DCR Workforce June 2013 Trendline Report

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DCR Workforce June 2013 Trendline Report

  1. 1. Winding down the last month of the second quarter of 2013, Trendline is here once againto bring you key insights into the temporary staffing industry. Our up-to-date research andin-depth analysis of information ensure that you have a pulse of the market. As always, ouranalysis of contingent workforce supply and demand gives you predictive forecasts of wagetrends and market status.The DCR National Temp Wage Index focuses on wage trends through the course of the year andanalyzes the usage of temp workers and related developments in the economy. This month,we focus on the energy and manufacturing sector and also discuss the growth of jobs and oftemporary staffing.Our next article hones in on the optimism of the Midwest when it comes to hiring in 2013.While employment gains in the area have been dismal, employers are positive about staffinggrowth throughout the remainder of the year.We then shift our focus to the most recent data from the Bureau of Labor Statistics (BLS) andlook closely at job gains and losses in private sector employment. This is followed by a cutting-edge piece examining the discrepancy between the signs that point to increased hiring yetthe low actual hire numbers. Look for our graph comparing job openings over the past year toactual hires.The Occupational Safety and Health Administration (OSHA) recently made an announcementthat has the staffing industry talking. We examine this new initiative that extends protectionsfor temp workers, its implications and the considerations that prompted it. We cross-examinethe information presented by OSHA by looking at actual numbers from the BLS. Keep an eye outfor our prediction of what this new program means for the temporary staffing industry.Our final article this month spotlights North Carolina’s expanding energy sector and its potentialjob growth opportunities for temporary workers, the type of workers that will be needed andwhat their wages will be.Ammu WarrierAmmu Warrier, PresidentInside this IssueNote from the EditorDCR National Temp Wage IndexMidwest Businesses Optimisticabout Hiring in 2013A Closer Look at Changes inPrivate-Sector Employment(Q3-2011 to Q3-2012)Fewer Layoffs, Low Unemploy-ment Rates and Open Positions,Yet Still Low HiringOSHA Increases Protection forTemp WorkersPublic or Private: Which Type ofJob to Opt for?North Carolina: Energy SectorCreating Employment Boom forTempsMethodologyAbout DCR1245891011121415REPORT # 16 | June 2013TRENDLINEContingent Worker Forecast and Supply ReportNote from the EditorTrend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 1
  2. 2. In the current quarter, the Temp Wage Index is likely to remain mostly flat, increasing slightly towards the end of June.Businesses and government agencies alike are increasingly turning to staffing firms for their talent needs due to increasedconsumer demand, a greater need for flexibility and the requirements of the new health care act. Automakers, pharmaceuticalcompanies and are all utilizing temporary workers. These workers - full-time and part-time - handle a wide variety of tasks frommanning factories and warehouses to working in sales positions.According to an April 9th estimate by Staffing Industry Analysts, a global advisor on contingent work, staffing industry revenuewill increase 6% annually over the next two years to $139.4 billion in 2014. Research Analyst Timothy Landhuis says that thefastest-growing segment of staffing this year will be healthcare, which will grow by 9%. The second-fastest growing segmentsare information technology and marketing/creative temporary staffing, both of which benefit from the rapid increase in web,mobile and social media technologies.Jeff Silber, an analyst at BMO Capital Markets, says that the difference in the current economic expansion as compared with pastrecoveries is that companies are hesitant to hire even though their businesses are growing and more staff is required.Recent discoveries of oil and gas reserves have put the U.S. on the path to becoming the world’s largest producer of oil andnatural gas. According to economist Douglas Holtz-Eaken, former director of the Congressional Budget Office, domestic energyproduction “is going to be a real driver of economic growth”. The gains will be reflected through more jobs in drilling and atother energy work sites.The manufacturing industry will, however, not realize benefits from the rise in energy-related sectors, as “U.S. manufacturinghas become so much less energy intensive overall in recent years” says Alan Tonelson of the U.S. Business and Industry Council.Energy Sector Plays a Major Role in Global Economic GrowthTrend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 2DCR National Temp Wage Index“We estimate the U.S. temp staffing market is about $100 billion, so 6 percent growth in 2013 translates to $6 billion in new orders, whichis a significant increase for the industry.”~Timothy Landhuis, Staffing Industry Analysts.“The only other option is to either work full-time people harder or hire temps”~Jeff Sibler, BMO Capital Markets
  3. 3. As per Labor Department data, employers added 165,000 jobs in April, exceeding economists’ median forecasts of 148,000in job gains. Professional and business services led the job additions with 73,000 jobs, trailed by leisure and hospitality at43,000 jobs, retailers at 29,000, and healthcare at 26,000. The number of Americans out of work for at least six months fellby 258,000 to 4.3 million. Average hourly earnings rose 4 cents to $23.87.The number of temporary workersincreased by 31,000 in April, con-tinuing the upward trend. Thetemp penetration rate was 1.97percent compared to 1.95 percentin March. On a year-over-yearbasis, temp jobs were up 184,200in April. A report from the American Staffing Association showed that staffing companies in the United States employed an averageof 2.9 million temporary workers per day in 2012, up 4.1% from 2011.Elance, a global online staffing platform,reported that 60% more freelancers were hiredin the first quarter of 2013 as compared to Q1of 2012. The online demand for workers hasbeen very strong so far in 2013 as seen withthe 300,000 jobs that were posted on Elancein Q1 of 2013, a significant increase from the230,000 posted in Q4 of 2012. And given thatmost jobs on Elance are filled within 3 days, aspike in jobs posted suggests a corresponding risein freelancer earnings over the coming months.Much of this growth is comprised of demandfor highly technical, skilled workers.The manufacturing sector is showing signs of slowing down. The U.S. Manufacturing Purchasing Managers Index by financialdata firm Markit is at 52.1 from 54.6 in March, it’s lowest reading since October. A separate report from the Institute forSupply Management shows the industry having only modest expansion. The institution also showed its index of nationalfactory activity falling to 50.7 from 51.3 in March. Economists believe this data indicates slower manufacturing growth forthe current quarter.Slowdown of Manufacturing GrowthJob Growth in April 2013Temporary Staffing RisesDCR National Temp Wage IndexTrend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 3Year-over-Year Growth in Temporary JobsGrowth in Jobs, 2010 to 2012
  4. 4. Midwest Businesses Optimistic about Hiring in 2013Trend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 4According to a survey conducted by a recruiting agency based in Wisconsin, hiring in the Midwest is expected to improve in thenext three months. The survey was administered to 320 manufacturers, banks, printers, distributers and information technologyfirms based in the Midwestern United States.According to the Quarterly Census on Wages and Employment report of the Bureau of Labor Statistics,, Wisconsin was atthe 43rd position among all states in employment gain in the 3rd quarter of 2012. It also ranked 44th out of 50 states inprivate-sector job creation. An explanation for this ranking can be found by examining the main industries of the area, which havebeen hard-hit over the past few years. No American state produces more paper than Wisconsin, and the declining demand forink-on-paper publishing has negatively affected paper mills and contract printing plants with many of them closing down. In addition,the downturn in real estate has caused many factories producing windows, doors and home construction supplies to suffer.According to the survey, 455 employers have open positions due to a lack of skilled workers. 52% of employers feel that thebiggest issue facing companies in the first quarter of 2013 was the economy, followed by a lack of qualified employees at 46%.Asked about overall business climate, 48% expect conditions to improve and only 3% expect conditions to worsen. Mostemployers (69%) expected wages to stay the same, while 30% percent expected an increase. Of the percentage that expectedan increase in wages, 53% predict a 2.1 to 4% increase, while 44% expect an increase of less than 2%.“This doesn’t just change overnight. It’s a product of our history. We are not doomed to slow growth, it’s just that it’sgoing to take time.”~Brian Jacobsen, economist at Wells Fargo BankChange in Employment thought Q3-2012 Employer Sentiments on the Mid-West
  5. 5. A Closer Look at Changes in Private-Sector Employment (Q3-2011 to Q3-2012)Trend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 5The change in the number of jobs over time is the net result of increases and decreases in employment at businesses. TheBusiness Employment Dynamics (BED) statistic tracks these changes at private businesses. Gross job gains are the sum ofincreases in employment from expansions at existing private businesses and the addition of new jobs at new privatebusinesses. In the third quarter of 2012 (the most recent data available from the Bureau of Labor Statistics) gross job gains inthe private sector were 6.8 million. Gross job losses from closing and contracting businesses were 6.6 million. This yields a netemployment gain of 199,000 jobs in the private sector in Q3 of 2012. Forecasting for 2013 shows job gains to remain relativelysteady, with slight increases in total job losses.Private Sector EmploymentPrivate Sector Firms (1-49 employees)*(F) indicates Forecasting*(F) indicates Forecasting
  6. 6. Trend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 6Private firms with an employee base of 1-49 employees are forecasted to find a net increase until Q1 of 2013, whereas Q1 andQ3 are expected to have a deficit in job gains.Private firms with 50 to 249 employees will remain strong in terms of employment throughout 2013. The projection for the yearindicates a net increase in employment, where job gains exceed job losses.Large private sector businesses will see a net increase in employment during the first half of the year though it will slow downto a deficit in net gain of employment by the end of 2013.A Closer Look at Changes in Private-Sector Employment (Q3-2011 to Q3-2012)Private Sector Firms (50-249 employees)Private Sector Firms (250 or more employees)*(F) indicates Forecasting*(F) indicates Forecasting
  7. 7. A Closer Look at Changes in Private-Sector Employment (Q3-2011 to Q3-2012)Trend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 7North Dakota had the highest gains in employment through the third quarter of 2012, but was the lowest in number of privatebusiness establishments. Among the top ten states in employment gains, California, Florida and Texas contributed almost 79%of private businesses and 76.38% of employment.Private Sector Firms (50-249 employees)Gains by State
  8. 8. Fewer Layoffs, Low Unemployment Rates and Open Positions, Yet Still Low HiringTrend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 8The drop in the number of Americans seeking unemployment benefits is an indication of fewer layoffs and hence,increased hiring. However, layoffs are only a part of the equation; employer confidence in the economy also plays animportant role in making hiring decisions.According to the Labor Department, applications for benefits dropped by 16,000 with the four-week moving average declining 4,500to 357,500.Layoff consultant, Challenger, Gray and Christmas Inc. announced that layoffs by U.S. employers dropped 23%month-over-month in April 2013, the lowest level since December 2012. Employers cut 183,162 jobs in the first quarter of 2013 ofwhich April job cuts totaled 38,121 and March job cuts equaled 49,255.However, while companies have been advertisingfor jobs, they have been slow to fill them due todifficulty in finding appropriate talent. Job openingsfor non-farm employment jumped 11% from Feb-ruary 2012 to February 2013, but the number ofpeople hired declined.The LayoffsOf the layoffs, the retail sector had the highest number of job cuts in April with 5,897 layoffs. The largest retail job cut came from theclosing of the Sears Holdings Corp. (SHLD) and Wal-Mart Stores Inc. (WMT) Portrait Studios, operated by CPI Inc.Government spending cuts also contributed to layoffs, as reflected in the healthcare, industrial goods, transportation, and aerospaceand defense industries (13,766 jobs cut in April).Total nonfarm payroll employment rose by 165,000 in April, withjob increases in professional and business services, food servicesand drinking places, retail trade, and health care. Employmentgrowthaveraged169,000permonthoverthepastyear.The professional and business service sector added 73,000 jobs inApril for an addition of 587,000 jobs over the past year. Employ-mentalsoincreasedintemporaryhelpserviceswith31,000jobs.Retailtradesaw agrowth of29,000 jobsin April.Theindustryadd-ed an average of 21,000 jobs per month in the past year. Generalmerchandise stores and health and personal care stores made upmuchofthisgrowthat15,000and5,000jobsaddedrespectively.The healthcare sector added 19,000 jobs in April. Within the industry, employment in ambulatory health care services created themost jobs (14,000).There was little change over the month in construction, while manufacturing employment was unchanged.Change in Employment“The economic slowdown that began late in the third quarter and is expected to turn into another summer slump hasyet to result in increased or widespread downsizing”~John A. Challenger, CEO of Challenger, Gray and Christmas, Inc.Change in Employment, March – April 2013
  9. 9. OSHA Increases Protection for Temp WorkersOSHA (Occupational Safety and Health Administration) recently announced an initiative to protect temporaryworkers from workplace hazard. Inspectors from OSHA will check for safety measures, appropraite training and workingconditions at every firm that employs temporary workers. OSHA field inspectors are now directed to assess whetherany employees at job sites are temporary and if any of the identified temporary employees are exposed to a violativecondition. Additionally, inspectors are directed to identify the workers’ staffing company, the company’s location and thesupervising structure under which the temporary workers are reporting.Staffing firms and companies are required to provide safe workplaces for temporary employees, along with necessary safety andhealth training on workplace hazards. Although distribution of safety-related duties and responsibilities should be clearly detailed incontracts between staffing firms and client companies, both entities may be held liable by OSHA and the courts.The initiative to protect temporary workers under OSHA was prompted by cases of temporary worker deaths in the pastyear at a South Carolina paper mill, a New York construction site and at a Florida bottling plant.As of now only the Florida case has resulted in citations, where Bacardi Bottling Corp. was cited for two willful, nineserious and one other-than-serious violations.The Center of Public Integrity says that this is not a new problem as it comes after years of complaints from contractworkers that they do not feel protected at their work sites. Research conducted found that temporary workers are at ahigher risk of occupational injury due to a lack of safety training. Some findings even imply that employers view contractworkers as expendable.A recent study by the University of Illinois at Chicago School of Public Health of 4,000 workers in Illinois who had sufferedsome form of work-related amputation found that 5 out of 10 employers with the highest number of workplace accidentswere temporary staffing companies.Another study in 2010 by the Washington State Department of Labor & Industries found that temporary workers inWashington State had a higher injury rate than permanent workers.Looking at the 2011 Census of Fatal Occupational Injuries Count by the Bureau of Labor Statistics, the final count of fatalwork injuries in the U.S. in 2011 was 4,693. The overall fatal work injury rate was 3.5 fatal injuries per 100,000 full-timeequivalent workers.Trend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 9Recent Deaths Incited InitiativeLooking at the BLS Numbers“Inspectors will use a newly created code in their information system to denote when temporary workers are ex-posed to safety and health violations. Additionally, they will assess whether temporary workers received requiredtraining in a language and vocabulary they could understand.”~OSHA press release, April 29th, 2013“OSHA feels strongly that temporary and contract workers – many of whom work in low-wage jobs and face serioushazards – must have equal protections, and employers must provide these workers with a safe workplace.”~OSHA
  10. 10. Trend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 10Public or Private: Which Type of Job to Opt for?Fatal Injury by OccupationFatal Injury by IndustryFatal work injuries involving contractors accounted for 12% of all fatal work injuries in 2011. And the largest net increasein fatal work injuries among occupations involved drivers of tractor-trailer or other heavy tracks (670 cases).
  11. 11. Trend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 11Public or Private: Which Type of Job to Opt for?Bureau of Labor Statistics data says that contingent workers’ injuries are declining. However, it seems that these injuries areundercounted.In a BLS-funded project in 2012, officials at the Washington State Department of Labor and Industries interviewed over 50employers who used temp workers. Only one-third said that they would enter a temp worker injury in their OSHA log.According to Leone Jose Bicchieri of the Chicago Workers’ Collaborative, advocates for temp workers, temporary employeesare often reluctant to report injuries because they are so easily replaced.However, many parties believe that temp workers already have the same legal protection as permanent employees.Stephen Dwyer, general counsel for the American Staffing Association, cautions against an OSHA crackdown on temporarystaffing agencies due to the consequences it might have on workers, employers and the economy.Temporary worker advocates such as the Chicago Workers’ Collaborative approve of the OSHA initiative, claiming that OSHAshould target employers known to make heavy use of staffing agencies.What Does this Mean for the Temporary Staffing Industry?The rise of the staffing industry is partially to give companies a greater distance from regulation. OSHA needs to comeup with a different approach for this rapidly growing sector.”~Leone Jose Bicchieri, Chicago Workers’ Collaborative“To the extent that efforts become heavy-handed, there can be a disincentive, then to using temporary workers”~Stephen Dwyer, American Staffing Association
  12. 12. Trend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 12North Carolina: Energy Sector Creating Employment Boom for TempsAre you looking for a temporary assignment? Well, there are plenty available and more upcoming in North Carolina!North Carolina’s emerging energy landscape, solar farms and wind projects are expected to generate several hundredtemporary jobs on average over the next several years, according to interviews and studies of North Carolina’s economicpotential from energy development.The state’s energy policy has enabled North Carolina to be the fifth-ranking developer of solar power in the country. Astudy conducted by RTI International and La Capra Associates found that the policy has been a driver of clean energydevelopment, which in turn has been an important job creator in North Carolina. The study found that the state hasreaped $1.7 billion in total economic benefits from the state’s renewable energy standard over the past six years.Based on current conditions, North Carolina would accommodate 368 wells and an average of 387 jobs per year for thenext seven years, as per the North Carolina Department of Environment and Natural Resources. The agency says that thejobs would peak at 858.North Carolina Governor, Pat McCrory, is pushing to open up coastal waters off the North Carolina Coast for energy ex-ploration. According to McCrory, opening up the Atlantic shores could create up to 140,000 new jobs during the next 20years.A report by Mike Walden, an economist at North Carolina State University, says that gas drilling would generate $80million annually in income. Offshore energy exploration would result in $181 million in annual income, according toWalden’s estimates.All forms of energy development could result in longer-term indirect economic benefits. These projects tend to generaterental, lease and royalty income for property owners, and tax revenue for local governments. They would also generatespending on equipment, supplies, food and lodging.A proposed 300-megawatt Desert Wind project in Eastern North Carolina would also follow a similar pattern in termsof economic benefits. According to Paul Copleman, a spokesman for the Iberdrola wind developer, this project wouldproduce similar economic activity as a 304-megawatt wind farm recently completed in Ohio. The $600 million Ohioproject had 1,200 workers at peak of the construction with an average of 500-plus workers over an 18-monthconstruction period. A wind farm of that size would require a permanent team of 15 to 20 people for monitoring andmaintenance.For the solar farm project, at least two-third of the workers - consisting of engineers, mud loggers, drillers, derrickhandlers and tool pushers - would come in from outside of the state. There will also be ample work for handymen,electricians, truckers, asphalt pavers, deck hands, surveyors, yard workers and cement-pouring operations. According toSteve Heron, South region exploration manager of Cabot Oil & Gas, a drilling project of that size (368 wells) would requirea permanent crew number about 36 people.“The time for further delay is over. It’s time to get off the sidelines and allow the states to exert the leadership thatwill create thousands of jobs, reduce America’s dependence on Middle Eastern oil and protect the environment”~Pat McCrory, Governor of North CarolinaWind Farm WorkWhat Types of Workers are Needed?
  13. 13. Trend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 13North Carolina: Energy Sector Creating Employment Boom for TempsAt Strata Solar, one of the largest solar developers, local residents perform most fieldwork. Workers are trained within afew days and paid $12 per hour on average.The company currently has 450 assemblers and installers at various sites, with plans to double the amount of contractorsthis summer. According to the company spokesman, Blair Schoof, Strata Solar has enough projects upcoming to employhundreds of workers through 2018.At one of the projects under construction, a 5-megawatt solar form, there are about 50 temporary contractors currentlyworking in racking, modeling, panel installation, operating equipment and electrical capacities. Their pay ranges from $9to $18 per hour based upon responsibility and experience. How Much is the Pay?
  14. 14. MethodologyTrend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 14http://www.bloomberg.com/news/2013-05-10/temporary-workers-near-u-s-record-makes-kelly-a-winner.htmlhttp://www.wtsp.com/news/national/article/314658/81/Economy-gains-165000-jobs-jobless-rate-75http://www.staffingindustry.com/Research-Publications/Daily-News/US-Forecast-Staffing-industry-to-grow-6-in-2014-25294http://www.jsonline.com/business/qps-survey-says-hiring-will-pick-up-in-next-3-months-549oiaf-205269221.htmlhttp://www.staffingindustry.com/site/Research-Publications/Daily-News/Survey-46-percent-of-Midwest-employers-to-hire-25543https://www.elance.com/q/online-employment-reporthttp://www.staffingindustry.com/site/Research-Publications/Daily-News/US-temp-jobs-total-climbs-in-April-25618http://beta.bls.gov/maps/cew/ushttp://www.bls.gov/news.release/empsit.nr0.htmhttp://www.nytimes.com/2013/04/26/business/economy/fewer-layoffs-but-employers-are-still-hesitant-to-hire.html?partner=socialflow&smid=tw-nytimesbusiness&_r=1&http://www.foxbusiness.com/news/2013/05/02/us-layoffs-drop-23-in-april-from-march/http://www.mondaq.com/unitedstates/x/237020/Health+Safety/OSHA+Announces+Initiative+For+The+Protection+Of+Temporary+Workershttp://www.osha.gov/pls/oshaweb/owadisp.show_document?p_table=NEWS_RELEASES&p_id=23994http://openchannel.nbcnews.com/_news/2013/01/06/16353344-temp-employees-more-likely-to-succumb-to-workplace-hazards?litehttp://www.charlotteobserver.com/2013/05/03/4020598/ncs-new-energy-economy-temporary.html#storylink=cpyhttp://www.bizjournals.com/triangle/blog/2013/05/mccrory-pushes-nc-energy-exploration.htmlhttp://www.news-record.com/home/1137355-63/temp-jobs-increase-in-triad#continuehttp://www.reuters.com/article/2013/05/01/us-usa-economy-idUSBRE93P04P20130501http://beta.bls.gov/maps/cew/US?period=2012-Q3&industry=10&pos_color=blue&neg_color=orange&Update=Update&chartData=3&ownerType=5&distribution=Quantileshttp://www.bls.gov/news.release/cewbd.t01.htmhttp://www.ows.doleta.gov/press/2013/042513.asphttp://www.bls.gov/news.release/cewbd.toc.htmSources:
  15. 15. About DCR WorkforceTrend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 15DCR Workforce is an award winning, best-in-class service provider for contingent workforce and servicesprocurement management. Our proprietary SaaS platform (SMART TRACK) assists in providing customizable VMSand MSP Solutions to manage, procure and analyze your talent with complete transparency, real-time 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 information about DCR Workforce and its Forecasting Toolkit (Rate, Demand, Supply and Intelligence)including Best Practice Portal, visit dcrworkforce.comFor more information call +1-888-DCR-4VMS or visit www.dcrworkforce.comPublic Relations:Debra Bergevine508-380-40397815 NW Beacon Square Blvd. #224 Boca Raton, FL 33487debra.bergevine@dcrworkforce.com | sales@dcrworkforce.com | marketing@dcrworkforce.comwww.dcrworkforce.com | blog.dcrworkforce.comfacebook.com/DCRWorkforce linkedin.com/company/dcr-workforce twitter.com/DCRWorkforce© 2012 DCR Workforce, Inc. All Rights Reserved. DCR Workforce and Smart Track are Registered Trademarks. CCO — 082912

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