Contract Staff & Direct Hire Mix – Cuts Cost, Reduces Liability, Adds Flexibility

Business owners face a whole new set of workforce challenges today.   Here is a smart article on 6 of the top staffing issues that have the savvy business owner turning to firms like ProStaff to develop staffing solutions unique to their needs – – –  solutions that cut costs, reduce liability and provide more stability in the workforce.

6 Issues That Will Impact Staffing in 2015

by   on January 27, 2015, 3:51 am
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Contract staffing had quite a year. The “temporary help services sector” added jobs and broke records month after month in 2014. This growth continues even now that direct hiring has finally bounced back from the recession.

So what does 2015 hold for contract staffing? Happily, we are expecting even more growth. Here are the anticipated contract staffing trends for 2015:

1. Continued adoption of blended workforce models 

One of the biggest trends we have observed is the transition from a traditional, direct hire workforce to a blended workforce model that incorporates both direct hires and contractors.

In the blended workforce model, companies typically maintain a small core of traditional, direct hire employees supported by an outer ring of contractors that can be adjusted to meet business needs. This provides companies with flexibility, cost savings, and reduced liability. This trend has been growing over the past several years and promises to accelerate even more in 2015.
2. Growth of technology

The growth of the Internet and mobile devices has changed employment, allowing employees to work remotely and giving rise to virtual teams. In fact, the number of people working from home at least one day a week increased by 80% between 2005 and 2012, according to Fast Company.  These remote workers are the perfect candidates to take on the type of project-based work that is common to contract assignments.

3. Gen X and Y choose contracting lifestyles

These younger workers like contracting because it provides them more flexibility, variety, and more control over their careers. Therefore, we will continue to see more workers in these generations consciously choose contract assignment over traditional jobs.

4. Boomers retiring

At the other end of the spectrum, Baby Boomers are finally feeling comfortable enough financially to retire, creating a knowledge deficit for many industries and companies. This will fuel an already growing trend known as retiree restaffing where companies bring retirees back as consultants on a contract basis to retain their knowledge and skills. Boomers also like the flexibility of these arrangements which allow them to stay active in the workforce and supplement their retirement income.

5. Obamacare impact

The employer mandate of the Affordable Care Act (ACA or Obamacare) began rolling out January 1. This provision requires employers with 50 or more full-time employees to provide them affordable healthcare insurance.  Those with 100 or more employees must comply this year or be penalized, while employers with 50-99 full-time employees have a reprieve until 2016. We predict that the phasing in of the employer mandate will further spur the use of contractors as employers try to decrease their full-time employee headcount.

6. Top contract staffing industries stay the course

We expect contract staffing to remain strong in IT, which has always been the ideal industry for contracting, as well as in engineering and manufacturing, healthcare (white collar professionals with 4-6 years of education), and accounting/finance. However, contract staffing has been growing and will continue to do so for a wide range of business professionals. In fact, we don’t foresee any industry going untouched by contract staffing.

If the growth in the economy continues as predicted, it could be a very good year for recruiters. Contract staffing is a key part of that growth. Therefore, one of the best ways to ensure a successful 2015 and beyond is to make sure you are offering contract staffing as an option to both your clients and candidates.

Debbie Fledderjohann is president of Top Echelon Contracting, Inc., the recruiter?s back-office solution. The company was founded in 1992 and places technical, professional and healthcare contractors in 49 states. Top Echelon Contracting helps recruiters make contract placements and handles all of the legal, financial, and administrative details. They become the legal employer and take care of the employee paperwork, legal contracts, time sheet collection, payroll processing, payroll funding, tax withholding, benefits, workers? compensation coverage, invoicing, collections, background checks, etc.

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