About the time that the current boomer generation came into existence in the mid-1940’s, William Kelly placed his first “Kelly Girl” office temps with a client. How times have changed. By 1990 this had grown to the proportion of 1 in 13 new jobs categorized as temps and Manpower, Inc. became larger than General Electric. In 2005 the U.S. Department of Labor released a special study providing a definitive analysis of the contingent workforce and at that time 10.7% of the workforce were independent contractors, on-call workers, temporary help workers, or placements by contract firms. According to the Aberdeen Group, in 2012 there was a ratio of 1 in 4 employees classified as contingent labor and it was estimated that this number will exceed 30% in 2013. If defined in terms of traditional employment the economic downturn shows signs of entering a jobless recovery phase, however the contingent workforce is still on the rise.
There are risks for both employers and contingent employees as a result of this new workforce model. Traditionally companies have depended on contactors and temps to provide cost savings and workforce flexibility. Today there is strong pressure by regulators to insure that the most vulnerable of workers are not abused because of their status. One advocacy group, the Center for Progressive Reform, released a paper in January 2013 that showed problems in several industries with safety, low wages and health insurance issues. It is unlikely that any reform will be directed at only those few industries since there is a political climate that is favorable to strengthening overall regulation and enforcement. Compliance will continue to be at the forefront of talent management.
Workers considering employment in a contingent situation are faced with very critical and personal life altering decisions. As the contingent workforce approaches one-third of the total worker population there will be more choices and better benefits, but it will require a different mindset and a change in expectations for the long term.
- Looser commitment – How much can you really learn about a company when you interview as a full-time employee? A temporary situation may be a stepping stone to that dream job, but as a contingent worker you get to try it on before you buy it.
- More flexibility – For some people this may be the only way to build a schedule that meets with personal demands for other obligations. In fact, a part-time commitment can grow into a full-time temporary situation which may be the best of all worlds.
- Variety of work – This type of employment can expose a worker to new trends and processes that would not be available to an employee buried in the trenches. Moving from employer to employer can be a resume enhancer by giving evidence of a rich body of desirable skills.
- Networking opportunity – Contingency work is a remarkable living laboratory for exploring new personal relationships, developing long lasting professional contacts and perhaps even close friendships.
- Income while looking – Not the least of the advantages is that it is a way to make a living while involved in a lengthy job search. Money is not everything, but most people seek the comfort of knowing that they have a little more flexibility in the timing of a job search.
- Disposability – Entering the contingent relationship comes with the understanding that it will eventually end. Hopes that this will become a “permanent” job are usually based more on hopes rather than in reality. It could work out that it becomes a full time job… most do not.
- Job satisfaction – The biggest expectation of full-time employment is that it is building a career based on successive promotions to higher levels of responsibility. Each temporary situation may have its rewards, but there is little hope it will lead to anything without changing companies.
- Benefits – For most contingent workers there is a lower total compensation figure than for full-time employment. Paid time off, medical benefits and retirement may be non-existent or something less than the company benefits for regular employees.
- Professional reputation – Even though there is a trend toward a higher percentage of the workforce being in a contingent category, traditional thinking has not yet evolved to the point that it is generally acceptable to hiring managers. If job hopping is bad, this is worse.
- The blame game – The security of a contingent position is highly volatile because of evolving regulatory requirements. Through no fault of the employee, a company failing in compliance with regulations or misclassifying workers can result in termination.
In a study by AARP Family and Work Institute, it is predicted that Gen-Y workers are likely to change careers ten times before they are age 40. By contrast, previous Department of Labor estimates were that a career change of six times in a lifetime was the standard. This not only makes the contingent workforce option almost a certainty for most in that age group, it also indicates significant changes in how we view a career. Indeed, how times have changed.
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