DCR Workforce March 2013 Trendline Report


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Contingent Worker Forecast and Supply Report.
Inside This Issue:
DCR National Temp Wage Index
Hopelessly Unemployed: A Missed Population in Calculation
Unemployment Rate Through a Different Perspective
Underemployed College Graduates: A Talent Demand & Supply Mismatch
Health Care Staffing
DCR Survey: Temp Contribution Through Social Media and Crowdsourcing, 2012-13
Social Media Strategy and Metrics & Measurement

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DCR Workforce March 2013 Trendline Report

  1. 1. REPORT # 13 | March 2013 TRENDLINE Contingent Worker Forecast and Supply ReportInside this IssueNote from the Editor 1 Note from the EditorDCR National Temp Wage Index 2 In this edition at the end of the first quarter of 2013, TrendLine once again provides with actionable insights and observations on the contingent staffing industry. As always, we strive toHopelessly Unemployed: A comprehensively analyze the supply and demand of the contingent workforce to give youMissed Population in Calculation 3 predictive analytics and forecasts of wage trends and market standing.Unemployment Rate Through a As usual, our first article this month is the cutting-edge DCR National Temp Wage Index, whichDifferent Perspective 4 hones in on the increasing usage and demand for skilled temporary workers in particular industries. This piece also discusses the growing trend of the permatemp employment model,Underemployed College while, as always, providing you with the wage forecast for temporary workers.Graduates: A Talent Demand &Supply Mismatch 5 We next switch our attention to a very important economic measurement, the unemployment rate, and discuss a large subset of the population that is not included in theHealth Care Staffing 6 calculation – the hopelessly unemployed. We continue this examination in our next piece, titled “Unemployment Rate Through a Different Perspective”, and provides you with an interestingDCR Survey: Temp Contribution angled viewpoint into the status of the United State’s workforce.Through Social Media andCrowdsourcing, 2012-13 8 Continuing our investigation into the unemployed, our next article focuses on college graduates and their search for employment, exploring the discrepancy between supply andSocial Media Strategy and demand. Keep an eye out for our analysis on factors that are influence employment placement.Metrics & Measurement 9 We then switch our focus to the health care industry and their demand for contingentMethodology 10 staffing. We pay particular attention to national health expenditures, especially as it relates to employment. Here, look out for our projections on national health expenditure over theAbout DCR Workforce 11 upcoming years.“ This month, we are excited to share with you the results of DCR Workforce’s exclusive survey of executives at varying levels from several industries. This survey focuses on the usage of social “...job markets across several media for the recruitment of contingent workers. We follow up these interesting results, with sectors are slowly improving our concluding article on social media strategy and metrics, a continuation of piece last month and many are cautiously opti- on the adoption of social media by enterprises. mistic that—unless political or during the months ahead.” “ international events throw the economy into a tailspin—busi- ness conditions will pick up ~ Richard Wahlquist, President and CEO of the American Staffing Association Ammu Warrier Ammu Warrier, President Trend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 1
  2. 2. DCR National Temp Wage IndexThe beginning of the year is the time when companies try to look back to predict the plan for the coming year. Morethan half of the companies have positive hiring sentiment. The Temp workforce will continue to thrive with a 4-5%incremental change from 2012.A large majority of employers have plans to test out the use of contingent workforce during the current year and laterconvert them into permanent employees.Within the temp segment, IT and health care will see a growth as well as continuous demand with 13% and 8%respectively.Nearly 13 million people head to work as temporary and contract employees each year. There are an increasingnumber of areas where the demand for skilled positions is growing much faster than the supply. For example,hospitals and other health care organizations are working hard this year to get qualified talent in the door. Employersare willing to pay higher wages to attract the right candidate.“They started selling this new model of employment, this permatemp model of employment,” Hatton says. “Theystarted trying to convince employers to replace permanent employees with temporary employees.” ““The results of the latest Snapshot indicate greater stability throughout the internationalstaffing sector,” said Antal CEO, Tony Goodwin. “Feedback from our clients across the globesuggests that many are under pressure to do more with fewer resources. Trend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 2
  3. 3. Hopelessly Unemployed: A Missed Population in Calculation “A person can be discouraged for a while, but then gets bumped over into this other cat- egory.” ~ Stephen Bronars, senior economist for Welch Consulting3.247 million of the population is a huge number of people, especially when they are potentially employable. Fallen under anunaccountable category are people who were once part of the working population but lost their job, and were unable to findemployment for a long period of time, leading to them losing hope of finding a job at all. At this later stage, they are no longerpart of the unemployment population calculation.BLS has a separate category for that, called ”labor underutilization”. Underutilized workers and unemployment can be veryeasily be interpreted as same, but the underutilized workers percentage of the total population is much higher than theunemployment percentage.“We have always had a set of people who want a job but for whatever reason are not looking,” said Heidi Shierholz,economist with the Economic Policy Institute. “But this recession was so severe and job opportunities are still so weak, thisgroup is growing because of that.” 14.4% Total force + total employed partmarginally attachedreasons, labor unemployed +all persons time for economic to the as a percent of the civilian labor force+ all persons marginally attached to the labor force 9.3% Total unemployed+ Discouraged workersas Allpercentpersons marginally attached to the labor force, + a other of the civilian labor force plus all persons marginally attached to the labor force 8.4% Total unemployed +plus discouraged workers a percent of the civilian labor force discouraged workers, as 7.9% Total unemployed, as arate) of the civilian labor force (official unemployment percent Possible reasons for this segment of potentially employable population not finding an appropriate job could be: • Faster growing aged population. • Parents taking time off for their family. • College student not able to find a job. Trend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 3
  4. 4. Unemployment Rate Through a Different PerspectivePersons marginally attached to the labor force are defined as those who currently are neither working nor looking for work, butindicate that they want and are available for a job and have looked for work sometime in the past 12 months.Discouraged workers, a subset of the marginally attached, have given a job-market related reason for not currently looking forwork.Persons employed part-time for economic reasons are those who want and are available for full-time work but have had tosettle for part-time employment. Updated population controls are introduced annually with the release of January data. Trend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 4
  5. 5. Underemployed College Graduates: A Talent Demand & Supply MismatchThe rise in the importance of a college education proves the wisdom of Say’s Law that says, “Supply creates its own demand.”Suppose in 1970, a bar owner advertised for a bartender and received 15 applicants, most or all of whom had high schooldiplomas. He would most likely choose the bartender on criteria unrelated to educational credentials. Today, however, if abar owner likewise advertises for a bartender, and gets 15 applicants, it is probable that at least four of them have bachelorsdegrees.Say’s Law is relevant because the supply of college graduates has soared. In 1970, only ten percent of the population over theage of 25 had college degrees; that proportion has nearly tripled to over 30 percent today. The employment population ratio is higher in the case of higher degrees, where the national population of college graduates is relatively higher during the last one year as compared to high school graduates or those with less than high school diploma. Beside there being shortage in jobs, which really requires graduates, there are other factors which influence appropriate placements such as:• Overproduction of graduates with degrees which are not high in demand, such as social work, arts, literature, etc., ascompared with highly-sought after majors such as engineering and economics.• Not all colleges are equal – that is, the typical graduates of elite private schools earn higher wages than graduates of stateuniversities. However, state university graduates still have higher incomes that those attending relatively non-selective privateinstitutions.• Rising college costs and perceived declines in economic benefits may well lead to declining enrollments and market share fortraditional schools, and new methods are developing for certifying occupational competence• Comparing average college and high-school earnings is highly misleading as a guide for vocational success, given the highcollege dropout rates and the fact that the surplus of college graduates lowers recent earnings of those with a higher degree,especially when compared to collage graduates of previous years. Trend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 5
  6. 6. Health Care StaffingU.S. national health expenditures (adjusted for inflation) have grown every year for the last several decades, and in 2011 reached17.9% of the nation’s gross domestic product.In 2011, the three major categories of the healthcare industry - ambulatory services, hospitals, and nursing/residential careemployed 44%, 34%, and 23% of workers in the healthcare industry respectively.Skill shortages are already severe in specific occupations. High in demand resumes belong to those in the fields of radiation,recreational, and occupational therapists, and also physicians, veterinarians, and dentists. The unemployment rate for all ofthese occupations was below 1.0% in 2011, a year in which the overall unemployment was above 8.0%.Healthcare staffing buyers tend to use temporary labor reluctantly, typically only when they can’t find a permanent worker. U.S. health care spending grew 3.9 percent in 2011, reaching $2.7 trillion or $8,680 per person. Trend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 6
  7. 7. Health Care StaffingNational Health Expenditure (NHE) Fact SheetProjected NHE, 2011-2021:• NHE is estimated to have grown 3.9 percent in 2011 and projected to grow an average of 5.7 percent per year over the projection period (2011-2021).• The health share of GDP is estimated to have reached 17.9 percent in 2011 and projected to grow to 19.6 percent by 2021.• Medicare spending is estimated to have grown 6.3% in 2011 and projected to grow an average of 6.1% per year over the projection period.• Medicaid spending is estimated to have grown 6.8% in 2011 and projected to grow an average of 8.2% per year over the projection period.• Private spending is estimated to have grown 1.8% in 2011 and projected to grow an average of 5.3% per year over the projection period.• Spending on hospital services is estimated to have grown 4.3% in 2011, reaching $849 billion. Spending is projected to grow an average of 5.7% per year over the projection period.• Spending on physician and clinical services is estimated to have grown 2.7% in 2011, reaching $529 billion. Spending is projected to grow an average of 5.4% per year over the projection period.• Spending on prescription drugs is estimated to have grown 3.9% in 2009 to $269 billion. Spending is projected to grow an average of 5.8% per year over the projection period.• By 2021, federal, state, and local government health care spending is projected to be nearly 50 percent of national health expenditures, up from 46 percent in 2011, with federal spending accounting for about two-thirds of the total government share. SOURCE: Centers for Medicare & Medicaid Services, Office of the Actuary, National Health Statistics Group; U.S. Department of Commerce, Bureau of Economic Analysis; and U.S. Bureau of the Census. Trend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 7
  8. 8. DCR Survey: Temp Contribution Through Social Media and Crowdsourcing, 2012-13DCR Workforce recently conducted a survey comprised of all segments of industry participation, administered to executives atvarious management and operational levels. The goal of the survey was to monitor the performance of their temporary work-forces over 2012-13 through conventional as well as unconventional recruiting sources.Below are some of the results, looking at overall temporary positions filled, and fill rates by crowdsourcing and social mediarecruiting.Temporary Positions Filled (2012-13) The majority of large compa- nies recruited over 100 tem- porary workers, accounting for greater than 60%, while those recruiting less than 100 work- ers share the remaining 40%. Very few companies fell in the category of recruiting 25 or less contingent workers.Medium and small companies shared almost the same (approximately 50%) category of recruiting less than 25 temporary work-ers, while some companies did not alter their workforce composition ot include contingent workers at all. It seems that noneof the large companies are without at least some temporary staff over the course of 2012, indicating that contingent workerscontinue to gain employment share in some magnitude.The area from “less than 25” Temp Positions Filled by Crowdsourcing (2012-2013)temporary workers to “morethan 100” temporary workers isfilled largely by large companies.Small companies are second inthis aspect, while surprisinglymedium companies seem tohave the lowest usage of crowd-sourcing for recruiting purposes.Temp Positions Filled Using Social Media (2012-13) Recruiting via social media has a similar patter to recruitment through crowdsourcing. Large companies are still reading the race of using unconventional methods of sourcing and find- ing contingent workers, while small companies are starting to adopt usage, and medium-sized companies lag behind.“If you look at the bigger picture…we’re moving towards a new reality in the way we work. A lot of those companies are sittingon a lot of cash, but they’re uncertain with economic stability. They’re looking at contingent and temporary work as more of arisk-management strategy right now. They’re trying to put their toe in the water versus jumping back in with both feet.” ~KathyKane, Senior Vice-President at Addeco Trend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 8
  9. 9. Social Media Strategy and Metrics & Measurement Social media works on a simple Mantra: “Convince and Convert” Social media has revolutionized the transition of communication from the slow-paced conventional one-to-one interaction to a fast-moving many-to-one process. People have limited knowledge regarding their field of application in social media, despite the fact that it is a vast ocean of the information. The movement of information at lightening speeds, with increasing levels of spontaneity, has created a immense pool of discovered and undiscovered information. The wide scope of social media usage can only be channeled and analyzed through a well-planned strategy. For example, it is believed by industry experts that the field of marketing has changed more in the past 5 years than the previous 100 years combined. Deriving an effective social media strategy comprises of 10 major steps: 1. Research your market and audience by listening 2. Share you opinions 3. Set and define your own benchmarks 4. Discover communities or forums to engage in 5. Identify the people who can listen to you or whose though process you can influence 6. Create a strategy for the development of content 7. Select a tool 8. Deliver the content 9. Engage and involve people and influencers in the discussion 10. Measure resultsOf course, that last step of measuring results is more difficult than it seems, given the fast pace and constant evolution of socialmedia. However, social media has its own universal metrics through which it can be evaluated.Measurement is an important 1. Volume (the count of the responses you get)role in the steps for deriving 2. Reach (how deep and wide you can reach people)a solid social media strategy.This is because the field in- 3. Engagement (people getting involved with your brand)volves large volumes of data, 4. Influence (how many people actually can take action on your recommendations)some structured and a lot highlyunstructured. Social media data 5. Share of voice (you versus your competitor)mining and drawing inferences from this data is becoming at the top of a multibillion dollar industry, and accounts for a verychallenging and innovative section of analytics.Big data analysis, Hadoop technologies, deployment of advance algorithm for data mining, and cloud computing are thesupporting technologies for social media. They have emerged and are likely to remain in very high demand in the coming decade. Trend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 9
  10. 10. MethodologyThe DCR Wage Index is developed to assess the relative movements of temporary wage rates in the U.S. economy. Thewage rates for temporary workers or contingent 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 particular month indicates relative wages withthe said baseline and is representative in terms of direction and scale of change. Five years of data has been includedto observe seasonal patterns and distinguish seasonality from long-term wage movements. The data and the model hasbeen further refined over last six months.DCR Wage Index combines the exhaustive data from BLS with practical and more recent developments and data fromon-field consultants and clients, to provide timely near-term indications of trends and consistent long-term actionableand objective information.Source DataDCR Work Index uses multiple economic variables to ensure the robustness of its forecasts and cross-validationof trends.Key data sources and parameters of interest included and influencing the index are:Unemployment dataGross Domestic 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:http://www.npr.org/2013/01/28/170473478/the-ideology-of-the-expendable-employeehttp://emergent.com/blogs.aspx?id=2147484001http://www.bls.gov/news.release/empsit.toc.htmhttp://www.bls.gov/news.release/empsit.t04.htm Trend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 10
  11. 11. About DCR WorkforceDCR 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.com facebook.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 Trend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 11