DCR Trendline July 2013 – Contingent Worker Forecast and Supply Report

“ “It’s already the third quarter of 2013! As we enter the second half of the year, TrendLine again brings you key insights into the temporary staffing industry. Our thorough research on current trending themes and current events, along with our in depth analysis of contingent worker supply and demand gives you a pulse of the market.

Our first piece, the DCR National Temp Wage Index, is a statistical tool designed to analyze wage trends for contingent workers; and we analyze the figures further to provide you with reasons for market standing by relating them to current events and developments. This month, we pay particular attention to temp hiring trends and the most recent Bureau of Labor Statistics (BLS) figures. Keep an eye out for our chart on employment trends by industry.

The next article takes an international perspective, examining sentiments towards employment on a global scale. While most of the world has mixed feelings towards employment growth, the Americas might surprise you.

We then delve into the hot-button topic of paid sick leave in the United States. Our analysis looks at both sides of the debate, amplified with real numbers from the Labor Department. Our concluding article this month is close to the hearts of our researchers, as they hone in on the significance of big data in workforce management. Look for our profiling of one of the leading big data technologies.

Ammu WarrierAmmu Warrier, President

Inside this IssueNote from the Editor

DCR National Temp Wage Index

The Global Employment Sentiment

Paid Sick Leave: Productivity Lost or Employee Satisfaction?

Employment Projection in 2013

Big Data in the Workforce: Taming the Data Beast is Crucial for Survival

Methodology

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“Boundaries between extended workers and permanent employees have started to blur and likely will continue to do so” ~David Gartside, Accenture

REPORT # 11 | January 2013

TRENDLINEContingent Worker Forecast and Supply Report

Note from the Editor

Trend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 1

Report # 17 | July 2013

“Despite a volatile economy, the volume of temporary workers continues to increase. This may be partly due to the increasing participation of foreign-born workers, who score high on employability in occupations like production, transportation, material moving, natural resources, construction and maintenance.

In 2012, the median usual weekly earnings of foreign-born full-time wage and salary workers were $625, as compared to $797 for native-born Americans. These lower wages lead to an easily employable population (16.1 percent of the U.S. civilian labor force population are foreign born), possibly leading to negative or slow growth of wages.

Among the foreign-born workers, Asians had an unemployment rate of 5.7% in 2012, substantially lower than the rates for foreign-born blacks (11.1%), Hispanics (9.1%) and whites (7.1%). Among native-born Americans, the jobless rates for blacks (at 14.3%) were higher than the rate for Hispanics (11.5%), Asians (6.7%) and whites (6.6%).

According to the latest report from the Labor Department, the United States added 175,000 jobs in May, compared with 149,000 jobs in April. An ADP survey shows that small businesses added 58,000 jobs in May, up from 32,000 jobs in April – though still below the 129,000 per month average at the start of 2006.



Hiring Outlook Positive““

To meet weekend sales demand and labor cost pressures, Wal-Mart is hiring more and more temp workers. While the company has opened more stores in recent years, their U.S. staffing has remained relatively flat. A survey by Reuters of 52 Wal-Mart stores found that 27 were hiring only temporary workers, while another 20 were hiring a combination of regular full-time and art-time positions along with temp workers. The temporary workers are often being hired on 180-day contracts and are paid the same

According to company spokesperson, David Tovar, nearly 10% of Wal-Mart’s U.S. workforce is temporary (compared with 1 to 2 percent prior to 2013). Wal-Mart CEO, Bill Simons, confirmed the inclusion of more temp workers in the company’s workforce mix, saying “Their hours flex by the needs of the business from time to time.” Industry experts predict that this hiring strategy will save Wal-Mart money by trimming labor costs and also help to shield them against a potential rise in healthcare costs due to the upcoming health care reform.

It remains to be seen if other retailers will follow Wal-Mart’s lead in employing more temporary workers. According to Bureau of Labor Statistics reports, retail employment grew in May of 2013, with 28,000 jobs added, out of which 10,000 were in general merchandise stores.

Temp workforce employment of high-skilled professions, such as doctors, lawyers and university professors, is also on the rise. According to Pam Tolbert, Chair of the Department of Organizational Behavior at Cornell University, the number of professionals employed on a contractual basis is rising. Adjunct professors teach and do research at one institution for years but are not eligible for tenure, a permanent position where a professor cannot lose his job for researching a contentious issue. Tolbert predicts that 40 to 50% of faculty at some institutions is now adjunct.

The Bureau of Labor Statistics reports that there are 3.8 million jobs waiting to be filled, and 40% of them are in the South. This is well below the pre-recession average of 4.5 million openings a month in 2007.

Research from the National Bureau of Economic Research finds that “recruiting intensity” has been low – employers are posting jobs but not proactively trying to fill them.

In the healthcare industry, locum tenens (doctors who work through temp agencies) spending grew 7% to $2.1 billion from 2011 to 2012, according to Staffing Industry Analysts.

starting pay as other workers



Wal-Mart Stores, Inc.: Employment Destination for Temps

Ramp Up in High-skilled Temp Workers

3.8 Million Jobs Waiting to be Filled

“When people think of temp workers they think of blue collar, house cleaners, contractors, etc., but in fact the phenomenon is much more pervasive and growing” ~Pam Tolbert, Cornell University.

“Hiring temps is one strategy that retailers could use to mitigate the potential rise in healthcare costs due to the new healthcare care law. Another strategy could be employing more part-time workers.” ~Neil Trautwein, National Retail Federation

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Unemployment is still high at 7.5% in April, which is 11.7 million people, a ratio of 3.1 job seekers for every opening. The New York Times attributes this to a large problem in the labor market where a persistently weak economy causes employers to be hesitant about adding new workers.

Unemployment Stubbornly High

Number of Unemployed Workers per Job Posting

The hiring rate (number of hires as a percentage of total open-ings), according to BLS figures, remains at 3%. Hiring is greatest in wholesale trade and transportation, warehousing and utilities, professional and business services, education and health services, and health care and social services.

Industry Employment Trends

Change in Employment in April to May 2013

Unpredictability of economic conditions, impact from talent shortages, and the mismatch in required skills and skill availability are all weighing on the minds of employers across the world.

In 17 countries, including Spain, Greece and the United States, hiring intentions strengthened as compared to the previous quarter.

Hiring intentions remained unchanged in four economies and weakened in 21, including France, China and India.

Asia-Pacific is expected to grow across all eight countries, despite India reporting its weakest forecast in eight years and China’s outlook is also at its weakest since Q1 of 2010.

Europe has a mixed employment sentiment, with southern Europe facing major employment challenges. Overall, uncertainty reigns in Europe, as the French economy slips into recession, with Sweden reporting its first negative forecast in four years, and Belgium is at its weakest in over three years. Greece, however, is showing signs of improvement for the fourth consecutive quarter, despite reporting negative hiring intentions, and the United Kingdom is cautiously optimistic with the strongest hiring report since Q3 2008. U.S. employers in all 50 states, Washington, D.C. and Puerto Rico have reported positive hiring plans.

The Global Employment Sentiment


Many states and cities have recently passed regulations requiring employers to provide sick days for workers. New York, the latest region to join such cities as Seattle, Washington D.C., and San Francisco, passed a law this May requiring businesses with over 20 employees to provide five paid sick days beginning April 2014. Businesses with 15 and more workers will have until October of 2015 to comply.

Currently, there are no federal legal requirements for paid sick leave. For companies subject to the Family and Medical Leave Act (FMLA), the Act does require unpaid sick leave however. FMLA provides for up to 12 weeks of unpaid leave for certain medical situations for either the employee or a member of the employee’s immediate family. In many instances, paid leave may be substi-tuted for unpaid FMLA leave.

Paid Sick Leave: Productivity Lost or Employee Satisfaction?


“About one-third of all workers do not have access to paid sick days” ~U.S. Bureau of Labor Statistics““

Paid Sick Leave by Region

Paid Sick Leave by Sector

The legal enforcement of paid sick leaves has prompted a debate among employers, advocates and legislators. Supporters believe that mandatory paid sick leaves will help prevent the spread of diseases by allowing workers who are ill or have a sick child to stay home without the fear of losing wages or a job. Other supporters view the issue as a matter of work-life balance.Some employers oppose the regulations arguing that their costs will increase, resulting in less hiring and possible layoffs. This opposition has even driven some states to overturn paid sick leave laws.

However, according to Eileen Appelbaum, senior economist at the Center for Economic and Policy Research, the offering of paid sick leaves is a one-time cost spike of 2 percent in payroll costs.

According to Steve Wojcik, vice president of public policy for the National Business Group on Health, most large employers already have policies of generous paid leaves. He feels that making it legally mandatory is an unnecessary administrative burden.

Employment Projection in 2013


“Many countries have had a national conversation around ‘How do we make it possible for people to care for kids and the elderly and be productive employees?’ We are having a conversation in this country today that is 40 years overdue. The general attitude here when you say, ‘My kid has a fever’ is: ‘You took the job, you knew you had a kid, you figure out how to get here.’” ~Eileen Appelbaum, Center for Economic and Policy Research“

“Paid Sick Leave by Company Size

Two Opposing Viewpoints



What Does it Mean for Recruiters?

Where is the Gap?

The application of big data in the workforce industry is gaining momentum as the gap between skills required and skills available increases, coupled with the global uncertainty in economic conditions and its impact on both employers and employees.

With increased access to information sharing via social media and a growing number of job portals, the flow of information is more rapid, generating huge volumes of data.

The HR function and the workforce industry, both of which are heavily dependent on skilled workers at a global level, are now starting to look actively at leveraging information regarding hiring and talent decisions from this large mass of data, which increases every day.

Talent information is no longer simply limited to a resume – it has now spread to social sources such as LinkedIn, Facebook, Twitter, personal blogs, websites, and online surveys as well as exchanges of emails, phone calls, etc.

Now a recruiter is in a better position to find talent and conduct a thorough evaluation before deciding to hire. However, this is only possible when all the data elements are arranged in a structured layout available as and when the recruiter needs it.

Getting the required information faster and in a user-friendly format is all about harnessing big data through different ways and means.

A large majority of those employed in Human Resource functions lack the data analytic skills or statistical background needed to sort through and use this large pool of data. Historically, HR and analytics are considered to be separate subject areas, but leveraging usable information from big data requires both skillsets. HR as a function needs to be transitioned from a reactive to proactive stance. In order to gain the maximum benefits from big data, HR should liaison with IT and other groups to meet their analysis requirements or incorporate analytical skills internally to develop matrices and metrics useful for the organization. The active inclusion of big data analysis in the HR function will help HR executives to predict market sentiments and formulate business strategies. While most HR departments rely on skilled team members to conduct predictive analysis, succession planning and other functions, these efforts are almost always focused exclusively on permanent employees, thus omitting a sometime large portion of the workforce.

Where is Data Useful?

Where Do We Stand Now?

Technology Profile



A conventional Human Resource Information System (HRIS) lacks the capability to measure talent or deliver the insights that companies need. Fast and updated hiring information from multiple sources is a huge challenge, requiring a system integration of a traditional HRIS with big data information feeds from multiple sources, along with a fast information-processing infrastructure.

Big data and its impact can be broadly classified into volume, velocity and variety. Big data is a combination of structure and unstructured data, and currently we only look at 10% of the entire population of data (all structured). The ratio of structured to unstructured is 1:9.

Generally, there are four steps to a ‘data to decision’ approach: 1) Acquire 2) Organize 3) Analyze 4) Decide. The most challenging steps are to organize and analyze because the multi-dimensional data from multiple sources needs to be structured for further analysis.

Among the different database systems that handle big data, the open source software framework, Hadoop is a leader for many reasons, including its computational paradigm (MapReduce) and exception distributed file system (HDFS). Hadoop copies multiple replicas of data blocks and distributes them on compute nodes throughout a cluster to enable a rapid and reliable computation of big data. Hadoop can handle all types of data from disparate systems – structured, unstructured, pictures, audio files, email, log files, and more – regardless of native format. In addition, Hadoop has a cost advantage compared to other providers as it is deployed on industry standard servers rather than expensive specialized systems.

Hadoop has grown more rapidly than other big data application frameworks due to its usage by major companies such as Yahoo, Google and IBM, along with mid-level and small startups. Hadoop’s scalable, cost-effective, flexible, and fault-tolerant solution is already changing the dynamics of large scale computing

• A more efficient and data-driven hiring process• Positioning a company to find talent as needed• Finding the right talent in any geography• Determining wages • Background verification through social media • Optimizing the hiring turnaround time

Top Ten Big Data Vendors

Job Trends for Big Data Application Companies

(Source: Indeed.com)

(Source: Forbes)

A recently published Wikibon report, “Big Data Vendor Revenue and Market Forecast, 2012-2017” lists over 60 big data vendors with a 2012 total revenue of over $11 billion. These are the top ten big data vendors that drive a hundred percent of their revenues from big data products and services.



Methodology


Sources

http://www.bls.gov/news.release/forbrn.nr0.htm http://www.chicagotribune.com/business/breaking/chi-walmart-temporary-workers-20130613,0,4015060.storyhttp://www.forbes.com/sites/brucejapsen/2012/05/15/demand-for-temporary-doctors-rises-amid-worsening-physician-shortage-obamacare-looming/http://www.theepochtimes.com/n3/93456-professional-temporary-workers-on-the-rise/http://www.workforce.com/article/20130604/NEWS01/130609992/paid-sick-leave-solving-a-health-issue-or-another-burden-on#http://www.bls.gov/news.release/ebs2.t06.htmhttp://www.indeed.com/jobanalytics/jobtrends?q=Hadoop%2C+mangodb%2C+greenplum%2C+HBase%2C+cassandra&l= http://www.forbes.com/sites/gilpress/2013/02/22/top-ten-big-data-pure-plays/ http://profit.ndtv.com/news/economy/article-hiring-outlook-positive-in-us-weakens-in-india-survey-323252http://www.bigdataconclave.comhttp://www.philly.com/philly/business/small_business/20130617_Businesses_are_hiring_again__but_cautiously__with_eye_on_economy.htmlhttp://www.watchlistnews.com/2013/06/16/retail-hiring-picks-up-in-may-on-hound-com/http://www.bls.gov/news.release/jolts.nr0.htmhttp://www.nytimes.com/2013/06/16/opinion/sunday/dont-blame-the-work-force.html?_r=0http://www.ajc.com/weblogs/biz-beat/2013/jun/14/employers-looking-fill-38m-jobs/http://www.cloudera.com/content/cloudera/en/why-cloudera/hadoop-and-big-data.html

About DCR Workforce


DCR Workforce is an award winning, best-in-class service provider for contingent workforce and services procurement management. Our proprietary SaaS platform (SMART TRACK) assists in providing customizable VMS and MSP Solutions to manage, procure and analyze your talent with complete transparency, real-time control, high performance and decision-enabling business intelligence.

DCR Workforce serves global clientele including several Fortune 1000 companies. Customers realize greater efficiencies; 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.com

For more information call +1-888-DCR-4VMS or visit www.dcrworkforce.com

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DCR Trendline July 2013 – Contingent Worker Forecast and Supply Report

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