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DCR TrendLine February 2014 – Contingent Worker Forecast and Supply Report
DCR TrendLine February 2014 – Contingent Worker Forecast and Supply Report
DCR TrendLine February 2014 – Contingent Worker Forecast and Supply Report
DCR TrendLine February 2014 – Contingent Worker Forecast and Supply Report
DCR TrendLine February 2014 – Contingent Worker Forecast and Supply Report
DCR TrendLine February 2014 – Contingent Worker Forecast and Supply Report
DCR TrendLine February 2014 – Contingent Worker Forecast and Supply Report
DCR TrendLine February 2014 – Contingent Worker Forecast and Supply Report
DCR TrendLine February 2014 – Contingent Worker Forecast and Supply Report
DCR TrendLine February 2014 – Contingent Worker Forecast and Supply Report
DCR TrendLine February 2014 – Contingent Worker Forecast and Supply Report
DCR TrendLine February 2014 – Contingent Worker Forecast and Supply Report
DCR TrendLine February 2014 – Contingent Worker Forecast and Supply Report
DCR TrendLine February 2014 – Contingent Worker Forecast and Supply Report
DCR TrendLine February 2014 – Contingent Worker Forecast and Supply Report
DCR TrendLine February 2014 – Contingent Worker Forecast and Supply Report
DCR TrendLine February 2014 – Contingent Worker Forecast and Supply Report
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DCR TrendLine February 2014 – Contingent Worker Forecast and Supply Report

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It’s hard to believe that 2014 is already well underway. In the second month of the year, the staff at TrendLine was hard at work to provide you with key insights into the temporary staffing industry. …

It’s hard to believe that 2014 is already well underway. In the second month of the year, the staff at TrendLine was hard at work to provide you with key insights into the temporary staffing industry. With thorough research and in-depth analysis of data, we aim to supply you with a pulse of the temporary staffing market. As usual, our articles this month uncover trends in the industry and give you hard, actionable information on contingent workforce supply and demand.

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  • 1. REPORT # 22 | February 2014 TRENDLINE Contingent Worker Forecast and Supply Report Inside this Issue Note from the Editor 1 DCR National Temp Wage Index 2 2014 – Services Sector Employment 5 Unemployment Insurance Extensions: A View 6 Florida: The Employment Gainerzz 8 China: Opportunities for Private Sector in 2014? 10 Methodology 15 Note from the Editor It’s hard to believe that 2014 is already well underway. In the second month of the year, the staff at TrendLine was hard at work to provide you with key insights into the temporary staffing industry. With thorough research and in-depth analysis of data, we aim to supply you with a pulse of the temporary staffing market. As usual, our articles this month uncover trends in the industry and give you hard, actionable information on contingent workforce supply and demand. The DCR National Temp Wage Index focuses on wage trends over the year, analyzing the use of temp workers and tracking related developments in the economy. This month we examine the disappointing employment figures from December of 2013, and highlight temp worker demand for the upcoming year. Look for the section on Spain’s optimism for employment this year. We continue our investigation into where employment will lead in 2014 in our next article, where we focus on the services sector employment. We pay particular attention to small business growth in this year and its probable contribution to employment. At the end of 2013, Congress went on a break without extending the federal unemployment insurance emergency program that was set up in 2008. In this piece, we look at the unemployment insurance extension program from the viewpoint of both supporters and critics. Keep an eye out for our graph on the number of unemployed workers per job opening. Our next article features the state out of which we’re based, Florida. The Sunshine State had its largest monthly job gains in December 2013, and we examine Florida’s prospects for 2014. “ “ “The temporary staffing industry has been growing since the recession ended in July 2009, mostly because businesses are looking for ways to maximize their workforce flexibility” Steve Berchem, Chief Operating Officer of the American Staffing As sociation. In January, we took a glance at one of the BRIC countries, Brazil, and the e-commerce potential of the country. We continue this international study of temporary worker usage by looking at China this month. We examine the slowdown in manufacturing and the employment demographics of China, and discuss the future of growth in the world’s second-largest economy and what it would mean for temporary workers. Ammu Warrier Ammu Warrier, President Trend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 1
  • 2. DCR National Temp Wage Index Now that the holiday season is over, the rising temporary wages in Q4 of 2013 might see a counterbalance. However, according to a fourth-quarter wage trend indicator by Bloomberg BNA, overall annual wages will likely increase in 2014. Kathryn Kobe, an economic consultant with BNA, expects private sector wages to increase up to 2 percent this year. “ “ “ “ Workers’ concerns over companies canceling health insurance offerings are decreasing as well, with new reports showing that companies view offering health insurance as a means to attract good employees. Many companies believe that offering health insurance is less costly as compared to offering higher wages since the latter requires contributions to payroll taxes. “The job market ended 2013 on a high note. Job gains are broad-based across industries, most notably in construction and manufacturing. It appears that businesses are growing more confident and increasing their hiring.” ~Mark Zandi, Chief Economist at Moody’s Analytics. A Disappointing December Despite the optimism promised from looking at the growth of manufacturing, the regain of the housing market, the expectations of the holiday season, and the predictions of analysts, December was a disappointing month for employment numbers. According to the latest report from the U.S. Bureau of Labor Statistics (BLS), employers added only 74,000 jobs in December, well below the expected 197,000. The unemployment rate was down to 6.7 percent from 7.0 percent in November 2013, attributed to more jobless workers dropping out of the labor force, pushing down the labor-force participation rate to a near 35-year low of 62.8 percent. Capital Economics Chief U.S. Economist Paul Ashworth believes that the December weakness was due to the unusually harsh weather that month. According to the BLS report, people who could not get to work due to bad weather hit a 36-year high of 273,000. “This has been a two steps forward and one step back recovery.” ~Mark Hamrick, Washington Bureau Chief at Bankrate.com However, PNC Chief Economist Stuart Hoffman urges people to take the employment numbers lightly, noting that by averaging the October, November, and December numbers you have 172,000 jobs added a month, which is close to the 182,000 per month average for the year. He also expects to see upward revisions to the December 2013 figures. Trend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 2
  • 3. DCR National Temp Wage Index Temp Employment Still High Even though, December was a slow growth month, employers continued to hire temporary workers. More than half of the total jobs added in December were new temporary jobs. In December 2013, employment in temporary help services rose by 40,000 jobs. In 2013, the industry added 248,000 jobs, compared to 174,000 jobs added in 2012. Professional and business services also continued to add jobs in December with 19,000 new positions. According to the American Staffing Association, 2.816 million people held temporary jobs in December, more than the total number of workers in some sectors such as real estate or information/media. Temporary jobs in the United States grew 9.6 percent last year, about six times as fast as overall employment growth at 1.6 percent. In 2014, industry analysts expect temporary employment to continue its upward trend. According to a survey by executive search firm, Korn Ferry, 57.1 percent of U.S. workers plan to look for better positions in 2014, and 74.4 percent would consider taking a temporary job if a full-time position is not available. Temp Workers in Demand for the Tech Industry According to a study by Emergent Research, 18 percent of all IT workers today are self-employed, and this workforce is growing at a rate of 7 percent per year. Emergent says this growth is driven by companies’ quick demand for the right skills as a variable cost. Of the 17.7 million independent workers in the U.S., MBO Partners estimates that one million are IT professionals. A separate study by Computer Economics found that there has been a spike in the use of contract workers among large IT organizations (defined as those with an IT operational budget of more than $20 million). In 2013, contract workers made up, at the median, 15 percent of a typical large organization’s IT staff, up from 6 percent in 2011. A survey by Dice.com further revealed that 73 percent of hiring managers plan to hire tech workers in 2014, with demand being heaviest for help desk/technical support jobs. “ “ Online Staffing Revenue on the Rise A report by Staffing Industry Analysts predicts that online staffing spend could be as high as $46 billion by 2020. The most conservative forecast in the report is a growth of $16 billion, with a “quite plausible” forecast of $23 billion. Online staffing refers to staffing where all work arrangements are enabled via an online platform and where the hiring manager and worker often never meet in person. “ I think two of the big wildcards here are the pace of larger enterprise adoption and to what degree staffing firms (and managed service providers/vendor management systems) start to adopt and leverage these models. By 2020, my guess is that the staffing business will be much more hybridized, similar in some ways to what happened with retail and online shopping.” ~Andrew Karpie, Affiliate Analyst at Staffing Industry Analysts. Trend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 3
  • 4. DCR National Temp Wage Index Spain Optimistic about Temporary Employment Spain, the Eurozone’s fourth largest economy, is one of Europe’s hardest hit countries when it comes to employment. With approximately 6 million people out of work, the unemployment rate at 26 percent was the second highest in the European Union, second only to Greece. But the country is finally seeing some optimism; in December 2013 the number of Spanish workers registered as unemployed fell by 107,600. The country’s economy slumped after a burst housing bubble and many banks required large bailouts. The Spanish government began an austerity program to control its budget deficit and implemented structural reforms to improve productivity, which helped to recover exports and stabilize GDP in the third quarter of 2013. Economy Minister Luis de Guindos believes job creation in 2014 could exceed government forecasts. Many new jobs being created are temporary, where 92 percent of new employment contracts in 2013 were temporary. “ “ “ The National Federation of the Self-Employed (ATA) reported that 27.7 percent of self-employed people hired staff in 2013 and 26.4 percent were planning to do so in 2014. Between 2008 and 2012 as many as 80 jobs per day were destroyed, according to our members. The situations has reversed in 2013. There were more than 65,000 jobs created and we expect a growth of +1% for 2013. A lot of it is beneficial to youth employment and entrepreneurship as more than half of the new self-employed workers are under 30.” Asempleo, the Spanish association representing private employment agencies, forecasts return to growth in early 2014. According to Andreu Cruañas, President of Asempleo, candidates with IT experience will be in high demand, specifically SEM or SEO specialists, web analysts, business developers, bilingual or trilingual (English and German especially) office managers, engineers, and managers. The President of the Spanish Confederation of Commerce, Manuel Garcia-Izquierdo, predicts that electronic commerce will create new opportunities, and sectors that will see improvement include tourism, textiles, industries ancillary to new technologies, and services to people such as child care and elderly care. “Despite 26% unemployment rate, the Spanish market is looking for talent, especially specialised profiles, and experience will be valued more than training.” ~Noelia Lucas, Commercial Director of Hays Trend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 4
  • 5. 2014 – Services Sector Employment Service-providing industries added 170,000 jobs in December, while total U.S. non-farm private employment added 238,000 in the same period. This growth is attributed primarily to either small businesses or very large businesses. Professional and business services continued to be the largest contributor to employment in the service-providing sector. Average Hourly and Weekly Earnings, by Industry Every sector has seen an increase in wages year-over-year from 2012 to 2013. Information services and mining and logging topped the list of wage increase. The increase in the services-based employment, combined with an overall positive outlook for wages across the industry, results in optimism for 2014. However, while changes in wages for services are important, this might not be the best indicator for small employers. Small Business Growth This Year According to the Intuit Small Business Employment and Revenue Index, U.S. small businesses added 20,000 new jobs in December of 2013. The national economy is expected to improve in 2014, which will help the local economy and small businesses. Additionally, credit will be easier to obtain in 2014. In mid-2013, the Federal Reserve Bank of New York released a survey finding that 49 percent of businesses cited access to capital as a barrier to growth. However, by December 2013, small business loan approval rates at big banks were at 17.6 percent, up from 14.9 percent in the previous year. In addition to easier access to loans, small business owners are less affected by the new health care laws in effect this year, as many have fewer than 50 employees and are exempt from the mandate. According to the U.S. Small Business Administration, of the 28 million small businesses in the country, 96 percent will not be subject to the health law. Trend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 5
  • 6. Unemployment Insurance Extensions: A View Over the past five years, at least 600,000 workers in the United States have been out of the labor force. During this time, unemployment benefits have been in high demand. However in December 2013, unemployment benefits fell to 330,000, signaling fewer layoffs and steady job growth. The numbers from the U.S. Department of Labor support this, with the latest employment report showing an unemployment rate of 6.7 percent. The combination of the economy picking up and the country returning to a normal status of employment gain are part of the reason the federal government has decided to ends its program to give emergency unemployment benefits to long-term unemployed workers. This extended program results in a cost of $25 billion annually. “ In 2008, Congress set up an emergency benefits program to take over when state unemployment benefits ran out, usually after 26 weeks. With this federal program, benefits were extended up to 99 weeks in states with extremely high unemployment. However, in December 2013, the program was not renewed, and on December 28th, about 1.3 million people were cut off. “ “When you allow people to be on unemployment insurance for 99 weeks, you’re causing them to become part of this perpetual unemployed group in our economy.” ~Senator Rand Paul of Kentucky Different Viewpoints Critics of the unemployment insurance extensions believe that paying people not to work takes away the motivation to actively search for a job. However, opponents to ending the program point out that while the unemployment rate has dropped from a high of 10 percent to 7 percent, there are still 2.7 unemployed job seekers for every opening. At the beginning of the recession in December 2007, there were 1.8 unemployed workers per opening. Additionally, long-term unemployment (defined as being out of work for 27 weeks or more) is at a high level comparable to the World War II peak. The White House Council of Economic Advisers points out that not extending the benefits will put a dent in job-seekers’ incomes that would have an influence on the economy, costing 240,000 jobs this year. Number of Unemployed Workers per Job Opening Source: U.S. Bureau of Labor Standards Trend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 6
  • 7. Unemployment Insurance Extensions: A View Unemployment by Area Among the 49 metropolitan areas with a Census 2000 population of 1 million or more, Riverside-San Bernardino-Ontario, California, had the highest unemployment rate in November 2013, at 9.4 percent. Minneapolis-St. Paul-Bloomington, Minnesota-Wisconsin, had the lowest rate among the large areas, at 4.0 percent. Unemployment Rates for Selected Large Metropolitan Areas Unemployment rates were lower in November than a year earlier in 293 of the 372 metropolitan areas, higher in 71 areas, and unchanged in 8 areas. Twenty-one areas had jobless rates of at least 10.0 percent, and 73 areas had rates of less than 5 percent. Trend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 7
  • 8. Florida: The Employment Gainer In December 2013, Florida had its largest monthly job gains for the year, adding 25,200 jobs in the month, according to ADP reports. The state ranked second only to Texas, which gained 29,100 jobs. Growth was concentrated in service-sector jobs, which accounted for 21,480 of the new jobs. This is especially relevant in Central Florida, where service jobs tied to tourism dominate the economy. The area has over 221,000 leisure and hospitality jobs, accounting for 20 percent of the total workforce. A report on small business employment by Intuit attributes job growth to Florida’s entrepreneurial focus. Small business employment grew by two-tenths of a percent in December (Washington had the largest increase at 0.3 percent). From November 2012 to November 2013, the largest year-over-year percentage gain in employment occurred in Sebastian-Vero Beach, Florida (+8.1 percent), followed by Naples-Marco Island, Florida (+7.9 percent), and Port St. Lucie, Florida (+6.1 percent). Overall, the largest year-over-year percentage decreases in employment in Florida occurred in Panama City Lynn Haven Panama City Beach, Florida at -2.3 percent, which is the third highest in the nation. Year-Over-Year Percent Change in Non-Farm Employment in Selected Metropolitan Areas Trend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 8 “
  • 9. Florida: The Employment Gainer 2014 is Sunny for Florida According to Pew Charitable Trust’s annual State of the State report, Florida’s employment prospects in 2014 are expected to be bright. Moody’s Analytics predicts that the state will add 176,000 new jobs this year. A surge in construction and increased tourism are responsible for this optimism. A survey shows that Deltona and Cape Coral will be the most promising Florida cities for job growth, and hot jobs will include cement masons, construction project managers, and carpenters. Sean Snaith, director of the University of Central Florida’s Institute for Economic Competitiveness, expects that the state will add 600,000 jobs in 2014, with many jobs stemming from companies relocating their headquarters to Florida, including Hertz, and recently merged companies Office Depot and Office Max. “ “ “(The state) unemployment rate currently stands at 6.4 percent and, of course, nationally the rate is 7 percent. Moody’s Analytics, a job projection firm, says that Florida is in the top five states that will create the most jobs this year.” ~Sandy Johnson, Editor of State of the States Report Trend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 9
  • 10. China: Opportunities for Private Sector in 2014? “ For years, many American companies have been shifting their production bases to China in order to lower costs. However, the Chinese market is changing and business inputs such as interest rates, energy costs, and real estate have become more expensive, making it difficult for businesses to sustain their ‘low cost’ competitive edge. As migrant workers are finding more job opportunities at home, labor costs have soared by 40 percent. The country’s one-child policy has diminished the pool of young workers. Bank lending is tightening and the renminbi, Chinese currency, is appreciating by around 6 percent a year against the U.S. dollar, impacting factories with low margins. “ “China as the world factory, the best time is behind us” ~Tao Dong, Chief Asia Economist at Credit Suisse Labor shortages, especially a lack of a tech-savvy population, along with cost cutting by factories is impacting quality, and American companies are starting to feel that the risks associated with production in China are not worth the cost. A Slowdown in Manufacturing China’s Trade Balance Experts predict that in 2013, China’s economy grew by 7.6 percent, it’s slowest pace since 1999. This indicates that the industry-led development model is starting to yield diminishing returns. Economic indicators also support this assessment. China’s annual trade in goods, at $4.16 trillion in 2013, pushed the United States out of the way as the world’s largest trader. Trade surplus for 2013 was $260 billion, up 12.8 percent from 2012. Yet the surplus for December fell short of targets of $31.15 billion at $25.6 billion, down from $33.8 billion in November. Exports for December rose 4.3 percent compared to the prior year, lower than the expected 4.9 percent rise, and down from November’s 12.7 percent rise. Imports, though, increased an annual 8.3 percent in December, exceeding the expectations of 5.3 percent. This means that China continued to claim a huge share of global demand to help drive its economy. Trend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 10
  • 11. China: Opportunities for Private Sector in 2014? “ “ “ “ “ “ China Imports and Exports (Goods and Services) Analysts believe that despite the trade surplus disappointment, strong import numbers indicate that the economy remains strong. ”[The] pick-up in imports reflects that domestic demand is stronger than people expected. We think China is still capable of growing 7-7.5 percent in 2014.” ~Geoff Lewis, Global Market Strategist at J.P. Morgan Asset Management The Chinese composite Purchasing Manager’s Index (PMI), which measures business activity in both the services and manufacturing sector, dipped to 51.2 in December 2013 from 52.3 in November. Meanwhile, the Global Manufacturing 2013 wrapped up 2013 at 52.70 in December, up from 51.60 in November. “Both domestic and overseas demand was weaker than expected. Domestically, tight liquidity is weighing on factory output and orders.” ~Li Heng, Economist at Minsheng Securities Economists are still positive, pointing out that despite the slower new business growth reflected by the PMI Index, labor market conditions continued to improve for the fourth month in a row. And despite the diminishing labor cost advantage, China’s highly developed supply chains remain among the best in the world. Analysts attribute the weakness in the manufacturing sector as a natural consequence of Chinese policy makers trying to promote the growth of services and shutting down excess capacity in over-extended sectors such as steel and glass. Experts say that China has to develop a strong service sector in order to support rapid growth and avoid environmental destruction. “It’s inevitable that China’s manufacturing growth will fall, with more growth coming from services” ~Chen Xingdong, Chief China Economist at BNP Paribas Trend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 11
  • 12. China: Opportunities for Private Sector in 2014? Experts point to both manufacturers and service providers experiencing weakening in rates of output and new orders as a reason for the lower PMI in December. Additionally, manufacturers reduced their payroll numbers, while service providers hired additional staff. Employment Demographics In 2012, China’s total population was 1.35 billion, of which the working population was 937 million, a decrease of 3.45 million from 2011. Of this working population, statistics released by the Ministry of Health and Human Resources reveal that 767 million were employed. Accounting for 48.4 percent of the overall working population, 371 million workers were employed in urban areas. From 2008 to 2012, the number of workers in urban areas has had a steady increase while employment in rural areas dropped by 6 percent over the same period. The Urban and Rural Workforce in China” Source: China Labour Bulletin Wage Growth in 2014 China’s wages are expected to increase by 10 to 15 percent in 2014. The ruling Communist party supports pay increases to maintain public support and to drive the country’s shift from capital-intensive manufacturing to a more services-driven economy. Current minimum-wage increase announcements gave workers in Shenzhen in Guangdong province a 13 percent increase and workers in Yangzhou, Jiangsu province a 15.6 percent increase. Minimum Wages Across China - January 1st, 2013 Source: China Briefing Trend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 12
  • 13. China: Opportunities for Private Sector in 2014? The rising wages have prompted companies such as Nike Inc. to seek lower labor costs in nearby countries, like Vietnam. In a series of separate interviews with a dozen Chinese exporters, the New York Times reported that all cited finding enough skilled blue-collar workers and paying their high wages as their largest problem. Compensation in urban China is roughly three times as high as Indonesia, four times as high as Vietnam, five times as high as Cambodia, and ten times as high as in Bangladesh. However, these other countries have their own share of issues such as unreliable electricity grids and poor infrastructure. In spite of continuing wage growth, a survey reveals that 14 percent of Chinese employers plan to hire in the beginning of 2014, with the strongest labor markets anticipated in the Finance, Insurance & Real Estate sector and the Manufacturing sector. Rising Wages in China The Wall Street Journal How will China Generate Growth This Year? Foreign investment in China has idled recently, but China still invests heavily in itself. Domestic investment is high with Chinese entrepreneurs and State-Owned Enterprises (SOEs) generating enough cash to invest in new factories and equipment. The private sector is also expected to drive growth. The Chinese government has begun to reduce the number of items that require government approval, and SOE reform is expected to make these firms more efficient and increase private ownership of assets. An example is the banking regulatory commission’s decision to allow the creation of up to five privately financed banks in 2014 as part of the reform to make China’s economy more productive. Since state-owned banks tend to lend mostly to government companies, the entrance of private banks will help to support credit-less entrepreneurs who will create new jobs. This reduction in government control along with deregulation should help to boost private investment. Trend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 13
  • 14. China: Opportunities for Private Sector in 2014? What This Means for China’s Temp Workers At the end of 2012, China tightened its labor laws, effective July 2013, to ensure that workers hired through contracting agents, called ‘dispatch workers’ are offered the same conditions as full employees. In 2012, contracted workers made up a third of the workforce at many Chinese and multinational factories. The changes to the Employment Contract Law limit the type of work that a staffing agency worker may perform for an employer. The work must be temporary (less than six months), auxiliary (related to non-core business), or substitute (temporary replacement of employee on leave) in nature. The temporary worker is entitled to the same pay as the employer’s regular employee in the same position, and employers are required to bear all costs and liabilities in connection to the worker. Penalties for non-compliance were also increased to range from RMB 5,000 to RMB 10,000 per dispatch worker. Additionally dispatch labor providers operating without a license are subject to a fine of one to five times their illegal gains and many have their gains confiscated. While China’s use of contingent labor is more regulated than in the United States, its dependence on flexible workers is comparable. As dispatch workers are now protected by ‘equal pay for equal work’ regulations, increases in overall wages will also expand to this type of worker. A provision of the legislation that limits the total number of dispatch staff to less than 10 percent of the company’s total workforce will keep the number of temp workers in check. Historically many migrant workers have found jobs in factories in China’s Pearl River Delta, but reports show that the employment outlook for this region is at its weakest since 2009. This is partly due to steadily rising labor costs and to the new temporary workforce regulations. Traditionally, companies have used temp workers as a cost-saving tactic as these workers do not sign contracts with factories, thus saving tens of thousands of dollars per month in insurance payments alone. Workers have been attracted to temp work, however, by the freedom and flexibility that these positions offer and the higher frequency of pay as compared to full-time employees. Due to the low margins at factories, many employers pay workers on a monthly-basis or run late on payroll payments, while temp workers are generally paid on time on a weekly basis. However, with the extended protection of temp workers, Chinese employers might be more hesitant to maintain a temporary workforce due to the increased risk and decreasing benefits in terms of cost. Trend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 14
  • 15. 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 Trend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 15
  • 16. Methodology References http://www.bls.gov/news.release/empsit.nr0.htm http://www.staffingindustry.com/Research-Publications/Daily-News/Wage-growth-likely-to-pick-up-later-this-year-28673 http://www.staffingindustry.com/Research-Publications/Daily-News/57-of-US-workers-plan-to-seek-new-jobs-this-year-survey-finds-28627 http://www.crainsnewyork.com/article/20140119/SMALLBIZ/301199986/small-businesses-are-gearing-up-for-growth http://www.bls.gov/opub/ted/2013/ted_20130710.htm http://www.usatoday.com/story/opinion/2014/01/05/unemployment-insurance-extensions-competitive-enterprise-institute-editorials-debates/4330603/ http://www.bls.gov/web/jolts/jlt_labstatgraphs.pdf http://www.usatoday.com/story/money/business/2014/01/07/stateline-states-that-will-generate-jobs-in-2014/4355163/ http://www.forbes.com/sites/samanthasharf/2014/01/10/jobs-report-u-s-economy-added-just-74k-jobs-in-december-unemployment-down-to-6-7/ http://www.cnbc.com/id/101325240 http://www.business-standard.com/article/international/china-s-official-manufacturing-pmi-dips-to-51-in-dec-114010100052_1.html http://online.wsj.com/news/articles/SB10001424052702303453004579293142838870848 http://www.businessinsider.com/china-retail-pmi-2014-1 http://www.clb.org.hk/en/content/employment-china http://www.bloomberg.com/news/2014-01-06/china-wages-seen-jumping-in-2014-amid-shift-to-services-.html http://www.nytimes.com/2014/01/10/business/international/chinese-exports-withstand-rising-labor-costs.html http://www.forbes.com/sites/oliverbarron/2014/01/13/china-2014-forecast-cloudy/ http://www.theguardian.com/world/2014/jan/07/china-private-banks-2014 http://www.reuters.com/article/2012/12/28/us-china-labor-idUSBRE8BR04120121228 http://www.lexology.com/library/detail.aspx?g=22da6bd1-ebaf-4329-9065-f71bba8912fa http://www.law360.com/articles/442442/what-to-know-about-china-s-labor-dispatch-model-reform http://www.businessweek.com/articles/2013-09-12/china-s-bottom-line-slower-gdp-growth-but-with-steady-employment http://blogs.wsj.com/chinarealtime/2013/03/15/china-the-jobs-report/ http://inthesetimes.com/working/entry/14740/china_wages_temp_workers/ http://www.computerworld.com/s/article/9244930/Your_next_job_next_year_may_be_self_employment?taxonomyId=214&pageNumber=1 http://www.ere.net/2014/01/06/tech-hiring-isnt-going-to-get-any-easier-this-year/ http://www.staffingindustry.com/Research-Publications/Daily-News/World-Online-staffing-revenue-could-reach-46-billion-28527 http://www.china-briefing.com/news/2013/01/04/china-initiates-new-round-of-minimum-wage-increases.html http://qz.com/165820/more-than-half-of-the-us-jobs-added-in-december-were-temporary/ http://money.cnn.com/2014/01/03/news/economy/spain-jobs/ http://www.staffingindustry.com/eng../Research-Publications/Daily-News/Spain-High-hopes-for-temporary-employment-in-2014-28482 Trend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 16
  • 17. About DCR Workforce 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 For more information call +1-888-DCR-4VMS or visit www.dcrworkforce.com Public Relations: Debra Bergevine 508-380-4039 7815 NW Beacon Square Blvd. #224 Boca Raton, FL 33487 debra.bergevine@dcrworkforce.com | sales@dcrworkforce.com | marketing@dcrworkforce.com www.dcrworkforce.com | blog.dcrworkforce.com facebook.com/DCRWorkforce linkedin.com/company/dcr-workforce twitter.com/DCRWorkforce Google+ © 2014 DCR Workforce, Inc. All Rights Reserved. DCR Workforce and Smart Track are Registered Trademarks. CCO — 082912 Trend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 17

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