Workforce Demographic Trend: Temporary and Contract Employees Growing as Need for Flexibility Rises

The rise of temporary workers is a workforce trend that’s here to stay. According to the U.S. Bureau of Labor Statistics, temporary workers make up 19% of all new jobs in the U.S,  almost beating out a record high from April 2000. A blog post by NextSpace cites an even larger number, 30%, which includes temporary, contract and self-employed workers. Sara Horowitz, Founder of The Freelancers Union and author of The Freelancer’s Bible also backs this statistic up, stating on her site that 1 in 3 workers are freelancers.

The Increasing Loss of Permanent Positions

So what’s causing this trend?

1. Employers are reluctant to hire in case there is another economic downturn,
2. Increased demand in certain markets,
3. New health-care requirements for employers of full-time workers,
4. A generation that is more geographically and technologically mobile, and
5. A generation of workers that value flexibility and project-based work.

It’s a number that’s continuing to grow. Across industries, companies are hiring more temporary staff, filling both blue collar and information technology-related jobs. By 2020, more than 40 percent of the US workforce will be so-called contingent workers, according to a  2010 Future of Small Business study conducted by software company Intuit. This trend transcends the employment rate, shown in a recent Bloomberg article that cites staffing industry stocks experiencing some of the highest recent gains. The bottom line is that companies must act fast to meet demand and compete in our globalized marketplace. In this type of scenario, niche, project skills are more necessary than ever.

How Organizations Can Prepare for Rise of Temporary Workers

As a leader, how do you handle the constant turnaround of employees? What does it do to your organizational culture and the morale of other full-time employees? Do the results of these specialized projects, which require temps, produce the same type of results as permanent staff?

As you ready your organization to greet these temporary workers, it’s imperative that your projects and expectations are clearly defined. Although it’s easy to just have people come in and finish the job quickly, if the job is not done well within your brand, who really wins? We are all looking for quick fixes; a New York Times article cites the origin and purpose of temp work as “a lean and mean approach to business that considered workers to be burdensome costs that should be minimized.” I disagree and urge organizations to always take a long-term, strategic look at their hiring policies to prepare for the workforce of tomorrow.

How Employees Adapt to Temping

Temping has always had a negative association; in the past, it meant you couldn’t find a job. But now, it’s become normative. Freelancers and temps get paid more than they would at a permanent job, and thanks to staffing companies, are able to find regular work. Take for example, The Hired Guns, which act as a type of talent agency for digital workers. Just as an actor or model has an agent, so do freelancers and temp workers.

Many employees embrace this type of mobility as the idea of what work really means to them has evolved with different generations. They enjoy the flexibility and freedoms that come with working on different projects in different locations. Of course there are employee downsides, such as the loss of benefits, health insurance and a greater need for financial advice as they manage different incomes.

In 2010, NPR issued a call to temps on their Facebook page, looking to interview temporary employees, discover the challenges faced and understand why these people preferred temporary jobs. The personal stories seemed to match much of the data. One entrepreneur, Carla, chose to temp while she worked on pursuing her passion.

Christa Hanson explained, “[I was] thrust into freelance not by choice (corporate layoffs), after an adjustment period getting accustomed to the uncertainty of work and inconsistent pay, I’ve come to treasure the freedoms. I can pick my projects and clients, collaborate with fellow freelancers, serve on a board, attend networking lunches, and work in all odd hours! While the idea of a regular paycheck is nice, and I do miss my team, almost nothing else that goes with a regular day job holds any appeal. I could never have chosen this work lifestyle on my own, so I’m quite glad it has discovered me.”

As temping becomes an even larger trend, perhaps Christa is on to something. An informal or formal freelance/temp network within a specific industry, city or organization may help fill the long-term relationships that some temps may feel are missing. This network of coworking spaces may be the next workforce trend that leaders need to follow.

Where is your talent coming from? I want to hear from you! Organizations who hire temps or from staffing agencies: how does this trend affect your workforce and your workplace culture?  Temps: how do you feel about these positions? Would you rather have a permanent job?  Leave me a comment below, send me a tweet or reach me by email.

Don’t forget, workforce flexibility isn’t all that is headed our way. Be sure to read up on other workforce trends on my blog, including Baby Boomer retirement, women leaving the corporate world and becoming competition and the rise of the new majority. For facts and figures, see these infographics about the rise of women in the workforce and demographic changes in relation to business and education trends.