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Contract staffing keeps breaking records and driving job growth as employers continue to hire cautiously despite an improving economy.

In 2013, contract staffing experienced record high growth each month and “soared” in December with an all-time high of 2,816,600 jobs, according to employment and economic expert Bruce Steinberg, citing Bureau of Labor Statistics (BLS) data. Temporary Help Services, as they are referred to in the BLS’ Employment Situation Summary, accounted for 40,000 of the disappointing 74,000 jobs added to the economy during the month.  The contract staffing penetration rate, which measures what portion of the total American workforce contract/temporary positions comprise, also hit a record high of 2.06 while contract staffing achieved a nearly 10% increase year-over-year.
Although the economy appears to be improving and the unemployment rate is falling, employers are still hesitant to commit to direct hires.  A big reason is instability in Washington with another debt ceiling feud brewing. But the trend toward contract staffing is also driven by some more long-term concerns, particularly the addition of employment regulations that are increasing the cost and complexity of doing business. At the forefront is the healthcare reform law known as the Affordable Care Act (ACA) or Obamacare.

Because of these factors, the recruiting industry statistics indicate that contract staffing growth will continue through 2014 and beyond because, while they may be hesitant to commit to direct-hires, companies still need to get work done. Consider these statistics:

  • 42% of employers plan to engage contract workers in 2014. Only 26% said they same about direct hires (CareerBuilder)
  • Contract workers will comprise 40% of the workforce by 2020 (Intuit 2020 Report)
  • 75% of the economists surveyed by the Associated Press believe the increased use of contract workers is the start of a long-term trend (Associated Press)

For recruiters who are not already offering contract staffing to clients and candidates, these statistics show that now is the time to start.  Your clients need contractors, and they want to get them from a recruiter they have an established relationship with. But absent that, they will find a recruiter who does offer contract staffing  . . .  and they may take their direct-hire business with them. Your best chance for success and strong client relationships is to become a sole-source provider who can satisfy ALL of their staffing needs.

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