Economic Rebound Bolsters Temporary Hiring
CHICAGO (TheStreet) -- Already faced with shrinking benefits, a lack of job stability and the demise of pension plans, full-time employees may be on their way to becoming an endangered species.
A theorized corporate shift from a permanent workforce to a network of project-based freelancers has created a buzz among economists and financial analysts. Earlier this month, BusinessWeek weighed in on the matter with a cover story entitled "The Disposable Workforce."
A sea change in how companies hire employees may not seem so imminent based on recent employment statistics. According to the U.S. Census Bureau, third-quarter revenue for the employment services industry was down 7% from the same time a year earlier. Staffing Industry Analysts (SIA), a provider of information about the contingent workforce, projects that total staffing industry revenue declined 26% from 2009 to 2008.
If past history is any indication, that downward trend could reverse course as scaled-back businesses shake off the economic slump.SIA data shows that employer spending on contingent labor spikes following recessions. In 2000, companies spent $81.5 billion on temporary labor. That number decreased between 2001 and 2003 as the economy declined to as low as $73.3 billion. By 2006, spending not only recovered, it increased to $95 billion. Theories about such a redefinition of the workplace are nothing new. Back in 1994, a study by the Sloan School of Management at the Massachusetts Institute of Technology predicted that companies would downsize their traditional workforces and supplement them with larger networks of contingent workers.
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