Temporary Positions on the Rise

Last week the New York Times wrote this article on the increase in temporary hiring.  It is a very complete article.  It points to the huge percentage of newly created positions made that are temporary.  For example 80% of all of the 50,000 jobs added by private sector employers in November were temporary positions.  This is not a new trend; it is common in a recession for temporary jobs to make up the lion share of new starts.  What is different now is that temporary positions make up 25% of all new positions created in the last year.  That is more than double than the previous two recessions.

This increase is interesting in itself – and the NYTimes article points to a deep dip in business confidence as the principal cause of the high increase in temporary starts.  I agree: it is not that companies don’t want to hire, it’s more that they don’t want to fire.  Using consultants allows managers to staff up without the risk of having to lay people off 6 or 7 months into the future.

Here’s the ticket – I don’t think this is going to change when the economy gets stronger and hiring picks up.

And while I don’t expect consulting/temporary labor starts to make up 80% of new jobs, I am confident that it will make up a significant portion of jobs and that number will continue to increase.

When I was in 6th grade my Mother broke her arm very badly.  As a single parent getting me fed with a broken arm was a challenge so during that time we ate a lot of takeout food.  When my mother’s arm healed she noticed I continued to grow and prosper despite the Chinese food.  Cooking as much as she did took a big chunk of time (a very precious commodity for a single parent) and I continued to grow and be healthy.  Why not cut out the cooking?  I loved the takeout and she needed the time.

So why did it take a broken arm to show my Mom that this was a possibility? It was not until the option was forced upon her that it seemed viable.  I think that is what is going to happen with consultants/temporary hiring.  Hiring managers just did not consider using consultants for professional level positions – they hired people for that.  But now that so many managers have been using consultants I think they will continue to hedge against changes in the market, whether they are a result of a fluctuating economy or the uncertainty caused by an increasingly competitive global marketplace.

The NY Times article also noted that it is getting harder to obtain consulting assignments.  Well, perhaps my clients are being a bit pickier now that they have the perception of greater choice, but consulting assignments have been highly competitive for quite some time now.  For years we have utilized a rigorous screening process, submitted resumes to our clients’ positions and scheduled multiple interviews for each.  I have had some of my consultants interview with more than 5 managers before getting an offer for a consulting position.  The fact is that here is very little difference in the selection process with consulting positions when compared to direct hire.  It is just the perception of consulting being a lesser version permanent hiring has not yet evolved to the current reality.  Now managers are seeing this and they will want to convert a larger portion of their workforce to consulting so as to hedge for changes in the market.

What does this mean for workers?  Well, all of us have bought into the myth that there is such a thing as long term fulltime employment – the truth is that we will need to be much more flexible in how we view our careers.

More on how to manage your career in a continuously flexible labor market in a future post.

Until then be productive,

Peter Laughter

CEO Wall Street Services