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The Rise of the Temp Workforce

February 6th, 2017
temp word cloudA Wall Street Journal article ominously titled "The End of Employees" chronicles the rise of the contingent workforce, a workforce comprised of temporary workers, freelancers and contractors.

"Never before have American companies tried so hard to employ so few people," says the article, describing the rise of outsourcing as a trend that cuts across all industries. Google alone has some 70,000 TVCs, its abbreviation for temps, vendors and contractors. Pharmaceutical giant Pfizer used contractors to conduct the largest share of its clinical trials last year.

There are multiple reasons companies turn to temps and contractors, rather than to hiring full-time workers. Historically, the retail industry and its allied industries brought on temps to handle the rush during the holiday shopping season. Those jobs ended after each new year.

Now, companies in other industries see contingent workers as a way to control costs and free-up their permanent staff for special projects and to respond with agility to changing circumstances.

The article suggests that the workforce of some of the largest companies -- Verizon, Proctor & Gamble and Bank of America are cited -- are 20% to 50% contingent. Accenture predicts that in a decade some large company will have no permanent, full-time employees outside of the C-suite.

Getting a handle on the total number of contingent workers is not easy;  there is no reliable national count of their numbers, because they aren't easily counted. Estimates of the number of people working as contractors come in a broad range -- from 3% of the labor force to 14%. The number of those working for a staffing company are more accurate, since they fall into a category tracked by the Bureau of Labor Statistics. They account for 2% of all workers.

However, economists and analysts agree that the number of these workers is rising, and that the trend will continue and is likely to accelerate in the coming years.

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