In the past 21 years, we've seen a lot of changes and developments in the world of contract staffing and recruiting. As has been our tradition for the past few years, we would like to offer our recruiting predictions for 2014 based on our own experience and statistics, discussions with recruiters, and industry data:
- More increases in contract staffing. Last June, contract staffing reached an all-time high of 2.7 million active contractors. A recent survey by CareerBuilder shows this is likely to continue with 42% of employers saying they plan to utilize contractors in 2014. We have seen this play out within our own business. Last year, we noticed more recruiters making their first contract placements, and we had a number of conversations with recruiters looking to establish contract staffing services in the new year as well.
- Increased but cautious hiring. The statistics at the end of 2013 were very positive. Unemployment was down and the number of job openings was up. But there is still an air of caution surrounding hiring as political squabbles continue to emerge in Washington and the employer mandate of the Affordable Care Act looms. This is one of the factors that will continue to drive employers to contract staffing, allowing them to get the help they need to complete projects and meet deadlines without permanently adding to their overhead in the face of economic uncertainty.
- STEM hiring spree. There seems to be little uncertainty in the STEM (Science, Technology, Engineering, and Math) disciplines, though. In fact, employers are clamoring for skilled workers in these areas and turning more and more to recruiters to help them find the talent they need. Many of the placements will be contract due to the nature of the work and candidate preferences. A number of professionals in these industries like the flexibility of contract work and the ability to earn money for every hour work.
- Obamacare impacts hiring. Again, the Obamacare employer mandate is coming. It was originally supposed to hit on Jan. 1, 2014, but has been postponed until 2015. Employers need to decide soon how they are going to respond. Will those with 50 or more full-time employees provide healthcare insurance as required, or will they opt to pay the penalties? Or will they attempt to reduce their workforce below the 50-employee threshold to avoid it all together? Many are turning to contractors who are W-2 employees of a staffing firm or contract staffing back-office. That way, the firm or back-office will become responsible for the Obamacare compliance.
- Continued worker misclassification audits. This continues to show up on our prediction list, and it's one prediction that is almost guaranteed to come true. The federal government and state agencies are losing more tax revenues due to the misclassification of workers as 1099 independent contractors and are looking to recoup their money. To that end, the IRS, the Department of Labor, and a number of state agencies are now sharing information to enforce the proper classification. You can help your clients by offering to covert their independent contractors to W-2 employees and outsource their employment to a contract staffing back-office.
This new year has the potential to be good for recruiters, but it appears that those who offer contract staffing stand the best chance for success.
Debbie Fledderjohann is the President of Top Echelon Contracting, Inc.