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DCR TrendLine March 2014 - Temporary Workforce Insight

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This month’s edition highlights what’s hot for talent acquisition and lists the fastest growing jobs in the country and where they can be found. We also continue this theme of growth by examining the …

This month’s edition highlights what’s hot for talent acquisition and lists the fastest growing jobs in the country and where they can be found. We also continue this theme of growth by examining the emerging trends driving the increasing use of contingent workforces, particularly in the healthcare industry. And as a continuation of our monthly special feature on the BRIC countries, we turn our gaze to the Sochi Winter Olympics to discover how workers were staffed.

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  • 1. NOTE FROM THE EDITOR The staff at TrendLine is really excited to unveil our new look and feel to our readers! After over 18 months of publication, we thought that TrendLine could use a revamp! Our new design makes it easier for you to pinpoint the pivotal trends in the temporary staffing industry, while still maintaining the same caliber of depth and analysis that TrendLine is known for. As always, our articles this month deliver key insights and actionable information on contingent workforce supply and demand. The DCR National Temp Wage Index focuses on temporary worker wage trends over the year, analyzing the usage of contingent workers and tracking related developments in the economy. This month, we examine global contingent worker spend, and the recent executive order to increase wages for federal contractors. The next few articles explore developments in the sourcing marketplace, by looking at what’s hot for talent acquisition in 2014. The first of these articles examines the key trends for talent acquisition for both permanent and temporary workforces. We then look at the top ten fastest growing jobs over the next decade. You might be surprised by the industry that dominates the list. Finally, we pinpoint the metro areas and cities that are experiencing the fastest growth this year. “ 2013 was a great year for contract staffing as more and more companies turned to temporary workers to support their demands for skill and talent. Our research indicates that 2014 is going to be the same and better! Our article on the continuing growth of contingent staffing examines the evidence behind this prediction and the emerging trends in driving the use of contingent workforces. Keep an eye out for the study on the VMS and MSP competitive scene in the United States. Everyone’s been talking about the Affordable Care Act (ACA) and the impact it will have on the economy. Our latest article on this topic focuses on the estimated demand and supply of healthcare workers, along with the legislation, to examine the opportunities for those in the healthcare industry. Over the last couple of months, we’ve been taking glances at the BRIC countries, focusing on Brazil in January and China in February. This month, with the world looking at Russia for the 2014 Winter Olympic Games, we study the hidden competitors behind this major event – Russia’s temporary workers. Over 150,000 workers, both permanent and temporary, were recruited for this one event; in this article, we look at the country’s economics, employment, and temp worker utilization to see how workers were staffed for the Olympics. The TrendLine team would like encourage you to send us your thoughts on our new design and layout. And we, as always, are eager to receive your questions and suggestions on topics that you would like us to investigate further. Happy Reading! Ammu Warrier Ammu Warrier, President INSIDE THIS ISSUE Note from the Editor.....................................................................................................................page 1 DCR National Temp Wage Index...............................................................................................page 2 Talent Acquisition Trends for 2014 .........................................................................................page 4 Top Ten Fastest Growing Jobs....................................................................................................page 7 ACA: Paving the Path of Opportunity.......................................................................................page 8 America’s Twenty Fastest Growing Metro Areas .................................................................page10 Contingent Staffing Growth Continues..................................................................................page 11 The Winter Olympics’ Unseen Contestants: Russia’s Temp Workers...........................page 13 Methodology...................................................................................................................................page 18 “The outlook for growth in the U.S. economy over the next three years looks stronger than that of three months ago.” ~First Quarter 2014 Survey of Professional Forecasters by Federal Reserve Bank of Philadelphia 1
  • 2. DCR NATIONAL TEMP WAGE INDEX “ The cold weather throughout the United States had an impact on the job numbers again, as employers added 175,000 new private jobs in January, below the expected 189,000, according to the ADP national employment report. The latest numbers from the Labor Department also concur that job growth was less than expected. The Bureau of Labor Services (BLS) Jobs Report stated that 113,000 jobs were added last month. However, the country’s unemployment rate slipped to 6.6 percent in January from 6.7 percent in a previous month, hitting a five-year low. However, the drop in unemployment this month is not due to people opting out of the workforce; the labor force participation rate rose this month to 63 percent. The construction industry saw a drop of 22,000 jobs, while federal jobs lost 12,000 positions with the postal service accounting for 9,000. The biggest gains were in professional and business services (36,000 jobs added) and leisure and hospitality (24,000 jobs added). Online job ads fell in January by 56,800 for a total of 5.2 million. According to June Shelp, Vice-President at The Conference Board, “employers still seem hesitant to expand their workforce.” However a survey by the SurePayroll Small Business Scorecard found that half of small businesses in the U.S. expect to hire for new positions in 2014. “Cold and stormy winter weather continued to weigh on the job numbers. Underlying job growth, abstracting from the weather, remains sturdy. Gains are broad based across industries and company sizes, the biggest exception being manufacturing, which shed jobs, but that is not expected to continue.” ~Marc Zandi, Chief Economist at Moody’s Analytics “It looks to me like a pause. We need two, three, four more months of weak numbers before we say there’s any real problem.” ~Robert Shapiro, Chairman of Sonecon and former top official at the Commerce Department 2
  • 3. DCR NATIONAL TEMP WAGE INDEX GLOBAL CONTINGENT WORKER SPEND Global spend on contingent labor was $2.5 trillion in 2012, according to estimates by Staffing Industry Analysts. Independent contractors had the highest spend at $1.5 trillion. WAGE INCREASE FOR FEDERAL CONTRACTORS On February 12th, 2014, U.S. President Barack Obama signed an executive order to increase minimum wages for federal contract workers to $10.10 per hour starting in 2015. The current rate is $7.25 an hour. This order applies to new contracts and replacements for expiring contracts. The President also urged employers nationwide to increase wages for their workers. The White House says that this move will benefit hundreds of thousands of people working under contracts with the federal government. A report by the nonpartisan Congressional Budget Office says that raising the federal minimum wage would cause the loss of approximately 500,000 jobs but would boost earnings for about 16.5 million low-wage workers. However, the report does acknowledge that long-term conclusions on the effect of the minimum wage are difficult to predict. Stay posted for a more in-depth analysis of this topic in the April edition of TrendLine! “ Source: Staffing Industry Analysts “Increasing the minimum wage would have two principal effects on low-wage workers. Most of them would receive higher pay that would increase their family’s income, and some of those families would see their income rise above the federal poverty threshold. But some jobs for low-wage workers would probably be eliminated, the income of most workers who become jobless would fall substantially, and the share of low-wage workers who were employed would probably fall slightly” ~ Congressional Budget Office 3
  • 4. TALENT ACQUISITION TRENDS FOR 2014 LinkedIn recently released the results of their 3rd Annual Global Recruiting Trends survey, which asked 3,300 talent acquisition leaders to share their thoughts on hiring and budget trends. Five key trends regarding the future of talent acquisition emerged: 1) Social professional networks are fastest growing source of quality hires 2) A strong employer brand has a significant impact on the ability to attract talent 3) Data is being used to make better hiring decisions 4) Companies are investing in hiring internally to boost retention of top talent 5) Companies are actively looking into mobile recruiting “ For talent leaders, the main focus in 2014 is to improve the fundamentals of recruiting. Top priorities include sourcing, the talent pipeline, and improving quality of hires. A deeper examination in the same study surveyed 1,500 recruitment firms to identify trends in the U.S. recruitment firm landscape. Three further trends emerged: 1) The recruitment market is booming 2) Companies need to close the passive talent skill gap to be competitive 3) Context and content in marketing is very important U.S. hiring growth is far outpacing global growth, for both full-time positions and temporary workers. “American business must continue the work of the last 10 years in finding better ways to diversify talent and use it more flexibly. So much talent in our country remains untapped because we have not found enough innovative ways to effectively use those who want to work part time or work non-standard hours.” ~Bob Mortiz, U.S. Chairman and Senior Partner of PwC 4
  • 5. TALENT ACQUISITION TRENDS FOR 2014 Source: LinkedIn 2013 Global Recruiting Trends While hiring volume has grown in 2013, recruitment budgets have not kept up, requiring firms to do more with less money. Additionally, competition is fierce in the recruitment market, with 65% of survey respondents citing availability of quality talent as their key obstacle for talent acquisition. Recruiters, both in the U.S. and globally, say that social professional networks are their number one source for quality hires, followed by internal candidate databases and applicant tracking systems. They also view social and professional networks as the top long-lasting trend in talent acquisition. 5
  • 6. “ TALENT ACQUISITION TRENDS FOR 2014 BRIDGING TALENT TENSIONS McKinsey & Company pointed out that we would require 16 million to 18 million more college-educated workers than would be available in 2020. Bridging this gap would require increasing young people’s rate of graduation by 2.5 times the historical rate of increase, while also raising the participation rate of college-educated women and older workers at more than twice the historical rate of increase. The widening skills gap brings to light a mismatch between the demand for skills and the supply of workers who have them, thus prompting managers to rethink how they manage talent. As the demand of jobs has shifted from an industrial economy to a digital economy, new models are emerging to fill the talent gaps. Firms need to adapt and acquire new skills to stay competitive, and talent has become central, at the level of marketing or finance, to corporate strategy. As work is increasingly becoming project based, the short-term demand for non-core skills is increasing, and employers are looking to build their own network of freelancers and contract workers on an as-needed basis. “The search industry has been forced to evolve. It’s no longer simply about finding people. The organizations that embrace talent as a strategic investment – that means acquisition, development and retention – are going to win going forward.” ~Tierney Remick, President of Consumer Marketing Practice at Korn Ferry. 6
  • 7. TOP TEN FASTEST GROWING JOBS The Bureau of Labor Statistics recently released their predictions of what will be the fastest growing jobs over the next decade. Overall expectations call for 15.63 million jobs to be created. Coming in at number one, with a median pay of $83,580 annually and a growth rate of 53% is industrial-organizational psychologists. Median Pay Growth Rate 53% Industrial-Organizational Psychologists $83,580 2 Personal Care Aides $19,901 3 Home Health Aides $20,820 4 Insulation Workers, Mechanical $39,170 5 Interpreters & Translators $45,430 6 Diagnostic Medical Sonographers $65,860 7 Helpers – Brickmasons, Blockmasons, Stonemasons and Tile and Marble Setters $28,220 8 Occupational Therapy Assistants $53,240 9 Genetic Counselors $56,800 10 Physical Therapist Assistants $52,160 The expected growth in the healthcare sector, which is reflected in the number of healthcare positions on this list, is driven by the retirement of baby boomers and the recent passage of the Patient Protection and Affordable Care Act. The individual mandate that requires citizens to purchase health insurance will probably lead to more preventative visits, driving a greater demand for health services and health service professionals. Another sector seeing growth is construction, where the expanding U.S. population will drive a higher demand for housing, creating opportunities for specialization within the industry. The 2014 Dodge Construction Outlook, a principal report for forecasting and business planning in the industry, predicts that U.S. construction starts will rise 9 percent this year. Single-family housing is expected to grow 26 percent, driven by the slower pace of foreclosures, rising home prices, and low mortgage rates. Similarly, commercial building will increase 17 percent, with warehouses and hotels leading the way. Public works construction will drop 5 percent as focus on deficit reductions limits federal support. Additionally, in its prediction of occupation levels, BLS ranks construction in third place for the quickest growth over the next ten years. “ 1 49% 48% 47% 46% 46% 43% 43% 41% 41% “The 2014 picture bears some similarity to what’s taking place during 2013, with single family housing providing much of the upward push.” ~Robert Murray, Vice President of Economic Affairs at McGraw Hill Construction 7
  • 8. ACA: PAVING THE PATH OF OPPORTUNITY Due to the Affordable Care Act (ACA), the U.S. Congressional Budget Office forecasts that 30 million non-elderly Americans will gain insurance over 2013 to 2017. Additionally, according to the U.S. Census Bureau, elderly Americans, who consume more healthcare, are expected to comprise 21 percent of the U.S. population by 2035. Long-term trends point to a growing shortage of nurses, regardless of recent increases in nursing school graduates. Furthermore, the Association of American Medical Colleges forecasts a shortage of 130,600 physicians, accounting for 14 percent of demand, by 2025. Healthcare occupies 17 percent of the U.S. GDP and the surge in demand is expected to result in an increase to 18.4 percent of GDP in the next three years. PROSPECTS FOR HEALTHCARE STAFFING As of 2012, healthcare staffing had a 10 percent share of total temporary staffing. According to Staffing Industry Analysts, the U.S. healthcare staffing market will grow by 6.5 percent in 2014 to $10.5 billion, showing an increase from the 4 percent growth in 2013. The largest sub-segments for growth in 2014 will be travel nursing at 8 percent, per diem nursing at 7 percent, and locum tenens at 8 percent. Allied health staffing is projected to grow by 5 percent. Many view the U.S. healthcare delivery system as fragmented, where multiple people provide health care independently without coordination or communication, and no single entity or set of policies is there to guide. Numerous experts attribute this fragmentation and resulting inefficiency of the healthcare system to the fee-for-service model, which is the current dominant payment model, as it promotes quantity over quality. There is a drive to transform from this volume-based payment model to a value-based model. Temporary staffing agencies have traditionally benefited from models that reward volume. Healthcare Staffing versus Total Employment Growth, Year-over-Year 8
  • 9. ACA: PAVING THE PATH OF OPPORTUNITY Results from the 2012 Contingent Buyer Survey for North America indicate that 63 percent of contingent workers in the healthcare industry are hired because permanent workers were not available, compared to 28 percent in other industries. A shortage-driven labor market benefits staffing firms for multiple reasons. Hiring organizations are willing to innovate as they are forced to engage talent on more varied terms, including part-time, contract, and temporary workers. Also to fulfill their talent needs, employers turn to experts such as staffing firms to supplement sourcing methods by providing workers, thus outsourcing their recruitment process in whole or in part. Finally, in large, unionized professions, such as nursing, hiring temporary workers, even at a higher compensation, avoids pressure to increase compensation for existing employees. Healthcare Temporary Staffing Market Size & Growth Rate MARKET STATUS While total employment in the U.S. increased by 4 percent over the past decade, employment in ambulatory (outpatient) health services grew 36.6 percent, employment in hospital settings increased by 13.6 percent, and nursing and residential care facilities employments increased by 15.4 percent. In 2012, a total of 14 million people were employed in the healthcare industry in the U.S. Hospitals employed 35 percent of the total, nursing and residential facilities employed 23 percent, and various ambulatory settings employed the remaining 42 percent. Employment in the Healthcare Industry 9
  • 10. AMERICA’S TWENTY FASTEST GROWING METRO AREAS Forbes recently examined data from Moody’s Analytics, Payscale.com, and BLS to assess population growth, economic growth rate, unemployment data, and median salaries, in order to develop a list of the twenty fastest growing metro areas in the United States in terms of population and economy. Both Florida and Texas had the most cities on the list with four each. Austin, Texas claimed the top spot for the fourth year in a row, with a 2.5 percent population growth rate and an economy that expanded 5.88 percent last year. The city has around 4,000 technology companies that represent 35 percent of the area’s total payroll, and companies such as Dropbox are bringing in jobs this year. In the last nine years, 307 companies moved to the region. “The competition for jobs is fierce. We can’t let our guard down.” ~Dave Porter, Senior Vice President, Economic Development at the Austin Chamber. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Austin, Texas Raleigh, North Carolina Phoenix, Arizona Dallas, Texas Salt Lake City, Utah Denver, Colorado Ogden, Utah Charlotte, North Carolina Orlando, Florida Houston, Texas Seattle, Washington Atlanta, Georgia Provo, Utah Cape Coral, Florida Palm Bay, Florida Boise, Idaho Minneapolis, Minnesota North Port, Florida San Jose, California San Antonio, Texas Median Pay $64,000 $64,800 $64,200 $66,700 $62,200 $64,900 $56,000 $61,900 $55,700 $72,100 $71,400 $62,500 $55,400 $52,100 $63,300 $55,300 $63,400 $51,400 $100,500 $58,300 2013 Growth Rate 2.5% 2.15% 1.67% 1.91% 1.33% 1.75% 2.05% 1.92% 1.82% 1.82% 1.1% 1.27% 2.48% 2.41% 1.53% 1.66% 1.01% 1.42% 0.51% 1.83% Unemployment Rate 4.89% 5.69% 6.40% 5.83% 4.00% 5.95% 4.03% 6.96% 5.76% 5.75% 5.78% 7.07% 4.04% 6.22% 6.60% 5.39% 4.37% 6.00% 6.26% 5.72% 10
  • 11. CONTINGENT STAFFING GROWTH CONTINUES 2013 was a record-breaking year for contract staffing as employers increasingly turned to temporary workers to support their workforces. With 2.7 million active contractors in June 2013, contingent staffing reached its highest point since 2006. Recent statistics show that staffing was strong in healthcare, business professionals and support staff, and engineering and manufacturing. This growth is expected to continue in 2014. A recent CareerBuilder survey revealed that 42 percent of companies plan to hire temporary workers in 2014, while only 24 percent planned on direct hiring. Temporary help employment numbers from BLS continue to rise, corroborating the growing use of contingent workers. Temporary employment increased by 40,000 jobs in December 2013 from the previous month, accounting for 9.6 percent growth from the previous year. The percent of total U.S. workers sourced via staffing firms also hit an all-time high of 2.06 percent in December 2013. And it just accounts for contingent workers engaged through staffing firm relationships, not those outside of it such as independent contractors. In 2012, the contingent workforce at an average large company comprised of 16 percent of the overall workforce. The growth in vendor management systems (VMS) and managed service provider (MSP) usage and spend also indicates increased managerial attention to this workforce population. Staffing Industry Analysts surveys show that 73 percent of large companies use a VMS while 57 percent have an MSP in place. The State of Contingent Workforce Management research study by Ardent Partners predicts that the average contingent workforce will grow by almost 30 percent over the next three years. It is expected that the composition of the contingent workforce will blur talent lines, including SOW-based labor, traditional temporary labor, independent contractors, and professional and non-professional services. New categories such as enterprise-workforce-as-a-service and online labor marketplaces will continue to evolve and grow in popularity. A new report by Staffing Industry Analysts on long-term U.S. staffing industry forecasts projects that temporary help services employment will grow to 3,387,000 jobs by 2022, a compound annual growth rate (CAGR) of 3.1 percent. The annual revenue growth projection for the temporary staffing market is higher at 4.6 percent CAGR to reach $155.8 billion in 2022, with drivers of growth being inflation, growth in total employment, a growing number of higher-paying professional jobs, and deeper adoption of temp workers in multiple markets. The largest growth is expected in healthcare staffing and information technology staffing, both forecasted to expand by 5.6% CAGR Additionally, online staffing, currently at about $1 billion globally, continues to grow. While its market share is small now, at less than 1 percent of the temp market, it is projected to grow to $15 to $20 billion by 2020. 11
  • 12. CONTINGENT STAFFING GROWTH CONTINUES THE VMS AND MSP COMPETITIVE SCENE A recent study by Staffing Industry Analysts’ CWS Council looked closely at the competitive landscape of VMS and MSP providers. The data revealed that the preferred primary model for managing contingent workforce programs is the use of Managed Services Providers (MSPs), even if in conjunction with a VMS. Models to Manage Contingent Workforce Programs Source: Staffing Industry Analysts The study also broke down the usage of each model by industry or major skill. The highest usage of MSPs was in Pharma/Biotech/Med and the highest usage of external VMS was in Engineering/Design. Primary Model Used, by Industry Global VMS spend by work arrangement was also analyzed, where temp/contract saw a growth of 18% from 2011 to 2012, while SOW grew 21% and outsourced services experienced a 4% growth rate. 12
  • 13. THE WINTER OLYMPICS’ UNSEEN CONTESTANTS: RUSSIA’S TEMP WORKERS For the past month, all eyes have been on Russia as some of the world’s best athletes compete in the XXII Olympic Winter Games. At the torch lighting in Sochi’s Olympic stadium, three years of hard work by workforce companies and contract workers was finally seen. Adecco Group Russia Company and Kelly Services, along with Russian company Exect Business Training, were jointly responsible for the recruitment and staffing services for the event. The official suppliers of the games were asked to source 150,000 workers - both permanent and temporary - along with more than 25,000 volunteers. These workers were employed in over 30 fields including sports, medical care, education, transport, hospitality, and more. The entire workforce was expected to be given training in the English language and in cross-cultural collaboration. To meet this volume of demand, various hurdles posed by the economics in the country, and labor laws regarding contingent workforce, needed to be overcome. At the Opening Ceremony of the Olympics, the world saw the gleaming new sports arenas, the web of highways, and the infrastructure upgrade of the region. The workers were in place and the job was done, however the conditions to which they were subjected were poor at best, bringing to light the issues that many staffing agencies deal with daily. “ Adecco Group Russia Company provided temporary staff recruiting services, Exect Business Training was responsible for staff training, and Kelly Services handled permanent staff recruitment, as well as the establishment and management of the Sochi 2014 Career Center. The Career Center is an innovative online forum and recruitment program to select and train 65,000 experts. “Olympic Games are all about the teamwork that puts it together, and that’s why we are welcoming three biggest players of the recruitment and training services market on board the Russia’s Olympic project. These are companies that possess international expertise and experience in the Russian market.” ~Dmitry Chernyshenko, President of the Sochi 2014 Organising Committee 13
  • 14. “ “ THE WINTER OLYMPICS’ UNSEEN CONTESTANTS: RUSSIA’S TEMP WORKERS RUSSIAN ECONOMY SNAPSHOT The International Monetary Fund and World Bank label the Russian economy as a developing one. With a population of 141.9 million, the country has a GDP of $2.5 trillion with a 1.8 percent 5-year compound annual growth. In 2012, while the Eurozone was in a recession, the Russian economy remained strong. In 2013, the growth outlook was positive but far below the GDP growth in 2012. The World Bank projects a positive growth of 3.1 percent for the country in 2014. Hosting the Winter Olympics was originally expected to give the Russian economy a boost, but the costs associated, more than $50 billion, will make this unlikely. “The Russian economy is at a crossroads. It has tremendous potential but is still heavily reliant on volatile revenues from natural resources. It would do well to invest more in infrastructure, human capital and innovation, so that larger segments of society can partake in Russia’s transformation.” ~Angel GurrÍa, OECD Secretary-General “While the central government can comfortably accommodate its share of the cost, the reputational benefits of hosting the Olympics have been undercut by the high cost of the event and other bad publicity.” ~Moody’s Analytics EMPLOYMENT IN THE RUSSIAN FEDERATION Employment in Russia, 2000 to 2013 14
  • 15. THE WINTER OLYMPICS’ UNSEEN CONTESTANTS: RUSSIA’S TEMP WORKERS Russia is a very large country, consisting for 83 federal districts. Each district has its own history, resources, economy, and unemployment rate. The unemployment rates in the federal districts are highly differentiated, varying by four times among the districts and up to 49 times among individual regions. The lowest unemployment rate is in the Central Federal District at 3.3 percent, and the highest is in the North Caucasus Federal District at 13.7 percent. The overall unemployment rate in Russia in January 2014 was 5.6 percent. The number of unemployed people remained steady at 4.18 million. A recent report by the American Enterprise Institute highlights the decline of the Russian population over the last 20 years, and the compounding of this demographic shift in the mismatch between the skills the country’s education system offers and what is required by the domestic labor market. “ Employment Percentage, by Sector “They need workers from outside Russia in the construction and agricultural industries, among others. Pathways to legalization, and the creation of urban infrastructure to accommodate migrant populations (both legal and illegal) are Russia’s major challenges.” ~ ”Addressing Russia’s Mounting Human Resource Crisis”, American Enterprise Institute 15
  • 16. THE WINTER OLYMPICS’ UNSEEN CONTESTANTS: RUSSIA’S TEMP WORKERS RUSSIAN TEMPORARY WORKFORCE MARKET Following the global trend, temporary staffing is having a greater impact on the Russian labor market. Currently, the only way for Russian companies to source temporary workers under Russian law is by completing “service agreements” with recruiting companies. Under these agreements, the recruiting company has to provide certain services to a client and assign certain workers to that client. There is much ambiguity for the engaged contractors, service agencies and client companies under the Labor Code. Russian employers consider temporary staffing to be advantageous with the key benefit being flexibility. Workers, especially young workers (about 69 percent of Russian contractors are young), prefer the freedom and flexibility that temp work offers, along with the wide range of access to industries, companies, roles, and opportunities. In 2011, Staffing Industry Analysts estimated that the Russian staffing market was worth approximately €1 billion. A black market comprised of small operators who pay workers in cash to avoid taxes and social charges, adds another 30 to 40 percent to that number. Many large companies do make use of these illegal staffing providers, prompting Russian trade unions to oppose temporary staffing. Over the last twenty years, the share of temporary employment has increased dramatically from 2.5 percent in 1992 to about 12 percent in 2007. In 2012, more than 8 million people were working on a temporary basis in the country. There is also a large migrant population in Russia working on a short-term temporary basis. The Russian Federal Migration Service estimates that the number of people staying temporary in the Russian territory and who are employed for at least six months is 1.2 million. Non-Standard Labor Contracts 2009 vs. 2010, % According to the Survey of Russian Enterprises (RES), about two-fifth of Russian enterprises used non standard labor contracts in 2009 and 2010. Fixed-term contracts are signed by companies and workers for a specified period of time, and agency work contracts are signed by a company and an employment agency. 16
  • 17. THE WINTER OLYMPICS’ UNSEEN CONTESTANTS: RUSSIA’S TEMP WORKERS HOW OLYMPIC WORKERS WERE STAFFED In order to overcome the hurdles presented by Russia’s economy, geography, labor laws, and temporary workforce market, along with issues of cost, availability of skill, and time, the official staffing agencies turned to outsource much of the recruiting process to various employment agencies within both Russian and neighboring countries. In September 2013, Adecco Group Russia Company was finding it difficult to recruit the volume of people with specialized skills needed, including more than 1,000 workers in logistics and 5,000 in transport. On Adecco’s website, candidates were guaranteed decent wages, housing in Sochi for three to seven months, and partial compensation for travel. “ Many of the workers engaged for the Sochi Winter Olympics came for neighboring foreign countries such as Servia and Bosnia. The draw was the prospects of earning more in wages, where two months of work would result more than most residents of these countries make in a year. Temporary housing was provided for these workers. Thousands of migrant workers were recruited from ex-Soviet Central Asia and the Baltics to work on the $50 billion construction project. However, many of these workers faced challenges. Hundreds have complained about lack of pay, excessive hours, overcrowded housing, inadequate food, unlawful detentions, and deportations. Sourced workers, often brought in by middleman employment agencies, were put on site to work without proper contracts and visas, resulting in over 100 workers being detained by Russian police for working illegally. Russian officials began to enforce immigration law and targeted hundreds of Sochi workers. Russian and Olympic officials have acknowledged the existence of wage irregularities, though they claim these have been resolved. Investigations into workers’ rights volitions found that about seven firms owed their workers over $8 million in unpaid wages. Thomas Back, the president of the International Olympic Committee, says “as a result of this, 227 million roubles have been paid to workers in compensation to address this issue.” For those in the contingent workforce business, these incidents continue to foster the debate on the risk and cost of the decision to either outsource or direct source. While the official staffing companies for the Sochi 2014 Winter Olympics fulfilled their obligations to provide a pool of talented workers, the overall results were far from ideal. “Candidates in Sochi cannot meet all of the needs of the staff for the Games, so we are selecting candidates from across the country; especially in the nearby regions of Krasnodar, Rostov, Volgograd, and Samara. In the run-up of the Games, the most extensive work will be done in the field of building temporary structures, catering, maintenance, IT support, and accommodation arrangements. Huge numbers of freight deliveries of equipment and materials are also planned. “ ~Adecco spokesperson. Singulyarra / Shutterstock.com 17
  • 18. METHODOLOGY The DCR Wage Index is developed to assess the relative movements of temporary wage rates in the U.S. economy. The wage rates for temporary workers or contingent workforce are based on payments made by staffing firms to these workers based upon hours worked. Data collected from sources such as Bureau of Labor Standards (BLS) and other government sites as well as an internal pool of staffing companies and consultants, is aggregated and classified based on regions and skill categories, to arrive at an aggregate index. The baseline for the index is set at 100 for January 2007. Index value for a particular month indicates relative wages with the said baseline and is representative in terms of direction and scale of change. Five years of data has been included to observe seasonal patterns and distinguish seasonality from long-term wage movements. The data and the model has been further refined over last six months. DCR Wage Index combines the exhaustive data from BLS with practical and more recent developments and data from on-field consultants and clients, to provide timely near-term indications of trends and consistent long-term actionable and objective information. SOURCE DATA DCR Work Index uses multiple economic variables to ensure the robustness of its forecasts and cross-validation of trends. Key data sources and parameters of interest included and influencing the index are: Unemployment data Gross Domestic Product Prime rate of interest New and seasonal Job openings Non Form employment Job Opening All Export All Import Average Hourly Earnings of All Employees Total Private Aggregate consultant data on job market parameters 18
  • 19. REFERENCES http://www.nbcnews.com/business/economy/economy-added-175-000-jobs-january-n22636 http://www.staffingindustry.com/Research-Publications/Daily-News/Online-job-ads-fall-in-January-slower-growth-seen-28894 http://www.staffingindustry.com/Research-Publications/Daily-News/Half-of-small-businesses-plan-new-jobs-in-2014-but-January-hiring-slips-28844 http://www.payscale.com/career-news/2014/02/bls-jobs-report-economy-adds-just-113-000-jobs-unemployment-dips-to-6.6-percent http://www.staffingindustry.com/site_member/Research-Publications/Publications/CWS-3.0/January-22-2014/Global-CW-Spend http://www.slideshare.net/linkedin-talent-solutions/serach-and-staffing-firm-trends-2013-united-states http://www.slideshare.net/linkedin-talent-solutions/global-recruitment-trends-panel-talent-connect-vegas-2013 http://www.bls.gov/emp/ep_table_103.htm http://www.bls.gov/news.release/empsit.htm http://www.thestaffingstream.com/2014/01/27/contract-staffing-growth-in-2013-paves-way-for-strong-2014/ http://cporising.com/2014/01/15/2014-the-year-ahead-in-contingent-workforce-management-part-i/ http://www.digitaltonto.com/2014/the-new-era-of-talent/ http://www.mckinsey.com/insights/economic_studies/talent_tensions_ahead_a_ceo_briefing http://www.staffingindustry.com/site_member/Research-Publications/Publications/CWS-3.0/January-22-2014/CW-Growth-2014 http://www.staffingindustry.com/site_member/Conferences-Webinars/Webinars/North-American-Buyer-Webinars/Archived-Webinars/VMS-MSPLandscape-A-Comprehensive-Review-of-2013-December-2013 http://www.staffingindustry.com/Research-Publications/Research-Topics/Region-North-America/2014-Healthcare-Staffing-Assessment http://www.huffingtonpost.com/bob-moritz/americas-talent-gap_b_2080162.html http://www.latimes.com/business/la-fi-minimum-wage-20140219,0,872599.story#axzz2tg8rJBRz http://www.hcamag.com/hr-news/lighter-side-staffing-sochi-183806.aspx http://www.worldbank.org/en/country/russia/overview http://www.tradingeconomics.com/russia/unemployment-rate http://www.gks.ru/bgd/regl/b13_12/IssWWW.exe/stg/d01/6-04.htm http://www.themoscowtimes.com/business/business_for_business/article/contingent-workforce-in-russia-legislative-challenge-or-a-promising-opportunity/475348.html http://www.staffingindustry.com/eng/Research-Publications/Publications/CWS-3.0/Archive/2012/March-21-2012/Strikes-over-Contingents http://eaces.liuc.it/18242979201202/182429792012090205.pdf http://ftp.iza.org/pp54.pdf http://www.sochi2014.com/en/news-hr-industry-leaders-to-handle-recruitment-and-staffing-services-for-sochi-2014-games http://www.voanews.com/content/reu-olympic-games-unlikely-to-boost-russian-economy/1844858.html http://www.phil.frb.org/research-and-data/real-time-center/survey-of-professional-forecasters/2014/survq114.cfm http://construction.com/about-us/press/housing-leads-construction-industry-to-moderate-growth-in-2014.asp http://www.reuters.com/article/2014/02/05/us-olympics-migrants-idUSBREA140HW20140205 http://www.msnbc.com/msnbc/the-human-cost-sochi http://cwsolutions.ca/cws2/for-sochis-staffing-agencies-a-trip-to-the-podium-is-paved-with-baited-breath/ http://www.sportspromedia.com/news/suppliers_announced_for_sochi_2014/ http://voiceofrussia.com/news/2013_08_20/Sochi-2014-Organizing-Committee-continues-to-search-for-specialists-9867/ http://www.staffingindustry.com/row/Research-Publications/Daily-News/Russia-Winter-Olympics-boosting-temporary-recruitment-26865 http://thebricspost.com/brazil-russia-china-growing-around-trend-oecd/#.UwduoWRDvVd http://www.staffingindustry.com/row/Research-Publications/Daily-News/Russia-Education-must-meet-the-needs-of-the-job-market-27692 http://www.aei.org/files/2013/02/13/-addressing-russias-mounting-human-resources-crisis_170553566747.pdf http://www.staffingindustry.com/row/Research-Publications/Daily-News/Russia-Labour-migrants-to-be-included-in-social-insurance-system-28698 18
  • 20. ABOUT DCR DCR Workforce is an award winning, best-in-class service provider for contingent workforce and services procurement management. Our proprietary SaaS platform (SMART TRACK) assists in providing customizable VMS and MSP Solutions to manage, procure and analyze your talent with complete transparency, real-time control, high performance and decision-enabling business intelligence. DCR Workforce serves global clientele including several Fortune 1000 companies. Customers realize greater efficiencies; spend control, improved workforce quality and 100% compliance with our services. For more information about DCR Workforce and its Forecasting Toolkit (Rate, Demand, Supply and Intelligence) including Best Practice Portal, visit dcrworkforce.com facebook.com/DCRWorkforce linkedin.com/company/dcr-workforce twitter.com/DCRWorkforce plus.google.com/+DCRWorkforce For more information call +1-888-DCR-4VMS or visit www.dcrworkforce.com 7815 NW Beacon Square Blvd. #224 Boca Raton, FL 33487 sales@dcrworkforce.com | marketing@dcrworkforce.com www.dcrworkforce.com | blog.dcrworkforce.com © 2014 DCR Workforce, Inc. All Rights Reserved. DCR Workforce and Smart Track are Registered Trademarks. CCO — 082912 19