CWS 3.0: April 2, 2014

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Taking the Pulse of Contingent Labor

According to our most recent Staffing Industry Analysts Pulse Survey, temporary staffing revenue growth held steady in January and February. Year over year, staffing firms reported 10 percent growth for each month while 49 percent of participating staffing firms reported an increase in new orders. What’s really interesting for buyers is that this follows a continuing upward trend, especially for buyers of healthcare staffing. On another positive note, the U.S. Bureau of Labor Statistics reported that nonfarm payroll employment increased by 175,000 in February while the unemployment rate was little changed at 6.7 percent. Located in the south? Staffing firms in the South/Southeast reported the highest increase in new orders.

Steady growth. Office/clerical and information technology staffing show steady growth as well in the contingent arena, with both reporting a median 10 percent revenue growth year over year. Keep your recruiters and staffing firms focused on IT, change is the nature of the beast here with some large, well known firms in Silicon Valley reporting a tenure of less than one year for regular hires. With such markets, it’s important to make sure your brand and strategy are competitive and you can attract a pipeline of candidates with the right technology expertise.

On the other hand, demand for contingent financial professionals seems to be easing, as the finance/accounting segment went from 7 growth percent in January to 4 percent growth in February in our survey.

Bill rates. Does it seem your rates are increasing in some segments? They are. A net proportion of firms reported an increase in contingent bill rates overall, particularly in IT and industrial staffing. However, this trend does not hold true for manufacturing contingents, with a net proportion of firms reporting a decreasing bill rates overall. The BLS reinforces the findings of the Pulse Survey, in February the manufacturing workweek was unchanged at 40.7 hours, and factory overtime edged down slightly to 3.3 hours. Also, the manufacturing workweek has declined by 0.6 hour over the past three months for production workers, all possible reasons for decreases in manufacturing contingent worker bill rates.

Overall, the pulse of contingent labor is strong, despite — or in part due to — a declining labor participation rate. In February, the BLS reported the lowest labor participation rate since 1978. Whether you believe this is attributable to retiring baby boomers, marginally attached workers or discouraged workers combined with a low unemployment rate, it results in less available talent. Recent acquisitions may elevate the contingent workforce industry to a whole new level in terms of capturing companywide talent metrics, spend and more C-suite attention.

The current landscape also provides an opportunity for companies to get creative in their quest for talent. For example, have you thought of bringing back those valuable retirees and having them mentor new college grads? Take it a step further and use your tools to measure the pulse in your company, to identify the next great challenge for talent and look at how your company can proactively meet it.

Further, you can help yourself and those staffing vendors that don't participate in the survey by asking them to take part. The next survey cycle is now open: Pulse Survey.