Contingent Staffing

According to the National Association of Temporary Staffing Services (NATSS), temporary employment as a percentage of the total US workforce has grown every year since 1992, with some commentators asserting that contingent workers comprise as much as 30% to 40% of the total workforce. 

• Effective Restraints On Labor Costs.  Businesses are experiencing additional competitive pressures in the global marketplace.  Because of this, businesses cannot afford to pay wages to workers for whom there are no productive work assignments.  A recent study demonstrates that 90% of Fortune 500 companies utilize contract or temporary staff augmentation in some capacity. 
   

• Try-before you buy.  Hiring the right people is the key to success.  Prior to making a major financial commitment to a potential employee, businesses often want to work with that person on a temporary basis for a specified time period before formally hiring the candidate as a permanent employee.  In these cases, a staffing firm will employ the candidate for that time period, and the decision to hire directly is then made by the business.  This “try-before-you-buy” alternative is very useful to businesses as a tool for targeting the most effective and productive personnel for the permanent labor force. 
   

• Employee Benefits.  Many businesses who offer employee benefits packages to their permanent staff must make the same benefits packages available to their short-term staff.  Allowing a staffing company to employ the temporary staff can save substantial benefits dollars for a business. 
   

• Unemployment Costs.  Businesses that employ staff with a high turnover of a portion of their labor force can quickly incur dramatic increases in unemployment insurance cost. Unemployment claims filed by terminated employees can permanently affect the unemployment cost of a business.