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Contract staffing continues to drive the economic recovery as nearly a third of the jobs created in June were contract positions, according to the latest U.S Bureau of Labor Statistics’ Employment Situation Summary.

Contract staffing accounted for 25,000 of the 80,000 jobs created in June. “Temporary help employment” has reached a total of 2.53 million jobs, an increase of 10.7% over last year, according to Staffing Industry Analysts. And the temporary help penetration rate has increased to 1.9%.

According to USA Today, while the utilization of contractors is fairly common following a recession, employer usually convert them to direct-hires or replace them with employees as they get more confident about hiring.  This time, though, many companies are sticking with their contractors because they are still uncertain about the economy. Some are using contractors as more of an ongoing business strategy to better respond to fluctuations in business and to gain specialized skills for short-term projects.

Another factor pushing businesses to use contractors is the cost savings. With contractors, companies don’t have to deal with all the payroll tax issues, and they don’t contribute to employee insurance benefits.  However, contractors can still get those benefits if they are placed by a recruiter who outsources their employment to a contract staffing back-office. For instance, contractors placed through FoxHire’s back-office are paid as W-2 employees and are offered a full menu of benefits, including health insurance through Anthem Blue Cross and Blue Shield. Many people prefer to work on contract because they like moving from job to job, according to a USA Today article.

If you are only placing direct-hire candidates, you may be missing out on lucrative placement possibilities.  Contract staffing is no longer just a quick fix for companies trying to emerge from bad times. It is becoming a long-term business strategy for many companies. To survive and thrive as a recruiter in today’s employment environment, you may want to make it part of your business strategy as well!

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