During years when temporary employment makes up slightly more than 2% of the current workforce (nearly 3,000,000 temp workers) and is continuing to increase, it is fascinating to notice the trends in a booming temporary employment and staffing industry compared to trends in employment as a whole.
The Bureau of Labor Statistics reports that a year over year comparison between temporary employment growth and overall private-sector job growth reveals disproportionate growth trends in the staffing industry. From August 2013 to August 2014 temporary employment realized an 8% spike compared to the more modest 2% growth rate in overall job growth.
Owing in part to economic uncertainty and companies now sidestepping the Affordable Care Act (Obamacare), below are the most common reasons why private sector companies find better workforce solutions through staffing agencies than direct hire.
1. Flexibility: Companies can choose the who’s and when’s to accommodate specific staffing needs and better match their payroll obligations to their revenue.
2. Tryouts: Prior to making a direct hire, Companies can bring in qualified candidates on a short-term “tryout” basis before committing valuable company resources and financially exposing themselves to an employee that just doesn’t work out.
3. Spikes in Workflow: Many companies find that using temporary staff to handle excess work helps to prevent overwork of full-time employees while maintaining the flexibility described in #1 above.
4. Affordable Care Act: As briefly mentioned above, businesses that teeter on the edge of 50 employees—the point at which the ACA’s employer mandate kicks in—have turned to staffing agencies for employees that would exceed the mandate cutoff, thus avoiding the added cost of providing healthcare benefits to all 50+ employees.
5. Workforce Management: Companies too small to justify an HR department or larger companies with specialized workforce needs find good benefits using staffing agencies to manage their workforce. Staffing agencies offer training programs to their employees, manage the payroll and bear associated payroll obligations such as worker’s compensation and unemployment risks.