Stagnant Job Market Leading to Increase in Temporary and Contract Positions

I just read this article on a McKinsey report stating that the job market will produce anemic results through 2018 and possibly beyond. Additionally the report states that 58% of companies surveyed state that they will increase the use of temporary or contract workers.

This is nothing surprising – I have reported several times in this Blog that in uncertain times managers increase the use of consultants, not because they don’t want to hire but because they do not want to fire. The flexibility of using consultants also gives a low cost solution to increasing productivity without adding to fixed cost.

What piqued my interest in reading this article was not that temporary and consulting positions are on the rise; but rather, what the implications are for the workforce and our society in a world where a growing number of people are working as consultants. Here are a few things to consider:

  • Health Care – Having healthcare benefits that are tied to a specific job is unfeasible for those working as a consultant. Portability of healthcare benefits is critical in giving people the flexibility to work on several assignments throughout any given year.
  • Acceptance of candidates with consulting backgrounds – If I had a nickel for every time a client said “No jumpy resumes!” And I get it – candidates with a history of not keeping a job are likely to repeat that behavior. Yet managers will need to distinguish between candidates who have worked as consultants and those who have not been able to hold down a permanent job. In an economy where there is less direct hire activity there will be more candidates with several consulting positions on their resumes and these candidates should not be thought less of.
  • A culture of savings – Time between assignments is a factor when working as a consultant, so saving for that inevitability is critical. We as a nation do not have a culture of savings and that is something that will need to change in a world where more people work on consulting projects.

With the use of consulting it is easier for managers to start and end projects and this activity will have a marked improvement on our economy. Trying new things is the way out of any problem and if we give organizations the ability to do just that with regard to their human capital firms, we will identify ways to better capitalize on the significant challenges facing our economy. We have some work to do to pave the way for that opportunity.

Peter Laughter
Wall Street Services