Now that the holiday season is over, the rising temporary wages in Q4 of 2013 might see a counterbalance. However, according to a fourth-quarter wage trend indicator by Bloomberg BNA, overall annual wages will likely increase in 2014. Kathryn Kobe, an economic consultant with BNA, expects private sector wages to increase up to 2 percent this year.
Workers’ concerns over companies canceling health insurance offerings are decreasing as well, with new reports showing that companies view offering health insurance as a means to attract good employees. Many companies believe that offering health insurance is less costly as compared to offering higher wages since the latter requires contributions to payroll taxes.
A Disappointing December
Despite the optimism promised from looking at the growth of manufacturing, the regain of the housing market, the expectations of the holiday season, and the predictions of analysts, December was a disappointing month for employment numbers. According to the latest report from the U.S. Bureau of Labor Statistics (BLS), employers added only 74,000 jobs in December, well below the expected 197,000.
The unemployment rate was down to 6.7 percent from 7.0 percent in November 2013, attributed to more jobless workers dropping out of the labor force, pushing down the labor-force participation rate to a near 35-year low of 62.8 percent. Capital Economics Chief U.S. Economist Paul Ashworth believes that the December weakness was due to the unusually harsh weather that month. According to the BLS report, people who could not get to work due to bad weather hit a 36-year high of 273,000.
“This has been a two steps forward and one step back recovery.” ~Mark Hamrick, Washington Bureau Chief at Bankrate.com
However, PNC Chief Economist Stuart Hoffman urges people to take the employment numbers lightly, noting that by averaging the October, November, and December numbers you have 172,000 jobs added a month, which is close to the 182,000 per month average for the year. He also expects to see upward revisions to the December 2013 figures.
Temp Employment Still High
Even though, December was a slow growth month, employers continued to hire temporary workers. More than half of the total jobs added in December were new temporary jobs.
In December 2013, employment in temporary help services rose by 40,000 jobs. In 2013, the industry added 248,000 jobs, compared to 174,000 jobs added in 2012. Professional and business services also continued to add jobs in December with 19,000 new positions.
According to the American Staffing Association, 2.816 million people held temporary jobs in December, more than the total number of workers in some sectors such as real estate or information/media. Temporary jobs in the United States grew 9.6 percent last year, about six times as fast as overall employment growth at 1.6 percent.
In 2014, industry analysts expect temporary employment to continue its upward trend. According to a survey by executive search firm, Korn Ferry, 57.1 percent of U.S. workers plan to look for better positions in 2014, and 74.4 percent would consider taking a temporary job if a full-time position is not available.
Temp Workers in Demand for the Tech Industry
According to a study by Emergent Research, 18 percent of all IT workers today are self-employed, and this workforce is growing at a rate of 7 percent per year. Emergent says this growth is driven by companies’ quick demand for the right skills as a variable cost. Of the 17.7 million independent workers in the U.S., MBO Partners estimates that one million are IT professionals.
A separate study by Computer Economics found that there has been a spike in the use of contract workers among large IT organizations (defined as those with an IT operational budget of more than $20 million). In 2013, contract workers made up, at the median, 15 percent of a typical large organization’s IT staff, up from 6 percent in 2011.
A survey by Dice.com further revealed that 73 percent of hiring managers plan to hire tech workers in 2014, with demand being heaviest for help desk/technical support jobs.
Online Staffing Revenue on the Rise
A report by Staffing Industry Analysts predicts that online staffing spend could be as high as $46 billion by 2020. The most conservative forecast in the report is a growth of $16 billion, with a “quite plausible” forecast of $23 billion. Online staffing refers to staffing where all work arrangements are enabled via an online platform and where the hiring manager and worker often never meet in person.
I think two of the big wildcards here are the pace of larger enterprise adoption and to what degree staffing firms (and managed service providers/vendor management systems) start to adopt and leverage these models. By 2020, my guess is that the staffing business will be much more hybridized, similar in some ways to what happened with retail and online shopping.” ~Andrew Karpie, Affiliate Analyst at Staffing Industry Analysts.
“The job market ended 2013 on a high note. Job gains are broad-based across industries, most notably in construction and manufacturing. It appears that businesses are growing more confident and increasing their hiring.” ~Mark Zandi, Chief Economist at Moody’s Analytics.