US News reported that since the end of the recession, 54% of new jobs in the USA have been temp work. This statistic comes from the Bureau of Labor Statistics, which also indicated that roughly one in every 50 Americans held a temporary or contingent position as of the end of October.

While you may think that these trends are reflective of the uncertain economy, and that employers are hiring temporary labour because they are unsure that they will have the resources to hire full time staff, you may not be seeing the whole picture. The uncertainty in the economy is certainly driving employers to hire temporary or contract workers; however many employers are beginning to see that their contingent workforce allows them to be agile in the marketplace. They can hire highly skilled workers for specific projects, and when the project is over, they are not forced to find other tasks and roles for these individuals. US News reported that a survey issued by the consulting firm McKinsey 58% of employers said that they plan to hire more “part-time, contract, and temporary workers” over the next five years.

Labour market experts are also saying that a fundamental shift is taking place in the workforce, as temporary and contract workers can now be found across all industries and job functions. Before, temporary and contract labour was primarily limited to manufacturing, construction, clerical and other relatively low paid job functions. However, now contract workers can be found in Information Technology, Engineering, Accounting, Health Care and many other industries.

People are turning to contract work for various reasons. Some people have been laid off, and find that temporary and contract work is the best way to gain income while searching for full time work, and many are finding that contract work often leads to full time positions at those companies. Many find that they prefer the freedom and flexibility of contract work. They are able to choose when and how much they work, and they are able to be their own boss. Still others have found that they would like to work after retirement; however they want to be able to choose their own projects and how much they work. Contract work provides the perfect balance for those looking to work after retirement.

Employers that traditionally had 100% full time core workforce are now looking to migrate to an 80% full time, 20% contingent core workforce. The 20% are usually perpetual contractors, with no expectation to move these people back to full time. This gives employers the flexibility to adjust to changing business demands. However, employers need to be wary of the legal and tax risks that come with employing contract workers, especially on a long-term basis. The laws around contingent workers are complex, and many organizations do not have the necessary resources or competencies to manage these workers in house. For that reason, many employers are also using an MSP provider in order to mitigate risk and save money.

For more information about how your organization can employ contract workers and benefit from an MSP, click here or contact: