DCR Trendline January 2013 – Contingent Worker Forecast and Supply Report


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DCR Trendline provides data, demand, usage insights, analysis and modeling of the contingent labor market and evaluates the ever changing demand and supply of the US contingent workforce.

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DCR Trendline January 2013 – Contingent Worker Forecast and Supply Report

  1. 1. REPORT # 11 | January 2013 TRENDLINE Contingent Worker Forecast and Supply ReportInside this Issue Note from the EditorNote from the Editor 1 As we begin the New Year, our concentraƟon this month lies upon closing up 2012 byDCR National Temp Wage Index 2 providing you a summary of the trends in temporary employment in 2012. TrendLine, this month, provides you with acƟonable insights into the conƟngent staffing industry whileYear in Review: A Comparative Look showcasing pivotal trending themes. With our ever-growing diverse range of sources, weat the Temporary and PrivateEmployment Trends in 2012 3 analyze conƟngent worker supply and demand to bring you predicƟve forecasts of wage trends and market standing.Super Sectors over the Year 4 As always we start our ediƟon with the DCR NaƟonal Temp Wage Index, focusingOnline Job Growth 5 specifically on key forecasts for the first quarter of 2013. Our first feature arƟcle is a highlightsoriented comparaƟve analysis of 2012 trends in both temporary and privateService-Sector Hiring to Hit Four employment. Pay parƟcular aƩenƟon to the comparaƟve employment index graphs, andYear High 6 our insighƞul conclusions regarding these categories. ConƟnuing our aƩenƟon to the year past, we provide you with a breakdown of the employment in the super sectors overEmployment Projection in 2013 7 2012, including an analysis of one featured industry. We also follow-up our previous ediƟonFocusing on Youth: Temporary arƟcles on online job searches with an analysis for Monster’s employment index of online jobEmployment and Safeguards 10 posƟngs.Unstructured Data Analysis: From We then shiŌ our focus to 2013 with a feature on hiring in the service sector (“ServiceMystery to Magic 12 Sector Hiring to Hit Four-Year High”), and follow this analysis with projecƟons for employment trends in the upcoming year. Look out for our forecasted projecƟons on the largest industriesMethodology 14 to grow in terms of employment in the upcoming year. We conƟnue this secƟon with a special piece on youth employment with specific analysis and advice for graduaƟng college studentsReferences 14 searching for employment. Our final piece this month explores the trend of unstructured data analysis. We discuss the importance of using this valuable informaƟon, and the challenges companies face as they try to solve the mystery of this intricate data source. This arƟcle also features an internal case study “In the next 12 months, com- proving the value of unraveling the intricacies of unstructured complex data.“ panies will re-imagine how work gets done, who does it, On a concluding note, the DCR Market Intelligence Editorial Staff, along with the enƟre complish the task. Workforce changes that started during tensify, cluding offering more flexibil- ity over where and when their ver people work, and relying on more conƟngent and contract workers” ~Workforc workers” ~Workforce.com “ “ and what tools they use to ac- the recession will intensify, in- recession worker-base of DCR Workforce, would like to extend our wishes for a happy holiday season with conƟnued peace, joy, and success in 2013! Ammu Warrier Ammu Warrier, President Trend Line: ConƟngent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 1
  2. 2. DCR National Temp Wage IndexDuring the start of the year, we expect to find temporary worker wages on the relaƟvely higher side, which could dropslightly towards the end of the first quarter.Forty-six percent of hiring managers and recruiters expect addiƟonal hiring during the first half of 2013 as comparedto the second half of 2012. Meanwhile, 44 percent of hiring managers and recruiters say that current economiccondiƟons are having no substanƟal impact on their hiring plans.Low-wage industries like retail and hospitality are known to employ a high number of part-Ɵme workers and arepreparing for the largest increase in costs, with 46 percent saying they’re expecƟng costs to increase by a minimum of3%. The health care industry is in a similar situaƟon, with 40 percent expecƟng that same increase in costs. According to the Freelancers Union, nearly one in three American workers are freelancers,contractors, or conƟngent workers. And 19 percent of them say that they have doubledtheir income in the pas year. ome past Trend Line: ConƟngent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 2
  3. 3. Year in Review: A Comparative Look at the Temporary and Private Employment Trends in 20122012 was a strong year for temporary workers, as year-over-year, the number of temporary help jobs rose by182,800 The United States added 18,000 Temp jobs in November with the jobless rate down to 7.7%. The temporarypenetraƟon rate rose to 1.91% in November from 1.90% in October.Meanwhile, in private employment, college-level employment, which is considered similar to professional employment,remained at 3.8% (the same as last month), which dropped in October by 0.3% compared to September’s 4.1%. HurricaneSandy also did not substanƟvly impact the naƟonal employment and unemployment esƟmates for November 2012.Facts and Figures – A Comparison of Temporary and Private Workforce TrendsTrend Temporary PrivateNumber of months with a positive change in employment (Jan 2009 – Nov 2012): 36 14Number of months with a negative change in employment (Jan 2009 – Nov 2012): 11 33Total employment created in 2012 187,300 169,700Average employment growth per month in 2012 17,027 154,272.70Comparison in Employment Index (Jan 2009 to Nov 2012)Comparing the indexes of bothcategories of employment, itis interesƟng to observe thattemporary employment, usingJanuary 2010 as a reference point,immediately began to rise, whileprivate employment only startedto see some improvement in May2012.Out of the 47 months from Jan2009 to Nov 2012, temporaryemployment has shown posiƟveincrement during 36 months,whereas total private job has had aposiƟve increment in employment Temporary Employment Indexfor 33 months.Finally, we really see the strengthof the temporary employmentswith temporary jobs increasingby 30.39 index points above thereference, whereas private jobcould only make .82 index pointsabove reference. Private Employment Index Trend Line: ConƟngent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 3
  4. 4. Super Sectors Over the Year During the last year, Professional and Busi- ness Services have shown a maximum growth of 3.04 index points followed by Lei- sure and Hospitality at 2.27 index points and TransportaƟon and Warehousing by 2.09 in- dex point. Temporary Help Services falls as a part of Professional and Business Services, which has had a remarkable growth trend with a higher change in index points than total pri- vate jobs together. The sector also shows the maximum months of posiƟve increment in employment over the last four years. Industries showing a noƟceable increment in November 2012 are Retail Trade (53,000), Professional and Business Services (43,000), and Health Care (20,000)The Employment Service industry - mostly includes temporary help services, employment placements agencies, execuƟve search services andprofessional employer organizaƟons - rose by 3,800 jobs with a total employment of 3.21 million.Super Sector Change in Employment (year-over-year) Temporary nurses in healthcare services proved to be a lifesaver for 1.3 million pa- Ɵents across California, Florida, New Jersey, and Pennsylvania, in more than 600 hospi- tals. This trend also contradicts the myth that “poor paƟent outcomes once believed associated with the hiring of supplemen- tal nurses in hospitals” (study published by Health Services Research) is actually caused by poor working condiƟons within those hospitals. According to this new study by researchers at the University Of Pennsylvania School Of Nursing, the American Staffing AssociaƟon emphasized the importance of temporary nurses for the industry and paƟent care “Our study showed these nurses could be lifesavers…Hiring temporary nurses can alleviate shortages that could producehigher paƟent mortality.” ~Linda Aiken, lead researcher and professor of sociology and nursing Trend Line: ConƟngent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 4
  5. 5. Online Job Growth In Percentage (Source: Monster.com via Staffing Industry Report Webinar – December 2012)Online staffing brought in a new set of workers, which was not previously possible, either technically or economically.As per a survey, 71% of the respondent want to engage more online workers, whereas the remainder either preferred to stay at thesame level or less. Out of those that wish to onboard more online workers, 61% of the survey respondent plan to increase their spendby 50% or more.Online staffing triggered investments by the companies. Total esƟmated global spend in 2009 was $250 million (approx.), whereas2012 total investment increased around four Ɵmes to $1 billion. Online Posting Year-over-Year and Index 170 12% 160 10% 150 8% 140 6% 130 4% 120 110 2% 170 0% (Source: Monster.com via Staffing Industry Report Webinar – December 2012) Trend Line: ConƟngent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 5
  6. 6. Service-Sector Hiring to Hit Four-Year HighAccording to a naƟonal employment report released by the Society for Human Resources a Management, hiring in the servicesector is expected to hit an all Ɵme high since the last four years.43.3 percent of service sector companies will hire while 9.3 percent will reduce their workforce, resulƟng in a net increase of 34percent. This shows an increment of 21.8 percent compare to December 2011.Meanwhile, the manufacturing sector is expected to slightly reduce their hiring for the first Ɵme in the last five months. However,a net of 25.3 percent of manufacturers plan to add jobs in December 2012. That compares to a net increase of 29.1 percent inDecember 2011. (Source: December 2012 SHRM LINE Report) Trend Line: ConƟngent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 6
  7. 7. Employment Projection in 2013The Engineering industry is expected to grow by 5%, Finance and AccounƟng by 7%, and Legal by 2%.It’s important to remember more than 1.3 million private sector jobs have been created this year and business condiƟons point toconƟnued modest job growth,” said Scot Melland, chairman, president and CEO of Dice Holdings.U.S. unemployment will stay close to the current 7.9 percent rate in 2013 but gradually decline to 7.2 percent by the end of 2014,according to the UCLA Anderson Forecast’s fourth and final quarterly report of 2012.The outlook predicts that the U.S. gross domesƟc product will grow at less than a 2 percent annual rate through mid-2013. AŌer that,the forecast expects growth to pick up and exceed 3 percent for most of 2014 with housing acƟvity leading the way. By the end ofthe forecast period, inflaƟon is expected to be above the 2 percent target, bringing an end to the zero-interest-rate policy that hasbeen in place since late 2008. 2013 Major Industries Contributing to Employment (Source: UCLA Anderson Forecast and Staffing Industry Analysts) Trend Line: ConƟngent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 7
  8. 8. Employment Projection in 2013 Projection: Top 10 Industry to Grow (Employment) in 2013Employment Outlook in 2013According to MaƩ Ferguson, the CEO of CareerBuilder, the “U.S. will produce the most jobs in 2013 is likely to follow growth paƩernsof the last few years”, especially that of 2012 onwards.Professionals such as soŌware developers and computer analysts in IT-related jobs, and sales representaƟves in wholesale, alongwith scienƟfic trade posiƟons are likely to see an improvement. People with technical degrees, such as mechanical or industrialengineering and logisƟcs, are also expected to see a posiƟve trend for employment.As per an economic panel and forecast, the U.S. economy output will slowly rise from 1.9% to 3% by the fourth quarter of 2013.Growth in employment is expected at a steady rate. Trend Line: ConƟngent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 8
  9. 9. Employment Projection in 2013 In spite of a few challenges emerging from the recovering economy, a few sectors will conƟnue to boom, such as contract and temporary help services and the service sector. As per the NaƟonal Restaurant AssociaƟons (NRA) Restaurant Industry Forecast for 2013, America’s over 980,000 restaurants are expected to have record sales in 2013 with a close to 4% increase from 2012. This will conƟnue to be one of the largest job creators in its segment, which is close to 13.1 million workers engaged in 2013. The Department of Labor (DOL) had a budget request in FY 2013 of $12 billion in discreƟonary budget authority and 17,419 full-Ɵme equivalent employees (FTEs). This request is to support the Secretary of Labor’s vision of “good jobs for everyone”, as discussed in detail in the DOL’s Strategic Plan. The Plan is an outline of the DOL’s strategic and outcome goals over fiscal years 2011 to 2016 Top 10 Industry (month-over-month) growth in Employment (2010-2012) Professional and technical services Temporary help services Employment services Food services and drinking places AccommodaƟon and food services Health careAdministraƟve and support services AdministraƟve and waste services Health care and social assistance EducaƟon and health services Trend Line: ConƟngent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 9
  10. 10. Focusing on Youth: Temporary Employment and SafeguardsHoliday Bring Increase in Temporary EmploymentFor many retailers, the holiday shopping season is a “make or break” period that can define their boƩom lines for the enƟre year.Temporary and part-Ɵme employment spikes as retailers and other businesses increase staffing to accommodate their seasonalincrease in business.Many students experience an increase both in their free Ɵme and their need for extra cash around the holidays. As many retailershave an increased need for seasonal/ part-Ɵme help at that same Ɵme, many employers will fill their seasonal and/or part-ƟmeposiƟons with young workers. It is oŌen a good fit for both parƟes.WHD Safeguards the Young / Minor employeeThe Department of Labor’s Wage and Hour Division (WHD) aims to promote and enforce compliance with labor standards,parƟcularly as it relates to child labor. Youths aged 14 and 15 can be employed outside of school hours in a variety ofnon-manufacturing and non-hazardous jobs for limited periods of Ɵme and under specified condiƟons. Any work not specificallypermiƩed, as per the DOL’s child labor regulaƟons, is prohibited. Those aged 16 or 17 can be employed for an unlimited range ofhours in any occupaƟon except for those deemed hazardous by the Secretary of Labor.Youth Employment 2012: Facts and FiguresAccording to the Bureau of Labor Standards, the youth labor force (16 to 24 year olds working or acƟvely looking for jobs) hademployment reaching 19.5 million in July 2012. The labor force parƟcipaƟon rate for all youth in July 2012 was at 60.5% Trend Line: ConƟngent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 10
  11. 11. Focusing on Youth: Temporary Employment and SafeguardsProspects Bleak for Recent College GradsCollege graduates, despite an improvingeconomy and job market, have an uphill climbtowards finding employment post-graduaƟon.According to the Economics Policy InsƟtute,almost 50% of recent college graduates areunemployed or underemployed. And per aJuly 2012 Wall Street Journal ArƟcle, younggraduates face the bleakest odds amongst alljob seekers with a real unemployment ratearound 17%.However, Forbes Magazine, along withseveral career consultants, encourage collagestudents to target temporary employment asan avenue for a career. With temporary jobsincreasing for nine consecuƟve quarters, it isa legiƟmate strategy to pursue.Even hotspots for young workers, such as Silicon Valley, project employment growth to be made up primarily of contract orlower-salary opportuniƟes. Dr. Bonnie Snyder, author and college/career consultant, points to temporary labor as the one hopefulpoint of the disappoint college job reports, and advices unemployed college graduate to seek opportuniƟes with local temporaryagencies. She states that “temporary work can be like a paid internship…if you do a good job, it’s likely that the employer will seekways to try to keep you on.” Members of the class of 2012 have stated finding success by using internships and work-study programsnot just as resume boosters but also gateways to permanent jobs.“Employers remain hesitant to add permanent employees due to uncertainty about the current strength of the economy andfuture economic condiƟons, including impeding tax increases and spending cuts expected to take effect in January 2013. In Ɵmeslike these, businesses are being much more strategic in sourcing addiƟonal talent and maintaining workforce flexibility” ~RichardWahlquist, CEO of ASA Trend Line: ConƟngent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 11
  12. 12. Unstructured Data Analysis: From Mystery to MagicCompeƟng on analyƟcs has spawned poster-boys in the tech boom. Agile, early adopter of new technologies, companies thatembraced innovaƟon and technology stood tall above the compeƟƟon. Moore’s law ensured processing came easy, cheaper andfaster. SoŌware costs came down and more and more open source soŌware conƟnues to make analyƟcs even more exciƟng. In thenew fronƟer that excites innovaƟve companies, unstructured data analysis has been most prominent. The field is oŌen referred toby many similar and equivalent, but someƟmes misquoted sciences - Natural Language Processing, ComputaƟonal LinguisƟcs, ortext/web mining are but a few. In this arƟcle, we unravel the mystery and power of unstructured data analysis so that managers canimplement and use to their advantage.What is Unstructured Data in a Firm?An enterprise generates unstructured data in mulƟple forms and formats.. Emails, contracts, policies, standard operaƟngprocedures, meeƟng minutes, sharepoint and shared drive documents, presentaƟons, consulƟng reports, audit reports, archives,invoices, customer feedback – the list is endless. Structured data is in form of tables, which most of us know of throughspreadsheet packages like Excel. Many of us can “play” around with structured data using our excel skills but need the company’sanalyƟcs person to analyze customer feedback from mulƟple customers. We need addiƟonal skills and tools to wade through themaze. Meanwhile, companies cannot afford to ignore criƟcal data in text form, but they don’t possess the capacity to analyzedata beyond the immediate purpose for which it is generated.Quick winning applications to start with Applications for steady users ofin Unstructured Data Analysis text mining• SenƟment analysis • Social Network Analysis• MulƟ-Dimension Scaling • MulƟlingual text mining• Word Frequency • Anomaly detecƟon• Document classificaƟon • Live stream analysis• Intelligent spam filter • Big data and mulƟple sources• Trend DetecƟon • Clustering Trend Line: ConƟngent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 12
  13. 13. Unstructured Data Analysis: From Mystery to Magic Challenge of Unstructured DataIn many ways text is like data, but it is important to keep in mind that text is not data. Even in the ways that text mimics data, it is notreadily so and needs some massaging and “structuring” to mold it into a shape fit for analysis.To understand the challenge of unstructured data, think back to grade school. How different were the subjects MathemaƟcs andEnglish in school for you? Solving the puzzle really boils down to playing English by the rules of mathemaƟcs and staƟsƟcs while sƟlltreaƟng it as English; and therein lies the challenge. In other words, one needs to convert text to numbers so that powerful algo-rithms can be applied for meaningful analyses.Text data has rules of syntax, grammar and expression, resulƟng in the same content being able to carry different meanings.How true! is not the same as How is it true? The interpretaƟon is also domain-sensiƟve. So, the same text could acquire differentmeanings when used in media and entertainment or in say, medical research. Likewise, there are dialect-specific or culture-specificnuances, sarcasm and emoƟons that alter meaning that must be inferred from context than mere words. All of this complicatesanalysis.ComplicaƟon in analysis has its own secondary problems too. One needs powerful algorithms, unique training of machine to amodel, since most text mining applicaƟons are context-specific and then it needs large scale processing. In fact, all serious users oftext mining know the latest buzzword, “big data”, very quickly.Another challenge is in terms of achieved accuracy levels in using predicƟve analyƟcs or algorithms in classifying text data. OŌen a60-70% accuracy is the best achievable. It may sƟll be an asset compared to not using text mining, because it possibly took secondsand one is at least not worse off by using it. But addressing this issue appears opƟmisƟc due to recent improvements in research,accessibility and computaƟonal powers.The Good NewsThe challenge is steep but then we have come a long way. As menƟoned earlier, processing power, bandwidth and big data makinghuge storage and processing power once available only to naƟons and biggest corporate, are now available to lay users at a piƩance.Growing research in the area is encouraging adopƟon in an increasing number of areas. Open source tools are available andsophisƟcated add-ons to these are updated frequently. Many of the popular analysis and staƟsƟcal packages have a text miningadd-on or opƟon too, and many of these are very sophisƟcated at that.A Case Study: Recruitment Streamlining through Algorithm Based Candidate Profile ClassificationIn a pilot done by DCR Workforce, candidate profiles were used to do machine learning and “train” the algorithm to grasp featuresfrom a test data of resumes of candidates applying for a technical job posiƟon. Subsequently, aŌer validaƟon of classificaƟon ofcandidates into Accept/Reject categories, the algorithm was run on fresh resumes. A further improvement and larger database toimprove outcomes resulted in a score each for all unseen resumes. Recruiters now could review profiles and shortlist for interview ina decreasing order of priority of profiles. Valuable hours were saved for recruiters, and metrics like resumes read per candidateselected and resumes maintained, shortlisted, selecƟvity raƟo- all showed significant improvement.Going ForwardAs you can imagine, many big data sources are unstructured, resulƟng in the analysis of unstructured data to emerge as a populartopic for managers in a whole array of industries. Industry leaders are starƟng to recognize the importance of unraveling this valuableinformaƟon with appropriate informaƟon extracƟon into a manageable size and format. Having this valuable insight into the “bigpicture” rather than a simple sample set will allow companies to make key decisions substanƟal to enhancing business performance.The mystery of unstructured data can truly turn into a magical formula for companies in all sectors.Next month, we conƟnue our examinaƟon of uƟlizing unstructured data, parƟcularly the methods for extracƟon. Look out for aninteresƟng follow-up arƟcle in which we discuss another applicaƟon of text mining using customer feedback data. Trend Line: ConƟngent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 13
  14. 14. MethodologyThe DCR Wage Index is developed to assess the relaƟve movements of temporary wage rates in the U.S. economy. Thewage rates for temporary workers or conƟngent workforce are based on payments made by staffing firms to theseworkers based upon hours worked. Data collected from sources such as Bureau of Labor Standards (BLS) and othergovernment sites as well as an internal pool of staffing companies and consultants, is aggregated and classified basedon 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 parƟcular month indicates relaƟve wages withthe said baseline and is representaƟve in terms of direcƟon and scale of change. Five years of data has been includedto observe seasonal paƩerns and disƟnguish seasonality from long-term wage movements. The data and the model hasbeen further refined over last six months.DCR Wage Index combines the exhausƟve data from BLS with pracƟcal and more recent developments and data fromon-field consultants and clients, to provide Ɵmely near-term indicaƟons of trends and consistent long-term acƟonableand objecƟve informaƟon.Source DataDCR Work Index uses mulƟple economic variables to ensure the robustness of its forecasts and cross-validaƟonof trends.Key data sources and parameters of interest included and influencing the index are:Unemployment dataGross DomesƟc ProductPrime rate of interestNew and seasonal Job openingsNon Form employmentJob OpeningAll ExportAll ImportAverage Hourly Earnings of All Employees Total PrivateAggregate consultant data on job market parametersReferences:hƩp://social.dol.gov/blog/Ɵs-the-season-of-holiday-hiring/hƩps://staffingindustry.comhƩp://www.dol.gov/dol/budget/2013/bib.htm#.UMpa23Pjnhs Trend Line: ConƟngent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 14
  15. 15. About DCR WorkforceDCR Workforce is an award winning, best-in-class service provider for conƟngent workforce and servicesprocurement management. Our proprietary SaaS plaƞorm (SMART TRACK) assists in providing customizable VMSand MSP SoluƟons to manage, procure and analyze your talent with complete transparency, real-Ɵme control, highperformance and decision-enabling business intelligence.DCR Workforce serves global clientele including several Fortune 1000 companies. Customers realize greaterefficiencies; spend control, improved workforce quality and 100% compliance with our services.For more informaƟon about DCR Workforce and its ForecasƟng Toolkit (Rate, Demand, Supply and Intelligence)including Best PracƟce Portal, visit dcrworkforce.comFor more informaƟon call +1-888-DCR-4VMS or visit www.dcrworkforce.comPublic RelaƟons:Debra Bergevine508-380-40397815 NW Beacon Square Blvd. #224 Boca Raton, FL 33487debra.bergevine@dcrworkforce.com | sales@dcrworkforce.com | markeƟng@dcrworkforce.comwww.dcrworkforce.com | blog.dcrworkforce.com facebook.com/DCRWorkforce f linkedin.com/company/dcr-workforce lin twiƩer.com/DCRWorkforce tw © 2012 DCR Workforce, Inc. All Rights Reserved. DCR Workforce and Smart Track are Registered Trademarks. CCO — 082912 Trend Line: ConƟngent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 15