REPORT # 13 | March 2013

TRENDLINE
Contingent Worker Forecast and Supply Report

Inside this Issue

Note from the Editor DCR National Temp Wage Index 1 2

Note from the Editor

In this edition at the end of the first quarter of 2013, TrendLine once again provides with actionable insights and observations on the contingent staffing industry. As always, we strive to comprehensively analyze the supply and demand of the contingent workforce to give you predictive analytics and forecasts of wage trends and market standing. As usual, our first article this month is the cutting-edge DCR National Temp Wage Index, which hones in on the increasing usage and demand for skilled temporary workers in particular industries. This piece also discusses the growing trend of the permatemp employment model, while, as always, providing you with the wage forecast for temporary workers. We next switch our attention to a very important economic measurement, the unemployment rate, and discuss a large subset of the population that is not included in the calculation the hopelessly unemployed. We continue this examination in our next piece, titled Unemployment Rate Through a Different Perspective, and provides you with an interesting angled viewpoint into the status of the United States workforce. Continuing our investigation into the unemployed, our next article focuses on college graduates and their search for employment, exploring the discrepancy between supply and demand. Keep an eye out for our analysis on factors that are influence employment placement. We then switch our focus to the health care industry and their demand for contingent staffing. We pay particular attention to national health expenditures, especially as it relates to employment. Here, look out for our projections on national health expenditure over the upcoming years. This month, we are excited to share with you the results of DCR Workforces exclusive survey of executives at varying levels from several industries. This survey focuses on the usage of social media for the recruitment of contingent workers. We follow up these interesting results, with our concluding article on social media strategy and metrics, a continuation of piece last month on the adoption of social media by enterprises.

Hopelessly Unemployed: A Missed Population in Calculation 3 Unemployment Rate Through a Different Perspective Underemployed College Graduates: A Talent Demand & Supply Mismatch Health Care Staffing DCR Survey: Temp Contribution Through Social Media and Crowdsourcing, 2012-13 Social Media Strategy and Metrics & Measurement Methodology About DCR Workforce 4

5 6

8 9 10 11

...job markets across several sectors are slowly improving and many are cautiously optimistic thatunless political or international events throw the economy into a tailspinbusiness conditions will pick up during the months ahead. ~ Richard Wahlquist, President and CEO of the American Staffing Association

Ammu Warrier

Ammu Warrier, President

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DCR National Temp Wage Index

The beginning of the year is the time when companies try to look back to predict the plan for the coming year. More than half of the companies have positive hiring sentiment. The Temp workforce will continue to thrive with a 4-5% incremental change from 2012. A large majority of employers have plans to test out the use of contingent workforce during the current year and later convert them into permanent employees. Within the temp segment, IT and health care will see a growth as well as continuous demand with 13% and 8% respectively. Nearly 13 million people head to work as temporary and contract employees each year. There are an increasing number of areas where the demand for skilled positions is growing much faster than the supply. For example, hospitals and other health care organizations are working hard this year to get qualified talent in the door. Employers are willing to pay higher wages to attract the right candidate. They started selling this new model of employment, this permatemp model of employment, Hatton says. They started trying to convince employers to replace permanent employees with temporary employees.

The results of the latest Snapshot indicate greater stability throughout the international staffing sector, said Antal CEO, Tony Goodwin. Feedback from our clients across the globe suggests that many are under pressure to do more with fewer resources.

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Hopelessly Unemployed: A Missed Population in Calculation

A person can be discouraged for a while, but then gets bumped over into this other category. ~ Stephen Bronars, senior economist for Welch Consulting

3.247 million of the population is a huge number of people, especially when they are potentially employable. Fallen under an unaccountable category are people who were once part of the working population but lost their job, and were unable to find employment for a long period of time, leading to them losing hope of finding a job at all. At this later stage, they are no longer part of the unemployment population calculation. BLS has a separate category for that, called labor underutilization. Underutilized workers and unemployment can be very easily be interpreted as same, but the underutilized workers percentage of the total population is much higher than the unemployment percentage. We have always had a set of people who want a job but for whatever reason are not looking, said Heidi Shierholz, economist with the Economic Policy Institute. But this recession was so severe and job opportunities are still so weak, this group is growing because of that. unemployed +all persons to the 14.4% Total force + total employed partmarginally attachedreasons, labor time for economic as a percent of the civilian labor force+ all persons marginally attached to the labor force

+ other 9.3% Total unemployed+ Discouraged workersas Allpercentpersons marginally attached to the labor force, a of the

civilian labor force plus all persons marginally attached to the labor force

discouraged workers, as 8.4% Total unemployed +plus discouraged workers a percent of the civilian labor force percent 7.9% Total unemployed, as arate) of the civilian labor force (official unemployment

Possible reasons for this segment of potentially employable population not finding an appropriate job could be: Faster growing aged population. Parents taking time off for their family. College student not able to find a job.

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Unemployment Rate Through a Different Perspective

Persons marginally attached to the labor force are defined as those who currently are neither working nor looking for work, but indicate that they want and are available for a job and have looked for work sometime in the past 12 months. Discouraged workers, a subset of the marginally attached, have given a job-market related reason for not currently looking for work. Persons employed part-time for economic reasons are those who want and are available for full-time work but have had to settle for part-time employment. Updated population controls are introduced annually with the release of January data.

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Underemployed College Graduates: A Talent Demand & Supply Mismatch

The rise in the importance of a college education proves the wisdom of Says Law that says, Supply creates its own demand. Suppose in 1970, a bar owner advertised for a bartender and received 15 applicants, most or all of whom had high school diplomas. He would most likely choose the bartender on criteria unrelated to educational credentials. Today, however, if a bar owner likewise advertises for a bartender, and gets 15 applicants, it is probable that at least four of them have bachelors degrees. Says Law is relevant because the supply of college graduates has soared. In 1970, only ten percent of the population over the age of 25 had college degrees; that proportion has nearly tripled to over 30 percent today. The employment population ratio is higher in the case of higher degrees, where the national population of college graduates is relatively higher during the last one year as compared to high school graduates or those with less than high school diploma. Beside there being shortage in jobs, which really requires graduates, there are other factors which influence appropriate placements such as: Overproduction of graduates with degrees which are not high in demand, such as social work, arts, literature, etc., as compared with highly-sought after majors such as engineering and economics. Not all colleges are equal that is, the typical graduates of elite private schools earn higher wages than graduates of state universities. However, state university graduates still have higher incomes that those attending relatively non-selective private institutions. Rising college costs and perceived declines in economic benefits may well lead to declining enrollments and market share for traditional schools, and new methods are developing for certifying occupational competence Comparing average college and high-school earnings is highly misleading as a guide for vocational success, given the high college dropout rates and the fact that the surplus of college graduates lowers recent earnings of those with a higher degree, especially when compared to collage graduates of previous years.

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Health Care Staffing

U.S. national health expenditures (adjusted for inflation) have grown every year for the last several decades, and in 2011 reached 17.9% of the nations gross domestic product. In 2011, the three major categories of the healthcare industry - ambulatory services, hospitals, and nursing/residential care employed 44%, 34%, and 23% of workers in the healthcare industry respectively.

Skill shortages are already severe in specific occupations. High in demand resumes belong to those in the fields of radiation, recreational, and occupational therapists, and also physicians, veterinarians, and dentists. The unemployment rate for all of these occupations was below 1.0% in 2011, a year in which the overall unemployment was above 8.0%. Healthcare staffing buyers tend to use temporary labor reluctantly, typically only when they cant find a permanent worker.

U.S. health care spending grew 3.9 percent in 2011, reaching $2.7 trillion or $8,680 per person.

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Health Care Staffing

National Health Expenditure (NHE) Fact Sheet
Projected NHE, 2011-2021: NHE is estimated to have grown 3.9 percent in 2011 and projected to grow an average of 5.7 percent per year over the projection period (2011-2021). The health share of GDP is estimated to have reached 17.9 percent in 2011 and projected to grow to 19.6 percent by 2021. Medicare spending is estimated to have grown 6.3% in 2011 and projected to grow an average of 6.1% per year over the projection period. Medicaid spending is estimated to have grown 6.8% in 2011 and projected to grow an average of 8.2% per year over the projection period. Private spending is estimated to have grown 1.8% in 2011 and projected to grow an average of 5.3% per year over the projection period. Spending on hospital services is estimated to have grown 4.3% in 2011, reaching $849 billion. Spending is projected to grow an average of 5.7% per year over the projection period. Spending on physician and clinical services is estimated to have grown 2.7% in 2011, reaching $529 billion. Spending is projected to grow an average of 5.4% per year over the projection period. Spending on prescription drugs is estimated to have grown 3.9% in 2009 to $269 billion. Spending is projected to grow an average of 5.8% per year over the projection period. By 2021, federal, state, and local government health care spending is projected to be nearly 50 percent of national health expenditures, up from 46 percent in 2011, with federal spending accounting for about two-thirds of the total government share.
SOURCE: Centers for Medicare & Medicaid Services, Office of the Actuary, National Health Statistics Group; U.S. Department of Commerce, Bureau of Economic Analysis; and U.S. Bureau of the Census.

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DCR Survey: Temp Contribution Through Social Media and Crowdsourcing, 2012-13
DCR Workforce recently conducted a survey comprised of all segments of industry participation, administered to executives at various management and operational levels. The goal of the survey was to monitor the performance of their temporary workforces over 2012-13 through conventional as well as unconventional recruiting sources. Below are some of the results, looking at overall temporary positions filled, and fill rates by crowdsourcing and social media recruiting.

Temporary Positions Filled (2012-13)

The majority of large companies recruited over 100 temporary workers, accounting for greater than 60%, while those recruiting less than 100 workers share the remaining 40%. Very few companies fell in the category of recruiting 25 or less contingent workers. Medium and small companies shared almost the same (approximately 50%) category of recruiting less than 25 temporary workers, while some companies did not alter their workforce composition ot include contingent workers at all. It seems that none of the large companies are without at least some temporary staff over the course of 2012, indicating that contingent workers continue to gain employment share in some magnitude. The area from less than 25 temporary workers to more than 100 temporary workers is filled largely by large companies. Small companies are second in this aspect, while surprisingly medium companies seem to have the lowest usage of crowdsourcing for recruiting purposes.

Temp Positions Filled by Crowdsourcing (2012-2013)

Temp Positions Filled Using Social Media (2012-13)

Recruiting via social media has a similar patter to recruitment through crowdsourcing. Large companies are still reading the race of using unconventional methods of sourcing and finding contingent workers, while small companies are starting to adopt usage, and medium-sized companies lag behind. If you look at the bigger picturewere moving towards a new reality in the way we work. A lot of those companies are sitting on a lot of cash, but theyre uncertain with economic stability. Theyre looking at contingent and temporary work as more of a risk-management strategy right now. Theyre trying to put their toe in the water versus jumping back in with both feet. ~Kathy Kane, Senior Vice-President at Addeco
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Social Media Strategy and Metrics & Measurement

Social media works on a simple Mantra: Convince and Convert
Social media has revolutionized the transition of communication from the slow-paced conventional one-to-one interaction to a fast-moving many-to-one process. People have limited knowledge regarding their field of application in social media, despite the fact that it is a vast ocean of the information. The movement of information at lightening speeds, with increasing levels of spontaneity, has created a immense pool of discovered and undiscovered information. The wide scope of social media usage can only be channeled and analyzed through a well-planned strategy. For example, it is believed by industry experts that the field of marketing has changed more in the past 5 years than the previous 100 years combined. Deriving an effective social media strategy comprises of 10 major steps: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Research your market and audience by listening Share you opinions Set and define your own benchmarks Discover communities or forums to engage in Identify the people who can listen to you or whose though process you can influence Create a strategy for the development of content Select a tool Deliver the content Engage and involve people and influencers in the discussion Measure results

Of course, that last step of measuring results is more difficult than it seems, given the fast pace and constant evolution of social media. However, social media has its own universal metrics through which it can be evaluated. Measurement is an important role in the steps for deriving a solid social media strategy. This is because the field involves large volumes of data, some structured and a lot highly unstructured. Social media data 1. 2. 3. 4. 5. Volume (the count of the responses you get) Reach (how deep and wide you can reach people) Engagement (people getting involved with your brand) Influence (how many people actually can take action on your recommendations) Share of voice (you versus your competitor)

mining and drawing inferences from this data is becoming at the top of a multibillion dollar industry, and accounts for a very challenging and innovative section of analytics. Big data analysis, Hadoop technologies, deployment of advance algorithm for data mining, and cloud computing are the supporting technologies for social media. They have emerged and are likely to remain in very high demand in the coming decade.
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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://www.npr.org/2013/01/28/170473478/the-ideology-of-the-expendable-employee http://emergent.com/blogs.aspx?id=2147484001 http://www.bls.gov/news.release/empsit.toc.htm http://www.bls.gov/news.release/empsit.t04.htm

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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: Debra Bergevine 508-380-4039 7815 NW Beacon Square Blvd. #224 Boca Raton, FL 33487 debra.bergevine@dcrworkforce.com | sales@dcrworkforce.com | marketing@dcrworkforce.com www.dcrworkforce.com | blog.dcrworkforce.com

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