CWS 3.0: May 16, 2012


The Future of Contingent Workforce Arrangements

Earlier in the year, in the midst of presidential primary furor, the U.S. Bureau of Labor Statistics quietly published “Employment outlook: 2010–2020: Industry employment and output projections to 2020.” But future policy makers devoted little, if any, attention to the matter of how the country will be working in the remainder of the decade through 2020 (two presidential terms of office away). We, however, would like to make some observations and pose some questions about the BLS projections of what sectors and areas of employment may be expanding and contracting in the next eight years. For example, what are some notable highlights from the projections? And, more important, what do the projections say about contingent workforce arrangements?

Job Growth?
The BLS projects an increase of 20.5 million total jobs by 2020 (all sectors) and 19.7 million “non-agriculture wage and salary” jobs. (Compare that with 2000-2010, when jobs actually contracted by 3.2 million and 2.0 million respectively). Not surprising, agriculture employment (where contingent work arrangements are significant) is projected to continue to contract. But what’s supposed to go on in the rest of economy?

Click image to enlarge. Source: BLS

Again not a surprise, the service sector accounts for the lion's share of new jobs (18.0 million of the 19.7 million nonagricultural wage and salary). And, within services, the two most expansive areas of employment are projected to be “healthcare and social assistance” and “professional and business services” (which includes the staffing industry), with 5.6 million and 3.8 million jobs respectively.

Healthcare is certainly a sector where we expect to see considerable upheaval and transformation. So we might wonder how work arrangements will evolve and take shape there (again, that would be over and above healthcare staffing jobs that are included in the “professional and business services” category).

The “professional and business services” sector itself, after barely expanding in the previous decade, is projected to grow jobs from 16.7 million to 20.5 million over the 2010-2020 interval (with real output almost doubling from $2.4 trillion to $3.4 trillion, fueled by more scientific and high-skilled roles). The 3.8 million job increase in this category breaks down further. First, the “employment services” industry, which comprises employment placement agencies, temporary help services and professional employer organizations, is projected to add 631,300 jobs, an annual growth rate of 2.1 percent, and reach 3.3 million jobs by 2020, placing this industry among those with the largest projected employment growth. Beyond “traditional staffing,” the report notes, “The management, scientific and technical consulting services industry is responsible for the majority of the employment growth in professional and business services.”

While the BLS also projects an increase in employment of about 800,000 jobs in the sector category called “Non-agriculture self-employed and unpaid family workers,” one is forced to wonder whether these limited categories (“professional and business services” and “non-agriculture self-employed and unpaid family workers”) are good proxies for projections of contingent workforce arrangements in our future economy. To what extent beyond this may other service sector employment categories be primed for a transformation of workforce arrangements not accounted for by traditional contingent workforce sectors? 

At this point, we can only speculate. But if we begin to contemplate and study a range of factors and trends, we might be able to form some hypotheses (or at least make some educated guesses). Some factors and trends that we can start thinking about: 

  1. technology’s effects on workforce models (ranging from platforms like Elance and oDesk to a full complement of remote work capabilities) and on service delivery models (such as remote healthcare, et al),
  2. demographic changes in the U.S. and non-U.S. workforces,
  3. competitive efficiency pressures on organizations, and
  4. evolution of public regulations, institutions and norms.

With regard to contingent work arrangements, what do you think the future will bring? 


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