job.
While making the rounds of the holiday party circuit this past month, I had all kinds of conversations with business people of every type; from CEOs of large, publicly traded companies, to small business owners, startup entrepreneurs, and everyone and everything in between.
The common response to the question, "How's business?" "Up, down and sideways." If that was a way to sum up 2013, it will be interesting to see what 2014 brings.
Thanks for reading our posts, for commenting, and engaging, and creating some great conversations. Hopefully along the way we motivate you, provide you with some best practices and lessons learned, as well as specific ways to help you make more money and be better at what you do.
And we all respect what you do. Providing jobs for people is a laudable profession.
Enjoy the rest of this holiday and Happy New Year!