DCR Trendline September 2013 – Contingent Worker Forecast and Supply Report

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As we approach the final quarter of 2013, Trendline is here once again to bring you key
insights into the temporary staffing industry. Our up-to-date research and in-depth analysis of
industry trends ensure that you have a pulse of the market. Rigorous examination of contingent
workforce supply and demand provides you with predictive forecasts of wage trends and
market status.
The DCR National Temp Wage Index focuses on wage trends over the year and analyzes the
usage of temp workers and related developments in the economy. This month, we look at the
significant recovery of the temporary help services sector as compared to the country’s overall
employment index. We also discuss the hot industries for employment today.
Our next article researches the trends and factors that are driving a new human capital model
that companies are turning towards – the open talent economy.
We then shift our focus to a topic on everyone’s mind – the upcoming Affordable Care Act
mandates. In this segment we explore the penalties that companies may face if they fail to
comply with the regulations. Keep an eye out for the impact of the definition of “employee” and
what this may mean for organizations that engage contingent workers.
Our final article this month throws the spotlight on the new generation of workers – the
Millennials. We closely analyze what drives these workers, and why this makes them a great fit
for temp employment.
Ammu Warrier
Ammu Warrier, President
Inside this Issue
Note from the Editor
DCR National Temp Wage Index
The New Employment Model: Open
Talent Economy
ACA:Fewerthan95%=95%Penalty
Millennials: Who are they? And Why
They Make Great Temp Workers?
Methodology
1
2
5
9
11
15
“The trend that we’re seeing
is that they’re not really tem-
porary anyway. It’s not just a
situation anymore where you
have some peak need period
and you want to bring in extra
help to supplement your normal
workforce. What we’re seeing
is that temp help workers are
being used year-round. They’re
part of the standard workforce”
~Patrick Reilly, District Director,
Wage and Hour Division of the
U.S. Department of Labor
REPORT # 18 | September 2013
TRENDLINEContingent Worker Forecast and Supply Report
Note from the Editor
Trend Line: Contingent Worker Forecast and Supply Report. © DCR. All Rights Reserved - 1

For the rest of 2013 we expect to see a promising upward trend for temporary worker wages. Year-over-year, the
temporary help services category has seen the largest growth in the economy at 6.7% compared to other sectors.
Temp help services is one of the largest contributors to professional and businesses services, a category that has grown
significantly at 3.5%.
Powerful Recovery of Temp Workforce Bypassing Overall Employment Index
Total nonfarm payroll employment increased by 162,000 in July. Unemployment fell to 7.4% in July from 7.6% in June,
the lowest since December 2008.
Sectors where employment rose include retail trade, food services, financial activities and wholesale trade. With the
manufacturing industry slowly picking up the pace, other sectors such as construction, wholesale and retail trade,
leisure and hospitality, and mining and lodging have also shown indications of revival.
Month-over-month, full-time employment increased by 92,000 jobs, whereas part-time jobs increased by 174,000.
The number of self-employed jobs also maintained high growth with 241,000 jobs added.
Temporary help services jobs rose by 7,700 in July with a penetration rate of 1.98 percent. The temporary penetration
rate measures temporary employment as a percentage of total jobs in the United States.

The Composition of the Temporary Workforce
Changes in Professional and Business Services Sector
Powerful Recovery of Temporary Help Services
Year-over-Year Changes in Professional and Business Services Employment by State
Changes in the percentage or volume of worker population signify the impact of a particular super sector on the geographic
location. While some states have a noticeable change in volume over the year (in the chart below, the bubble shoes the
relative size of the population), it is not remarkable when taken in conjunction with the percentage change in employed
population.

Hot Industries for Employment
“Major Industries, by Volume and Percentage Growth
The same criteria of year-over-year change in volume and percentage can be used to determine which industries are growing in
employment. Data indicates that professional and business services and leisure and hospitality are the top industries to look at for
employment opportunities.
The fact that temp help services is a major contributor to professional and business services with a 6.7% year-over-year growth
reinforces temp employment becoming a major part of the economy and job market. In the leisure and hospitality sector, the
largest year-over-year change is seen in performing arts and spectator sports employment.

The New Employment Model: Open Talent Economy
HR experts have a new term for the employment model that organizations are shifting towards – the
open talent economy. While the classical employment model relied on HR departments hiring full-time
employees who work eight-hour shifts on location, the new open talent economy model is a collaborative,
technology-enabled, fast-paced way of sourcing workers through networks and communities.
Deloitte coined this term to refer to the currently evolving workforce, which is a “mixture of full-time
employees, contractors and freelancers”. A new generation of workers has a different focus from
generations before them who sought job security and benefits. The worker of today is looking for
freedom, with the ability to shift from role to role and organization to organization without any geographical
boundaries. And global markets and products align to the desires of workers with a need for talent models
that are agile, scalable and fast. Employers are looking for the right skills to be available to them as and when
they need them.
In this article, we explore some of the market trends and factors contributing to the rise of the open-talent
economy.
According to MBO Partners, the number of
freelance workers (both independent
contractors and agency contractors) in the
United States is continuing to increase.
In 2012, there were 16.9 independent
workers in the country, which MBO forecasts
rising to 23 million in 2017 and reaching 65
to 70 million (approximately half of the U.S.
workforce) by 2020.
The growth of online marketplaces that
provide services to connect freelancers with
employers also supports this trend. A report
from the freelance-staffing platform Lance
showed that businesses spent 335 percent
more on network and security jobs through
their services this year than one year ago.
According to a recent survey, 35 percent of freelancers chose to remain independent, as they believe they will
obtain more work taking this route. And 25 percent are attracted to the potential for higher pay.
The Increase of Freelancers
“There’s a very high demand and low supply of the talent that’s required within the workforce. They’ve been
forced to look at other ways to meet that supply.” ~Andrew Liakopoulos, Human Capital Principal at Deloitte.
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The growing ability to digitize many different types of work opens up the opportunity to source skilled
workers from anywhere in the word.
Crowdsourcing is springing up as an alternative channel to source talent. Employers are increasingly
engaginginopen-sourceprojectswhereworkerscontributedifferentskills,information,andinsightstosolving
a wide-range of business problems. Mechanical Turk, a crowdsourcing internet marketplace by Amazon, is
leading the way for a business model where projects are divided into small components, and the work is
executed remotely on a piece, project, or hourly basis.
According to the Labor Department, a record number of 2.7 million workers held temp positions in July,
up from 2.5 million last year. Recent data shows that almost 12% of all employed people in the United
States hold temporary or contractual positions. Experts say that economic uncertainty and a shortage of
consumer demand are just some of the reasons why employers are reluctant to hire full-time employees. The
upcoming health care reform mandates along with the changing talent motivations are causing more
companies to turn to temp workers to fill their talent pools.
Temporary help services sector is growing at a faster pace than any other under professional and business
services. Recruitment agencies remain a popular job source destination for temporary workers. Temp agen-
cies have become some of the largest employers in the country; Kelly Services is second in size to Walmart.
Certain geographical regions in the United States have seen tremendous growth in the num-
ber of temporary workers. Georgia, for example, has seen a 40 percent increase in temp jobs
over the past four years, particularly in information technology positions and office and cleri-
cal help. In New Jersey, where there state’s gross domestic product (GDP) has grown slowly at
1.3 percent compared to the national average of 2.5 percent, employment in the temporary job
market accounted for 15 to 22 percent of gains in the private sector. And according to the U.S. Bureau of Labor
Statistics, Ohio has seen an increase of 43% in temporary staffing employment.
Crowdsourcing Talent
Surge in Temp Employment
“What this is going to start causing is a lot of virtual work. If you hire freelance talent [they] can go through
an entire project without being in the same room together. Creating this collaboration will be a challenge.”
~Andrew Liakopoulos, Human Capital Principal at Deloitte.
“Employers are even more reluctant than usual to commit to full-time employees. They like the flexibility.”
~Harry Holzer, Professor of Public Policy at Georgetown University
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Out of the 162,000 jobs
added to the economy in July,
65 percent were part-time
positions. According to some
analysts, part-time work has
made up approximately 70
percent of job growth so
far in 2013. The Bureau
of Labor Statistics defines
part-time work as being less
than 35 hours per week.
More Part-Time Workers
Professional and Business Services
New Jobs in 2013: Full-Time vs. Part-Time
Source: Mercatus Center at George Mason University

A recent survey by Gallup indicated that 1 out of 5 workers is part-time, and the percentage is ever
increasing. A study by the American Enterprise Institute finds that in the first half of 2013, 4.3 part-time
jobs were created for every one full-time job. The study also shows a 2.7 percent increase in the number of
people working 25 to 29 hours per week.
Experts believe that employers are offering more part-time positions to avoid being hit by the new health
care law that will require them to provide medical coverage for full-time permanent workers. HR analysts
argue that companies are simply getting smarter on evaluating their hiring needs and becoming more
flexible with the composition of their workforces – many companies have come to realize that the
traditional Monday to Friday, 9 am to 5 pm worker model does not fulfill their business needs. Employers are
becoming more sophisticated and savvy about using analytics to forecast their hourly staffing needs, and are
scheduling workers accordingly.
Looking closely at the 195,000 jobs added in June, a total of 75,000 were in the leisure and hospitality sector.
Workers in this sector average about 26.1 hours per week.
With top-level talent increasingly demanding more work-life balance, companies are starting to realize that
workplace flexibility is a solution to meet needs on both sides. HR executives have known for a long time that
the best way to drive productivity is to have happy and engaged workers. Gallup’s 2013 State of the American
Workplace Report showed that only 30 percent of employees are engaged and inspired at work, and 18% are
actively disengaged. These disengaged employees cost the United States up to $550 billion in lost economic
productivity annually.
It has been proved that flexible work options reduce worker absence and turnover. The Bureau of National
Affairs estimates that over $11 billion is lost annually due to turnover.
A 2011 paper by the Global Workplace Analytics and Telework Research Network shows that almost 80
percent of U.S. workers want to work off-site at least part-time and 64 million employees hold a job that can
easily be configured to telework, at least part-time.
From 2005 to 2011, telecommuting grew by 73%, with a 424% growth for federal workers. Based on these
trends, telecommuters are forecasted to total 4.9 million by 2016, a 69% increase from 2011.
According to the study, transforming compatible jobs to telework positions could lead to a national savings
of over $700 billion per year, where a typical business would save $11,000 per person per year. Remote
workers themselves would save between $2,000 to $7,000 per year in transportation and work-related costs,
not including cuts in after-school care and eldercare costs.
A Greater Demand for Workplace Flexibility
The Bottom-Line Impact of Employing Remote Workers
“With recruiting costs running approximately 1.5 times annual salary, the ability to engage and retain valuable
employees has a significant impact on an organization’s bottom line.” ~Bureau of National Affairs.
“
“

ACA: Fewer than 95% = 95% Penalty
Even though the Affordable Care Act (ACA) has delayed its shared responsibility penalties to 2015,
employers need to develop a clear understanding of the mandate and start acting now. Under the new
legislation, employers with 50 or more full-time employees or full-time equivalent employees will be
required to offer at least 95% of their full-time employees (and their dependents) health coverage meeting
government-defined minimum standards. Those who fail to do so must pay employer shared-responsibility
penalties.
For some companies, the “Play or Pay” mandate becomes a question of weighing the cost of either playing
by offering such coverage or paying the penalty, leading to a strategic choice about benefit structure and
workforce composition. The “no coverage” penalty is set at $2,000 per year multiplied by the total number
of full-time employees in excess of 30.
Let’s take a look at an example to demonstrate the possible costs of the penalty. If XYZ Corporation has 100
full-time employees, and provides health coverage for 90 of them; they would be faced with paying the
penalties as they fall below the 95% mandate. The penalty of $2,000 per employee, which in this case would
be 70 (subtracting the thirty not included in the penalty calculation), would equal a total fee of $140,000.
Because penalties can be incurred if an employer does not offer coverage to its full-time employees, it is
important for an employer to identify who its employees are for these purposes. The proposed regulations
implementing the penalty provide that “employee” refers to a common-law employee. The IRS defines the term
worker saying “anyone who performs services for you is your employee if you can control what will be done and
how it will be done.”
To identify which workers are common law employees, the IRS takes the position that determination can only be
made by “examining the relationship of the worker and the business.” To do this, the IRS looks at three aspects
of the relationship:
1) Behavioral Control
A company has behavioral control over a worker when it has the right to direct or control how the worker does
the work, including the types of instruction given, degrees of instruction, evaluation systems and training.
2) Financial Control
A company has financial control over the relationship if the company has the right to control the economic
aspects of the worker’s job.
3) Type of the Relationship
This criterion refers to how the worker and the company perceive their relationship to each other, and involves
written contracts, employee benefits, permanency of the relationship and services provided as a key aspect of
the business.
“73% of employers do not know enough about the play or pay mandate to make an informed decision”
~HR.BLR.com
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ACA: Fewer than 95% = 95% Penalty
This determination of a common-law worker is important for companies that use third-party agencies to handle parts
of their staffing needs. If a company uses a staffing agency, leasing company, or other third-party to secure workers,
it must consider the implications of the new employer penalties. Even though the third-party handles payroll and
benefits and may have initially hired the worker, under the common-law criteria determination, the client company
may be considered the common law employer of the contingent workers.
In the definition of “employee” as set forth by the proposed regulations for the “play or pay” requirement, the
treatment of contingent workers merits special attention. The question is which entity is responsible for offering
coverage – the temporary staffing organization or the client organization. Some issues worth considering are:
A recent survey shows that 45% of surveyed companies are concerned about their staffing suppliers’ ability to meet
their ACA obligations. As for costs, 31% cited non-compliance penalties as their largest concern, while another 31%
were worried about increased administrative burdens.
In order to fully comply with the Affordable Care Act and avoid unnecessary penalties, employers who work with
third-party agencies for staffing needs must look closely at their current workforce composition to make strategic
preparations for when ACA goes into full effect.
• How are the contingent workers likely to be classified?
Looking at the criteria set by the IRS for identifying a common-law employee can help companies assess
which contingent workers would likely be classified as a common-law employees of the client company versus
the third-party.
• Terms of the contingent worker agreement
Companies and staffing agencies both will want to consider the “play or pay” requirement when negotiating
the terms of the contingent worker agreement, to minimize potential exposure and assign clear responsibili-
ties.
• Full-time employee reporting requirements
Beginning in January of 2016, employers will be required to report to the IRS who their full-time employees
were in prior calendar years and whether they were offered health coverage.
• Rehired Retirees
Often, a company’s retirees are rehired through a third-party process, thus possibly making them common-
law employees. Companies need to look at their retiree plans to determine how to classify and cover these
workers.
What This Means for Companies Who Engage Contingent Workers
“The Affordable Care Act is a perfect example of how companies can be affected by the different types of
relationships, from full-time to part-time to contracting.” ~Stephan Millard, Vice-President of Ventana Research.
“
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Being the first generation to have been immersed in technology throughout their lives, these workers are constantly
connected. Baby Boomers and Gen Xers wanted job security, while Millennials seek flexibility. These workers seek
more than just income and have a higher focus on personal enrichment and work-life balance. A recent study by
Mercer found that top three career priorities for Millennials are compensation, flexible work schedules and the
opportunity to make a difference.
The values of this generation also vary. A comparison of views on factors that indicate career success differed greatly
between Millennial workers and their older generation managers. While the workers viewed meaningful work as the
most important factor to career success, managers pointed to high pay as the key indicator.
The U.S. Bureau of Labor Statistics defines “Millennials” as the nearly 80 million young adults born between 1977 and
1999, who are already starting to join the workforce. Analysts estimate that by 2014, 36 percent of the U.S. workforce
will be made up of this generation of workers, and this number will grow to 46 percent by 2020.
With this new generation poised to comprise a large portion of the country’s workforce, HR departments are starting
to delve into what the values, desires and needs of these workers are, and how to keep them engaged.
What are Millennials Looking for in the Workplace?
Millennials: Who are they? And Why They Make Great Temp Workers?
“Millennials are described as an ethnically diverse generation who are team-players, optimistic, confident,
trusting of authority, rule-followers, achievers in school, and generally achievement-oriented in everything they
undertake. They are also the most affluent and well-educated generation in history.” ~Center for Work and
Family at Boston College.
“
“
What do Millennials Want from Employers?
Source: Boston College

“Differences in Work Habits”
View of Factors that Indicate Career Success: Millennials vs. their Managers
Source: University of North Carolina, Kenan-Flagler Business School
Source: Forbes
A survey conducted by Harris Interactive for CareerBuilder in 2012 reveals disparities in the work habits and
preferences of those workers aged 25 to 34 compared to those 55 and older. The findings indicated that Millennials are
more impatient about career advancement or switching jobs, are more open to flexible work schedule, are disciplined
about their work, and prefer shorter working hours.
A survey by Harris Interactive for the University of Phoenix discovered that roughly 80 percent of workers aged 20
to 29 said they wanted to change careers. And MSN Money reported that 53% of Millenials are not engaged in their
current jobs.
Face to face
Stay in a job for at least 3 years
E-mail/Text
Stay in a Job Until You Learn Enough to Move Ahead
Should Be Promoted Every 2-3 Years
Work 8 Hours or Less per Day
Arrive Before 8 AM
Leave by 5 PM
Work after Leaving the Office
Arriving on Time Does Not Matter as
Long as Work Gets Done
28%
38%
35%
47%
Phone 12%
43%
58%
53%
41%
62%
20%
10%
61%
64%
43%
38%
69%
29%
Communication
Style Preference
Perspective on
Career Path
Hours of
Work
{
{
{
60%
62%
Ages 55+ Ages 25 to 34
55%
53%

Based on the workplace characteristics and values of Millennials, they’re a great fit for the growing trend of
temporary employment. Their choice of job type and availability indicates a huge potential towards their interest in
joining the temporary workforce.
Economic factors also steer Millenials to seek temporary work assignments. Often, due to their young age and
lower level of experience, Millennials are among the first to be eliminated during company downsizing. The
unemployment rate for the generation is 11% as compared to the national unemployment rate of around 7%. And with
their substantial student loan debt (the U.S. Census Bureau estimates that graduates of the class of 2011 had an
average debt of $27,547), it’s no wonder they’re looking for those temporary positions where they have a higher
earning potential.
Millenials Make Great Temp Workers
You can choose your time and work bothIndependence in choosing the work
You can have more than one positionMultiple earning sources
Companies are looking for motivated ready-to-use talentAbility to use their self-starter mentality
Temporary Jobs OfferMillennials Want
You choose what suits your interestMeaningful work

Millennials Unemployment Trends
What Does this Mean for Employers?
Temporary work provides these workers with a source of income, while allowing them to build their resumes with
work experience and skills. Also, the nature of temporary positions allows Millennials to enjoy the work-life balance,
flexibility and freedom that they seek in a job.
Deloitte, in a 2013 study, found that 34 percent of U.S. employees are planning on postponing their retirement
age. The combination of an aging workforce still actively employed and an influx of new younger talent means that
employers need to find a way to continue to derive value from older workers without holding the younger workers
back.
With over 80 million Millenials entering the workforce, companies have to learn how to recruit, grow, and train these
workers. And given the importance of the contingent workforce, employers must understand how they can address
the needs of Millennials, who are looking for greater flexibility in their schedules and career paths, while still meeting
business needs. Leveraging Millennials as contingent workers can provide companies with more control over variable
costs, and enable a flexible and dynamic workforce that can be scaled up or down to meet their evolving needs.

Methodology
The DCR Wage Index is developed to assess the relative movements of temporary wage rates in the U.S. economy. The wage rates for temporary
workers or contingent workforce are based on payments made by staffing firms to these workers based upon hours worked. Data collected from
sources such as Bureau of Labor Standards (BLS) and other government sites as well as an internal pool of staffing companies and consultants, is
aggregated and classified based on regions and skill categories, to arrive at an aggregate index.
The baseline for the index is set at 100 for January 2007. Index value for a particular month indicates relative wages with the said baseline and
is representative in terms of direction and scale of change. Five years of data has been included to observe seasonal patterns and distinguish
seasonality from long-term wage movements. The data and the model has been further refined over last six months.
DCR Wage Index combines the exhaustive data from BLS with practical and more recent developments and data from on-field consultants and
clients, to provide timely near-term indications of trends and consistent long-term actionable and objective information.
Source Data
DCR Work Index uses multiple economic variables to ensure the robustness of its forecasts and cross-validation of trends.
Key data sources and parameters of interest included and influencing the index are:
Unemployment data
Gross Domestic Product
Prime rate of interest
New and seasonal Job openings
Non Form employment
Job Opening
All Export
All Import
Average Hourly Earnings of All Employees Total Private
Aggregate consultant data on job market parameters
References
http://dupress.com/articles/the-open-talent-economy/
http://articles.washingtonpost.com/2013-08-06/business/41149583_1_freelancers-tech-work-demand
http://www.deloitte.com/view/en_US/us/Services/consulting/human-capital/268bfb80ddbcd310VgnVCM2000003356f70aRCRD.htm
http://money.cnn.com/2013/08/01/news/economy/temp-jobs/index.html
http://www.gpb.org/news/2013/07/22/ga-sees-more-temp-workers#
http://www.nj.com/business/index.ssf/2013/08/new_jerseys_jobs_recovery_fuel.html
http://www.huffingtonpost.com/2013/08/03/part-time-work-july-jobs_n_3700930.html
http://mercatus.org/publication/part-time-nation
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Employee-(Common-Law-Employee)
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-Contractor-(Self-Employed)-or-Employee%3F
http://www.huffingtonpost.com/sara-sutton-fell/workplace-flexibility_b_3691043.html
http://www.globalworkplaceanalytics.com/telecommuting-statistics
http://sas-wsj.com/ad/article/productivity-contingent
http://www.kenan-flagler.unc.edu/executive-development/custom-programs/~/media/DF1C11C056874DDA8097271A1ED48662.ashx
http://www.usatoday.com/story/money/personalfinance/2013/06/30/student-loan-debt-economic-effects/2388189/
http://www.deloitte.com/assets/Dcom-UnitedStates/Local%20Assets/Documents/Consulting/us_cons_TopFiveRewardsSurvey2013_030813.pdf
http://www.phillyburbs.com/news/local/burlington_county_times_news/temp-agencies-defend-their-role-in-new-economy/
article_297a01c2-034c-5cd8-9bf8-49685d20c9ac.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
Public Relations:
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508-380-4039
7815 NW Beacon Square Blvd. #224 Boca Raton, FL 33487
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DCR Trendline September 2013 – Contingent Worker Forecast and Supply Report

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DCR Trendline September 2013 – Contingent Worker Forecast and Supply Report