This past March I attended the annual Staffing Industry Analysts Executive Forum in Lake Las Vegas. There were roughly 700 people in attendance.

A few major and/or re-occurring themes about the contingent workforce:

• The only constant is change.
• The economy for the next 3-9 months is going to be tight. The buzzword of “recession” came up frequently…with no real agreement on whether we’re going into one, in one already, or already in recovery…
• The war for talent is very real, and will only get worse as the Boomers retire in greater numbers. Finding and retaining the best talent will be highly strategic for both staffing firms and their clients.
• Buyers of contingent workers are getting more sophisticated. There is a growing influence of Procurement in the process.
• The contingent workforce is a vital component of total workforce planning
• There are many components to the “contingent workforce” from clerical staffing all the way up to professional niches.
• The greatest need for talent will be in the professional sector. This is where the M Squared value proposition fits into demand.
• Legislation surrounding contingent workers will become more complex.
• The contingent workforce management industry needs to better represent the “free agent” as a legitimate force in the workplace. A key component of this is to lobby for portable healthcare.

Two sessions of particular note:

Barry Asin (EVP and Chief Analyst at Staffing Industry Analysts)

He gave the opening keynote session. The major takeaways were:

• The changing economy, political climate, business models, globalization, buying habits all impact the industry.
• US temporary help payrolls are down 3.9% on a year-over-year basis. There are large geographic differences (weaker on East Coast, stable to increased in Mid West and West.)
• New unemployment claims are near all-time lows. Overall, the unemployment rate is around 4.8%…near historic lows, and almost at full employment when you consider that portion of the “workforce” which has no intention of working. New college graduate unemployment is at 2.1%…essentially fully employed.
• Direct hire is projected to be flat, and retained executive search will continue to be strong.
• Staffing stocks have bottomed out (this is interesting when you consider the generally accepted truth that staffing is a leading indicator of a recession and of a recovery).
• SIA is projecting flat industry growth for rest of 2008 as the economy continues to digest the financial sector turmoil and skirt/recover from a recession. (The topic of recession was a hot button…the truth is that economists generally can’t tell if we are in a recession until after it is over).
• Vendor Management Systems (VMS) usage is projected to increase from 34% to 55% in 2009 (among employers with 1000+ FTE’s)
• The US represents 1/3 of global $235B spend on contingent labor
• Uncertainty is a driver of growth for the industry. The central value proposition is workforce flexibility!
• Increasing trend towards professional skills. It was 30% of contingent spend in 1990. 57% in 2007.
• Legal, healthcare, Finance, IT, Engineering are the toughest recruiting sectors. They also represent the biggest growth opportunities.

Robert Reich (former Secretary of Labor in the Clinton administration and current professor of Economics at UC Berkeley)

In addition to being the shortest speaker (well under 5ft) Secretary Reich was by far the most engaging, funny, and relevant speaker at the conference. Takeaways from his keynote:

• He was not optimistic that we’ll skirt a recession. Having said that, he acknowledged that we may already be through the worst of it and already into a slow recovery.
• We are experiencing the effects of a classic “demand-side” recession: consumers are holding back. Consumers represent 70% of the US economy. Zero personal savings rate and spending beyond means (largely by tapping home equity) are the foundations for the current economic crisis.
• The good news is that global consumer demand will help us recover. Our exports are becoming relatively cheaper. This will help drive the recovery, although it won’t help Americans go to Europe on vacation.
• The Fed will continue to lower interest rates. In his opinion, more stimulus is going to be required.
• Globalization is going to be “the” big economic trend in the next decade (and for the next president).
• Our challenge (and opportunity) is education and innovation. The US economy will never again win based on cost of labor. The talent of the US workforce is key. Innovation is the driver.
• Medicare (not Social Security) is the big, looming, crisis as the Baby Boomers continue to retire. This will be another huge issue for the next occupant of the Whitehouse.
• The long-term trends point to a growing contingent workforce. Variable labor costs for companies, more control for individuals. This heavily favors the industry.

This entry was posted by Kimball Norup on Tuesday, May 6th, 2008 at 2:49 pm in Contingent Workforce Management, Flexible Workforce, The War for Talent. You can leave a response, or trackback from your own site.