The most recent report from the U.S. Bureau of Labor Statistics (BLS) shows that the economy gained 295,000 jobs in February 2015, while the unemployment rate declined 0.2 points to 5.5 percent, the lowest in six and a half years.
The biggest employment gains were found in food services and drinking establishments with 59,000 jobs added, followed by professional and business services with 51,000 new jobs, and retail trade with 32,000 new jobs. Construction added 29,000 more jobs, healthcare added 24,000 jobs, transportation and warehousing added 19,000. Employment in mining decreased by 9,000 jobs, and remained flat in financial activities, wholesale trade, information, and government.
Average hourly earnings grew 3 cents in February 2015. Overall, wages have increased by 2 percent over the past year. According to the Payscale Index, wages should grow 1.7 percent in the first quarter of 2015. Some experts say that the flat wage growth is troubling, since the economy is adding both high-paying and low-paying jobs. Pre-recession wage growth was upward of 3 percent per year.
Talent Shortage is Top Hiring Challenge
According to the Glassdoor Recruiting Outlook Survey, shortage of talent is the top hiring challenge. Of the hiring decision-makers surveyed, 48 percent have difficulty finding qualified candidates for open positions. More than half say that passive recruiting has been less effective in attracting highly qualified candiates over the past year.
Top Recruiting Challenges
According to Tim Low, the Vice President of Marketing at PayScale, employers may need to raise wages to better attract talented labor. A Bullhorn recruiting trends survey of recruiting agency professionals found that 75 percent of respondents said there was a skills shortage in the industries for which they recruit. Jeff Owens, President of Advanced Technology Services, says that companies need to invest in employee development programs to foster talent internally.
“We’ve more or less solved the skills gap by recruiting and training and developing and engaging the right kind of people. It requires attention. It requires investment, all those types of things. There’s a solution to the skills gap.” ~Jeff Owens, President of Advanced Technology Services
Temp Employment Expected to Grow Over Next 5 Years
A study released recently by CareerBuilder reveals that temporary employment is expected to increase by 3 percent from 2014 to 2015. And from 2014 to 2019, it is expected to increase by 13 percent.
Data from the American Staffing Association shows that during the third quarter of 2014, staffing firms employed nearly 3.3 million temporary and contract workers each week.
“Temporary employment will continue on an upward trajectory as companies look for ways to quickly adapt to market dynamics. Two in five US employers expect to hire temporary or contract workers this year, which opens new doors for workers who want to build relationships with different organizations and explore career options.” ~Eric Gilpin, President of CareerBuilder’s Staffing and Recruiting and Healthcare Divisions.
A study based on data from Economic Modeling Specialists International shows that among occupations that pay less than $15 per hour, substitute teachers and home health aides will add the most temp jobs from 2014 to 2019 at 33,099 and 20,420 jobs each. Among occupations that pay more than $15 per hour, customer service representatives will add the most temp jobs at 100,642 jobs added.
Occupations for Temporary Employment Expected to Grow
In a separate report by The Jacobson Group and Ward Group, 10 percent of insurance companies plan to increase their use of temporary workers in 2015. The survey found that 66 percent of insurance companies plan to increase staff over the year, with occupations in technology, claims, and underwriting expected to have the greatest growth.
Locum Tenens Physican Rates Increase
A growing number of younger physicians are also practicing on a temporary basis according to a report by Staff Care. Approximately 6 to 7 percent of doctors entering the workforce take jobs as locum tenens in hospitals and physician practices; this trend is anticipated to grow to 11 percent over the next 18 months.
Among the physicians polled who work as locum tenens, 21 percent said they began working in a temporary role right after completing their training. Additionally, 91 percent of healthcare facilities surveyed respondend that they had used a locum tenens physician at least once in the past 12 months, and 42 percent said they are currently looking to hire one or more locum tenens physicians. According to the survey, primary care physicians are in the most demand as locum tenens, followed by psychiatrists and other behavior health specialists and hospitalists.
“New trained doctors are seeking alternatives to traditional private practice, and locum tenens offers them an avenue to explore these alternatives. It’s a way to ‘test drive’ a practice before they buy.” ~Sean Ebner, President of Staff Care
A separate survey by The Physicians Foundation found that 46 percent of doctors will change their practice style within 3 years, and 9 percent plan to work locum tenens. Experts attribute this shift to new and midcareer physicians choosing to pursue job opportunities that offer them flexibility and diversity of work environment. Nationwide, about 44,000 physicians practice as locum tenens, up from 26,000 12 years ago.
“We’ve been thinking we should have seen [wage growth] by now. That is the one missing piece of the recovery.” ~Sam Bullard, Senior Economist at Wells Fargo Securities