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Labor Costs Shrink as Contingent Workforce Grows 33%

While the job market is heating up, prospective employees are sure to notice a few differences when compared to the past. Most notably, employers are adding more contract or temporary workers as opposed to full-time employees with benefits.

According to a recent CNNMoney.com article Say goodbye to full-time jobs with benefits, the government estimates that 40+% of the workforce will be comprised of contingent workers within the next 10 years, up from 31% as estimated in 2005. In Need a Job? Contract work could be the new normal, MSNBC cites “Monster.com saw a 46.2% spike in contract job postings in March compared to the same month last year.”

What is driving this change? Much of it is due to the desire of most companies to lower costs. By not having to pay benefits, employers are able to save thousands of dollars per year.

Demographic factors are also at play. Baby boomers are on their way out, while younger workers are joining the workforce in large numbers. Recent trends show that the younger generation is more open to contract positions because it means they don’t have to be connected to a single company.

Joe Salvucci, President of PEAK Technical Staffing USA, feels that the shift to hiring more contractors and fewer full-time workers is here to stay. “While there will always be a need for traditional workers, contract work is becoming more and more popular,” he said. “For one thing, employers need the flexibility to staff up and down as project cycles rise and fall. For another, many aspects of staffing, such as higher hourly rates, ability to travel and flexibility to cherry-pick projects, are more attractive to the younger workforce.

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