CWS 3.0: September 19, 2012

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Temps: Demand in Certain Segments at Historical Highs

As a buyer of agency temporary workers, you want to get the best talent for the best price — and quickly. But how do you gauge whether the price, quality and timeliness quoted by your suppliers is reasonable? One method for gauging the current levels of supply and demand is to look at the current market size compared with its pre-recession peak, which is readily available in Staffing Industry Analysts’ newly released U.S. Staffing Industry Forecast (available to SIA corporate members and CWS Council members here), which projects the 2012 and 2013 market size for agency temporary workers as a whole and by occupational skill segment (for example, information technology, finance/accounting, etc.).

The market size data from the forecast shows that demand has recovered to pre-recession peak levels in some segments, but not in others. Coupled with some assumptions about the current supply of temporary talent (unemployment rates by occupation can be a useful indicator), the market size relative to historical peak provides a big picture context for whether or not the talent that you need to procure is likely to be scarce. In turn, the scarcity of temporary talent is linked to the price (bill rates and markups), availability (time to fill) and quality of talent that you may be able to obtain from the marketplace.

With our framework set, let’s look at the data. The table below (from page seven of the forecast report) lists the current forecasted market size as a percentage of its historical peak. We’ll focus on 2013 for simplicity. Some temporary help segments are expected to surpass their historical peaks in 2013: industrial (112 percent of historical peak), information technology (116 percent), locum tenens/physician staffing (128 percent), engineering (111 percent), clinical/scientific (104 percent), and marketing/creative (106 percent). Demand for temporary talent in these occupational skill sets are at historic high levels. If the supply of workers willing to accept these temporary roles is not readily available, pay rates will rise and time-to-fill will lengthen as buyers compete for scarce resources.

In contrast, some temporary help markets are forecasted to be below their historical peaks in 2013: office/clerical (89 percent of historical peak), travel nurse (67 percent), per diem nurse (78 percent), allied healthcare (95 percent), finance/accounting (89 percent), and legal (82 percent). All other things equal, temporary talent in these occupational skill sets may be more readily available, implying less upward pressure on pay rates and faster time-to-fill.

While the exact drivers of bill rates for a given requisition depend on many factors, the overarching economic story for different temporary skill sets can be a useful tool for gauging supply and demand in the current marketplace. And knowing whether or not your price for talent is reasonable and justifiable is something that every procurement manager needs to know.

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