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Economic Rebound Bolsters Temporary Hiring

With temporary employees, companies would be able to avoid paying for costly benefits, such as health insurance. These skilled workers would come together to form temporary organizations or "virtual companies" that would exist only until a given project was completed.

MIT predicted a date for such a shift as 2015, but some analysts believe that transition has already begun.

Research by Littler Mendelson, a Chicago-based employment and labor law firm, estimates that contingent workers will constitute 50% of the workers hired by companies after the economy recovers. Temporary employees could eventually make up 25% to 35% of the total workforce.

"You are constantly seeing businesses reinvent themselves," says GJ Stillson MacDonnell, a lawyer at Littler Mendelson. "This goes to the fundamental issue of how we produce things. Is there anybody five or 10 years from now who will be correct if they say they are a permanent employee?"

The use of contingency workers on a project-based basis is not a new business model. Littler Mendelson cites Hollywood film production companies as an example. These companies bring together talent from various sectors, from actors to caterers, to complete a specific project. Once a film is completed, they move on to the next available production.

The firm also points to Cox Communication, which assigns much of its infrastructure improvements on a project-based basis. Similarly, Nike (NKE) may design and market its shoes in-house, but most other manufacturing needs have long been outsourced. Though the company has declined to give a definitive tally, analysts estimate that Microsoft (MSFT) has as many as 88,000 contingent workers who supplement its more than 96,000 traditional employees.

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