Contract Staffing Growth in 2013 Paves Way for Strong 2014

business growthLast year was a big one for staffing firms, and all signs point to more growth for contract staffing in 2014.

Political squabbles and slow economic growth in 2013 lead to a record-breaking year for contract staffing as employers increasingly turned to contractors. In June, contract staffing reached its highest point since 2006 with 2.7 million active contractors. Top Echelon Contracting’s 2013 contract placement statistics show that contract staffing was particularly strong in the following industries:

  • Healthcare – 31 percent
  • Business Professionals and Support Staff – 20 percent
  • Engineering and Manufacturing – 15 percent
  • Information Technology – 13 percent
  • Finance and Accounting – 12 percent
  • HR/Legal/Recruiting – 7 percent
  • Sales/Marketing – 2 percent

A closer look at some of these industries reveals some interesting trends. For instance, while traditional Healthcare is always strong, we are now noticing crossovers into Information Technology and Engineering for Biomedical and Health IT placements. Top Echelon Contracting has a particularly large portion of healthcare placements because it is one of the few back-offices that can handle healthcare placements due to the complex mix of additional tasks and screenings needed to properly qualify healthcare contractors, including licensing, certifications, immunizations, CPR training and certification, skills checklists, blood borne pathogen training and testing, OIG/HHS (Medicare fraud) searches, HIPPA training, and drug screenings.

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The strength of contract staffing in Engineering/Manufacturing and Information Technology coincides with the growth of STEM (Science, Technology, Engineering, and Math) jobs in general.  These industries are big for contract staffing due to the project-based and fluctuating nature of the work.

All indications are that 2014 will be another big year for contract staffing. Even as unemployment numbers are edging downward and economic predictions are positive overall, employers are practicing a cautious optimism in which they are still hesitant to commit to direct hires.  A recent CareerBuilder survey indicated that 42 percent of companies would hire contractors in 2014, while only 24 percent said the same about direct hiring.

As more companies view contract staffing as a long-term business strategy, we are seeing a new blended workforce model emerge.  This model typically features a core of direct hires, who are the company’s key personnel, supported by a larger outer ring of contractors that can be easily increased or decreased based on the company’s needs and economic conditions.

Born out of the recession, this model is being perpetuated by continued uncertainty in Washington and increasing employment regulations, particularly the upcoming employer mandate of the healthcare reform law known as the Affordable Care Act (ACA) or Obamacare. Employers with 50 or more full-time or full-time equivalent employees will be required to provide healthcare insurance to their full-time employees.  Contracting allows them to bring in additional help without exceeding that 50-employee threshold because contractors are the W-2 employees of a staffing firm or contract staffing back-office. Therefore, they do not count toward a company’s 50-employee threshold, and the staffing firm or back-office is responsible for ACA compliance.

Contract staffing will continue to become more of a long-term business strategy across all industries and disciplines but particularly in Healthcare, Manufacturing/Engineering, and Information Technology. Based on our placement statistics, industry data, and conversations with recruiters, we expect the following positions to be in demand:

Healthcare

Manufacturing/Engineering

Information/Technology

  • Biomedical Engineers/Equip Technicians
  • Nurses (RN and LPN)
  • Occupational Therapists/Assistants
  • Pharmacists/Pharmacy Technician
  • Physical Therapists/Assistants
  • Speech Language Pathologists/Assistants
  • Engineers (Control, Electrical and Industrial)
  • Field Service Engineers/Technicians
  • Logisticians/Coordinators
  • Mechanical Engineers/Designers
  • Manufacturing Engineers
  • Project Engineers/Managers
  • Quality Engineers/Inspectors

 

  • Data Analysts/Scientists
  • Information Security Analysts/Specialists
  • iOS and Android Developers
  • Network Analysts/Engineers
  • Software Developers/Engineers
  • Web Designers/Developers

 

It seems the only thing certain in the American economy these days is uncertainty. As long as that is true and employment regulations continue to increase, we can only expect more contract staffing growth.

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Debbie Fledderjohann
Debbie Fledderjohann is president of Top Echelon Contracting Inc., the recruiter’s back-office solution. Find her on LinkedIn.

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