Economists say role in workforce for contingent labor is shifting

Will the post-recession U.S. workforce contain a larger number of contingent workers?

That’s the thinking among some economists and other labor experts.

“Normally when temporary hiring increases, you would expect permanent hiring to come close behind,” said Pearl Kamer, chief economist of the Long Island Association. “I don’t think that is going to happen in this recovery.”

She reasons that employers aren’t certain the nascent economic recovery, with increased consumer and business spending, is sustainable. And global competition will prompt employers to rethink their hiring plans.

“The labor market that emerges will be structurally different,” Kamer said. “Contingent workers will play a much larger role.”

And the contingent jobs will run the gamut from temporary sales people to temporary scientists and chief executives, she said.

Kamer’s assessment jibes with a new report from the San Francisco-based employment law firm Littler Mendelson, which predicts that contingent labor could soon account for as much as 30 percent to 50 percent of the entire U.S. workforce, up from the current, 1.6 percent, according to Challenger, Gray & Christmas, the Chicago outplacement firm, quoting the report, which appeared today in the trade publication Workforce Management,

After falling to 1.7 million during the recession, the number of Americans employed by the temporary staffing industry has grown by more than 300,000 over the last six months to a March total of 2 million, Challenger Gray said.

Kamer said a larger contingent workforce will have all sorts of implications for employees. They will face a decline in both benefits and job security, she said.
“The onus will be on individuals to really finance their own retirement,” she said.

It’s too soon to tell if the recent increase in contingent workers, is simply part of typical post-recession staffing strategies, which tend to favor temporary workers, or part of a larger shift toward greater dependence on these workers, Challenger Gray said.

At some point, the data will paint a more definitive picture.

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