As we glide into 2014, the forecast looks good. Based on our research, we see strong long-term fundamentals for the industry and solid short-term growth prospects that benefit buyers and suppliers. Buyers continue to evolve in sophistication and suppliers are evolving in their roles as advisors and strategic partners. The contingent workforce space continues to evolve and mature, with technology pushing online staffing and the human cloud models.
The temporary help employment numbers from the U.S. Bureau of Labor Statistics continue to go up, confirming the growing use of contingent labor. Temp employment rose by 40,000 jobs in December, from November, amounting to 9.6 percent growth from December 2012. Meanwhile, the percent of the total U.S. workforce sourced through staffing firms hit an all-time high of 2.06 percent in December 2013. (The contingent workforce is actually even larger than these numbers indicate, as they don’t reflect contingents engaged outside of staffing firm relationships, such as independent contractors.)
We also expect to see a growing focus and professionalism of contingent workforce management, which is the direct result of the increased use of contingent labor and the maturation of the space.
Let’s look at some facts: The contingent workforce at the average large company comprised 16 percent of the overall workforce in 2012, up from 11 percent in 2005. There is increasing senior management attention on this spend due to the growth of vendor management systems (VMS) and managed service provider (MSP) usage, giving greater visibility to increasing spend. Our surveys tell us that 73 percent of large companies have a VMS and 58 percent have an MSP in place. Procurement and HR are leading CW programs, with procurement in the lead role 63 percent of the time and corporate HR in the lead 50 percent of the time. Finally, there is a growing focus and professionalism of CW management, nearly 50 percent of CW managers spend time on this role majority of their time, up from 26 percent in 2005.
At the same time, our forecasts for the U.S. staffing industry tell an interesting story when it comes to the growing use of temporary labor. Office/clerical staffing is predicted to grow at only 2 percent this year, down from 4 percent growth in 2013. Industrial staffing is to grow at 4 percent, compared with 5 percent in 2013. Perhaps some of this slowdown in growth can be attributed to online staffing, robotics and technology. Still, the ranks of temps in these areas are going up.
Meanwhile, IT staffing is predicted to grow at the same rate in 2014 (7 percent), and technology is hungry for talent. Healthcare staffing is also expected to grow 7 percent this year, up from 4 percent growth in 2013. The Affordable Care Act, baby boomers requiring more medical care and retiring healthcare workers all are playing a part in pushing the demand for healthcare professionals. Engineering remains steady at a 5 percent growth rate for 2014, unchanged from 2013. Finance and accounting is predicted to grow at 5 percent, up from 2 percent in 2013, while growth in place and search staffing will increase to 8 percent growth in 2014 form 7 percent last year.
This information can benefit contingent workforce managers as they chart their course for 2014. For example, the expected growth in healthcare staffing usage means healthcare provider organizations will need to be diligent and strategic in working with their suppliers to plan for resource availability. Make sure your funnel of talent is already feeding into those areas you have the most demand for. Talk to your suppliers and use their expertise to plan to use educational, community and referral resources in a comprehensive way to line up talent for 2014 and beyond.
The demand for IT temporary resources will continue to grow exponentially, so buyers will need to position themselves as a preferred employer, offering opportunities for IT temporary workers to sharpen their craft while providing you with the talent you need. Use your brand to attract the best and the brightest contingents. Finance and accounting segments are on the rebound. If you are in financial services, look at high demand occupations like financial analysts and jobs related to compliance in the global major metropolitan markets. Make sure you and your suppliers are ready.
Finally, know that the contingent workforce space and the models continue to evolve and mature. Work that can be done online continues to rise; online staffing is now at about $1 billion globally. While the market share for online staffing is quite small now (less than 1 percent of the temp market), Staffing Industry Analysts projects it could grow to $15 to 20 billion by 2020; given the right conditions, it could even reach $40 to $50 billion. Direct and staffing supply chain models are very mature and will either evolve or dissolve to accommodate online staffing and whatever lies in store with other emerging human cloud models. Prepare for the future and set sail equipped for the change and growth in your contingent workforce that lies ahead in 2014 and beyond.