(Editor’s Note: This is the next in a series of guest blog posts about contract staffing, courtesy of Top Echelon Contracting, the recruiter’s back-office solution.  Similar posts will appear in future issues of The Pinnacle Newsletter Blog.)

For at least the past decade, Americans have been lamenting the loss of jobs to countries overseas.  Everything from call centers to manufacturing operations has been shipped to countries with lower wages and fewer government regulations.

Now it appears that some of those jobs may be coming back home.  A new trend is emerging known as “re-shoring,” which refers to companies that previously off-shored functions bringing those functions back to the United States.  A recent Workforce article points to Apple as an example.

The technology leader, known for making products in China, recently announced that it would be manufacturing some computers in the United States.  While experts don’t expect offshoring to disappear, the Workforce article notes a gradual movement toward bringing work back to the United States, driven by the following factors:

1. Eroding Cost Savings.  As wages and benefits costs increase in China, the amount companies can save by offshoring is decreasing and could go down to single digit percentages for many products.
2. Social Responsibility.  The slow economic recovery has made some successful companies feel responsible for creating jobs at home.
3. Value of Proximity.  Companies are starting to realize the advantages of having team members close together.  For instance, one hotel group interviewed for the article said that having developers located near the company’s business partners is essential for strategic tasks, such as rebuilding the website.
4. U.S.-specific skills.  Some skills are difficult to find overseas.  One example is app development for mobile devices.  U.S. coders are more familiar with writing those apps, so most app development is done with American talent.

Obviously, re-shoring is good for the American workforce . . . and recruiters.  But there’s a catch.  Many of these jobs are going to be filled by contractors.  Companies are still looking to keep their labor costs down.  Contractors help them do that because they are employed by a third party (“back-office”) that pays the employer portion of benefits premiums.  The back-office also takes on the administrative costs and burdens associated with payroll, Workers’ Compensation, Unemployment, employee paperwork and issues, and more.

North Canton, Ohio-based recruiter Mike Aquino told Top Echelon Contracting that a number of companies he’s worked with at his firm, MPA Companies, are bringing work back from overseas due to quality.

“They sent the work overseas because it was cheaper, but quality was horrible and they lost money because it held up production,” Aquino said.  “They’ve decided to bite the bullet and pay more to get it done right in the United States.”

But companies are having trouble finding the skilled workers they need nearby.  That’s where contracting comes in.  Workers from other areas who may be reluctant to relocate may consider moving on a temporary basis to take a contract assignment.  For example, Aquino recently received a call from a client in Texas looking for contractors from Ohio.

Only time will tell how big re-shoring will really be, but it’s obvious that it has already had some impact and that recruiters who can place contractors could especially benefit from this trend.

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(Editor’s Note: This is the next in a series of guest blog posts about contract staffing, courtesy of Top Echelon Contracting, the recruiter’s back-office solution.  Similar posts will appear in future issues of The Pinnacle Newsletter Blog.)

It appears the Department of Labor (DOL) will once again be focusing on worker misclassification in 2013.

Staffing Industry Analysts recently reported that the DOL plans to commission a $1.9 million study to determine if workers have knowledge of their employment classification and the implications of that classification.

When a worker is classified as a 1099 Independent Contractor (IC) rather than a W-2 employee, they are not covered by Unemployment or Workers’ Compensation insurance. They are also deprived of minimum wage and overtime pay and do not have taxes automatically withheld from their pay like they would if they were employees.

Because federal law doesn’t currently require employers to inform workers of how they are classified or why, the DOL suspects that workers “may not be prepared for the consequences of misclassification,” according to the Federal Register.  The DOL intends to interview 10,060 workers and 100 executives to gauge workers’ awareness of basic employment laws and the consequences of their classification.

The DOL is soliciting comments on the potential study until March 12.  Additional details, including how to submit comments, are available in the Federal Register.

According to the Federal Register, the practice of misclassifying employees as ICs takes $2.7 billion per year of Social Security, Unemployment, and income taxes out of the federal coffers because companies don’t pay the employer portion of taxes on their ICs. This loss of tax revenue is why the DOL has been cracking down on misclassification over the past few years. Since 2009, the DOL has collected $29 million in back wages for more than 29,000 workers who were determined to be misclassified as 1099 ICs rather than W-2 employees.

As always, we urge you to warn your clients about the dangers of worker misclassification. The DOL is not going away, and the Obama administration’s war against misclassification is only going to intensify, especially since more employers may be tempted to classify workers as 1099 ICs to avoid complying with the Patient Protection and Affordable Care Act (PPACA) better known as Obamacare.

If you have clients who are utilizing ICs, you can help by offering to convert their ICs to contractors who are W-2 employees of a contract staffing back-office, such as Top Echelon Contracting. The back-office assumes all the employment responsibilities, including providing Unemployment and Workers Compensation insurance, paying the employer portion of taxes, and withholding the appropriate taxes from contractor pay checks. That way, your clients can still enjoy the cost savings of having contractors without the legal risks.

— — —

888.627.3678
dfledderjohann@topecheloncontracting.com
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(Editor’s Note: This is the next in a series of guest blog posts about contract staffing, courtesy of Top Echelon Contracting, the recruiter’s back-office solution.  Similar posts will appear in future issues of The Pinnacle Newsletter Blog.)

One of the questions we get most often from recruiters looking to get into contract staffing is “What are the top industries for contract staffing?”

That’s why we analyze the contract placements that come through our back-office each year.

According to our 2012 placement statistics, the top seven sectors for contract staffing nationwide were as follows:

• Healthcare—29%
• Business Professionals and Support Staff—25%
• Engineering and Manufacturing—16%
• Information Technology—11%
• Finance and Accounting—10%
• HR/Legal/Recruiting—7%
• Sales/Marketing—2%

Healthcare has been a leading industry for contract staffing for years and is only getting stronger as the population continues to age.  Healthcare contractors will likely be even more in demand when the Obamacare “individual mandate” begins requiring individuals to get healthcare coverage, which will send more consumers to already overtaxed healthcare providers.

Last year, we at Top Echelon Contracting increased our focus on helping recruiters make healthcare contract placements.  We ran a number of Physical Therapists, Occupational Therapists, Speech Language Pathologists, Pharmacists, Pharmacy Techs, and Registered Nurses (RNs) through our back-office in 2012.  That trend has continued into 2013.

We also expanded our Workers’ Comp coverage in 2012 to allow more Engineering and Manufacturing placements in a wider range of environments.  This was our third-largest sector in 2012.

We saw the largest jump in the placement of Business Professionals and Support Staff, which increased 9% over 2011.  Business Professionals and Support Staff were placed in a variety of industries and business sectors.

— — —

888.627.3678
dfledderjohann@topecheloncontracting.com
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(Editor’s Note: This is the next in a series of guest blog posts about contract staffing, courtesty of Top Echelon Contracting, the recruiter’s back-office solution.  Similar posts will appear in future issues of The Pinnacle Newsletter Blog.)

Demand for temporary/contract workers in the professional sector is expected to exceed previous records in 2012 and 2013, according to Staffing Industry Analysts’ U.S. Staffing Industry Forecast.

Specifically, the IT Staffing and Engineering/Design industry segments within the Professional/Specialty sector are expected to beat previous records for staffing revenue.  IT Staffing’s revenue previously peaked in 2000.

This year, the industry is expected to generate 107% of 2000’s revenue by the end of this year and 116% in 2013.  In 2012, Engineering/Design is expected to bring in 106% of the revenue from its previous peak year of 2008 and 111% in 2013.

Meanwhile, the usage of “temps” in the office/clerical industry appears to be declining. It is projected that in 2012, the industry will only hit 85% of its previous 2006 peak and only 89% in 2013.

This correlates with what Top Echelon® Contracting has been experiencing.  Engineering and IT have landed in our top three industries for contract placements for the past several years, and we are expecting the same for 2012.  We have particularly seen an increase in the engineering/manufacturing sector and have begun accepting more placements in this area.

So what does this mean to you as a recruiter?  Well first of all, if you are looking for a niche in which to offer contract staffing services, it’s pretty clear that IT and Engineering are good places to start and have longevity.

— — —

888.627.3678
dfledderjohann@topecheloncontracting.com
Connect with Debbie on LinkedIn.
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(Editor’s Note: This is the next in a series of guest blog posts about contract staffing, courtesy of Top Echelon Contracting, the recruiter’s back-office solution.  Similar posts will appear in future issues of The Pinnacle Newsletter Blog.)

How important is workplace flexibility to working adults? It’s important enough that 45% would sacrifice a portion of their salary to get it, according to a Staffing Industry Analysts article citing a Moms Corps survey.

They are also willing to give up increasingly large percentages of their salaries to get that flexibility. This year, they said they would be willing to take an 8.6% pay cut. Last year they said they would only be willing to slash their pay by 5.8%.

In addition, the survey found that:

• 67% believe they can “have it all” when it comes to work-life balance.
• 53% said they could get more done if they could occasionally work from home.
• 60% said that the economy has no impact on their desire for workplace flexibility.

This growing need for workplace flexibility is one of the major reasons more workers are choosing to become contractors. Contract staffing can help workers gain flexibility by allowing them to:

1. Work hours that are convenient for them.  Contract assignments are often project based, so companies may allow flexible daily or weekly work schedules, as long as the work gets done on a timely basis.
2. Not be tied to an office.  If a candidate has what they need at home, they can often work between their home and office. Smartphones, the Internet, and other technological advances are making this more and more feasible
3. Take control of their free time.  New employees typically only get one week of vacation, two tops. Even if they are willing to take the time unpaid, they often are not allowed. With contracting, if they want to take an extended vacation or take the summer off to be with their children, they simply don’t take an assignment during that time. Many contractors choose to take assignments in other states to take advantage of the opportunity to travel. They actually look at this as a vacation of sorts in which they can explore new areas, cultures, etc.

Do your candidates need or want more flexibility in their work? If so, you way want to suggest contract staffing as an option. By providing a way for them to achieve work-life balance, you can make yourself the recruiter of choice for top candidates in your niche.

— — —

888.627.3678
dfledderjohann@topecheloncontracting.com
Connect with Debbie on LinkedIn.
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(Editor’s Note: This is the next in a series of guest blog posts about contract staffing, courtesy of Top Echelon Contracting, the recruiter’s back-office solution.  Similar posts will appear in future issues of The Pinnacle Newsletter Blog.)

The myth that workers only become contractors to obtain a direct hire position has been officially debunked by a recent Randstad study.

Over 2,000 employed adults were surveyed for the Randstad Workforce360 Study. The study found that 78% of the temporary/contract workers surveyed felt their experience was positive.  In fact, many have chosen contract work over direct hire positions for the following reasons:

• Schedule flexibility (selected by 31% of respondents)
• Better pay (28%)
• More control over career (21%)

Of the temporary/contract workers surveyed, 86% reported that their level of job satisfaction was very good or excellent, compared to 73% of permanent/direct hire employees.  In addition, 54% of the contractors strongly agreed with the statement, “I am paid what I’m worth.” Only 42% of direct hires stated the same.

In addition, the survey found that one-third of contractors occupy high-level positions. This relates to a trend Top Echelon® Contracting has reported on numerous times called executive temping.

One of the biggest reasons recruiters don’t offer contract staffing is that they’re afraid they won’t be able to find candidates.  This study shows that candidates’ attitudes toward contract staffing have changed dramatically.  Contract positions are no longer the jobs they take because a direct position is not available. More and more, candidates are choosing contract positions over traditional employment.

The only way you’ll know if your candidates are willing to work as contractors is to ask them.  You may be surprised by how many would prefer the option to work on contract.

And if you run your contractors through TEC’s back-office, they’ll be happy to know that they’ll be offered a full menu of benefits, including healthcare insurance offered through Anthem Blue Cross and Blue Shield.  This is in addition to a weekly paycheck with the option of direct deposit.

— — —

888.627.3678
dfledderjohann@topecheloncontracting.com
Connect with Debbie on LinkedIn.
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(Editor’s Note: This is the next in a series of guest blog posts about contract staffing, courtesy of Top Echelon Contracting, the recruiter’s back-office solution.  Similar posts will appear in future issues of The Pinnacle Newsletter Blog.)

The increased use of contractors over the past few years is more than just a knee-jerk reaction to the recession, according to a recent survey by Randstad.

The Randstad Workforce360 Study found that companies are beginning to view blended workforces – those that include a mix of traditional employees and contingent workers – as a long-term business strategy.

Of the 225 human resource managers surveyed, 67% are using contractors in some capacity. In addition, 71% of companies with blended workforces reported that the flexibility provided by their contractors has allowed them to “remain nimble” in the uncertain economy. Twenty-one percent of the companies surveyed plan to increase their contract worker population in the next year.

“What used to be viewed as a temporary stop-gap measure, the utilization of a contingent workforce alongside full-time talent is no longer a contingency plan,” Managing Director of Human Resources for Randstad US Jim Link said in a press release. “We believe this integrated staffing model will be fundamental to operational and fiscal success for the foreseeable future.”

This is no surprise to us at Top Echelon Contracting. We have noticed that companies are taking their use of contractors beyond what is typical in an economic recovery. In fact, many are implementing a whole new workforce strategy in which they maintain a core group of employees supplemented by a more flexible outer ring of contractors. As a result, Top Echelon Contracting experienced a 22% increase in commercial contract placements in 2011 and is seeing a continued upward trend this year.

This is good news for recruiters as it represents a whole new crop of placement opportunities. If you have previously only placed direct hire candidates, now is the perfect time to pursue contract staffing job orders.

The process for placing contractors is essentially the same as placing direct hires. In many cases it is actually easier because contract placements typically happen much quicker as companies try to meet an immediate need or deadline.

To learn how to add contract staffing to your business model, download our FREE Contract Training Kit.

— — —

888.627.3678
dfledderjohann@topecheloncontracting.com
Connect with Debbie on LinkedIn.
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(Editor’s Note: This is the next in a series of guest blog posts about contract staffing, courtesy of Top Echelon Contracting, the recruiter’s back-office solution.  Similar posts will appear in future issues of The Pinnacle Newsletter Blog.)

As the number of mobile devices and users increases rapidly,contractors are helping the wireless telecommunications industry keep up with the demand.

More than 3.8 million Americans are employed in this sector, which accounts for 2.6% of all U.S. employment, according to CTIA, the International Association for the Wireless Telecommunications Industry.  The association also predicts that wireless broadband investment will create as many as 205,000 jobs in the United States by 2015.

“Wireless providers are working feverishly to expand their network capacity, and the proliferation of smartphones, iPads, video conferencing, etc., are driving that demand in all sectors,” said Mike Zarnek, Executive Recruiter and President of Z Search Recruiting.

To keep up, wireless telecommunications companies must find workers with specific technical expertise in the industry.  But at the same time, they are not ready to commit to direct hires.  As a result, Zarnek, who has been recruiting in the industry for over 30 years, is seeing a “definite increase” in client requests for contractors.

“Contract staffing allows our clients to increase productivity without increasing overhead,” said Zarnek.  “Contract staffing is a practical management solution for covering peak workloads, extended absences, special projects, and more.  Employees are the foundation of any successful organization, while also being an expense.  Using contractors in certain situations shifts a fixed expense to a variable expense that can be increased or decreased based upon business needs.”

Z Search Recruiting provides direct hire and contract staffing solutions to the entire wireless industry, including the Wireless Carrier Market, RF, Microwave, DAS, Mobile Content, Mobile Advertising, 4G Infrastructure Providers, Mobile Handheld Device Manufacturers, LTE Infrastructure Providers, Network Monitoring and Optimization Services, Public Safety Communications, Antenna Design Firms, and Wireless Test and Measurement Services.

The firm utilizes the contract staffing back-office services of Top Echelon® Contracting (TEC) for its contract staffing placements. TEC has worked with Zarnek on 729 placements in this niche since 1996.

— — —

888.627.3678
dfledderjohann@topecheloncontracting.com
Connect with Debbie on LinkedIn.
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(Editor’s Note: This is the next in a series of guest blog posts about contract staffing, courtesy of Top Echelon Contracting, the recruiter’s back-office solution.  Similar posts will appear in future issues of The Pinnacle Newsletter Blog.)

The Health Information Technology for Economic and Clinical Health Act (HITECH Act), which provides funding to healthcare providers for the adoption and “meaningful use” of EHRs, has generated a huge demand for health IT professionals.

This demand has created a new niche for recruiters who have the ability to place professionals with the unique skill set needed to fill these positions.

One recruiter who is focusing his efforts on this niche is Raymond Gooch, CPC, of Spectrum Career, LLC, who also serves on the faculty at a local college for the ONC’s Health IT Workforce Development training program and is strategically aligned with the HIT Midwest Consortium of Colleges and the Ohio Hospital Association (OHA) to promote individuals successfully completing the training program.

Gooch says that healthcare providers need IT professionals who are not only technically skilled, but who can also communicate effectively with medical professionals.  This is a hard combination to come by.

The need is so great that many larger healthcare organizations are on a never-ending search for experienced professionals.  The challenge is that experienced health IT professionals are in extremely short supply.

“I’ve had hospitals tell me, word for word, ‘I have no problem finding quality IT professionals on my own, but I can’t find quality IT professionals that understand healthcare,’” Gooch said.  “Hospitals would strongly prefer individuals who have a healthcare background and have crossed over into IT. That’s a slim pool of people.”

According to a recent HIMSS (Healthcare Information and Management Systems Society) survey, the lack of adequate staffing resources was the main barrier to IT implementation for 25% of healthcare providers surveyed.

Hospitals and other healthcare providers often choose contractors to fill their open health IT positions, Gooch said.  Cost containment is a major reason.  Often, providers only need to augment their staff for the completion of specific, short-term health IT initiatives.

“Projects are often implemented in a burst of activity, and then they trail off,” Gooch said.  “For example, a hospital may need Health IT Implementation professionals for several months, and then when the implementation phase is over, they don’t need them anymore.  Smaller physician practices can’t afford a full-time IT professional on staff, so contractors are a great solution.”

Top Echelon Contracting (TEC) has noticed steady growth in the number of health IT contract placements.  Some of the hottest positions include the following:

•  Clinical IT Consultants
•  Healthcare IT Epic Analysts
•  Healthcare Systems Analysts
•  Meditech Clinical App Consultants
•  Meditech LIS Consultants
•  Meditech Pharmacy Systems Analysts

— — —

888.627.3678
dfledderjohann@topecheloncontracting.com
Connect with Debbie on LinkedIn.
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(Editor’s Note: This is the next in a series of guest blog posts about contract staffing, courtesy of Top Echelon Contracting, the recruiter’s back-office solution.  Similar posts will appear in future issues of The Pinnacle Newsletter Blog.)

There’s no doubt that contract staffing is on the rise, as is usually the case in an economic recovery. But what really makes this surge in contract staffing unique is where the growth is happening.

Much of that growth is happening in the C-Suite.  In the Third Quarter 2012 edition of the Contracting Corner, Joanie Ruge, Senior Vice President and Chief Employment Analyst for Randstad Holding U.S. told Top Echelon Contracting that companies are looking for a more flexible workforce model with contractors at all different levels, extending all the way to the C-Suite.

In a trend known as executive temping, companies are bringing in high-level executives on a contract basis, sometimes for as long as a year or two, Ruge said. This is quite a contrast from the days when “temp staffing” was limited to office, clerical, blue collar positions.

A recent www.nrp.com article titled “For Temp Workers, ‘Temp’ Looking More Permanent,” also highlights this trend. Ed Schultz, who has worked on a contract basis as an acting comptroller or CFO for numerous companies over the past decade, told www.npr.com that companies thinned out their C-suites during the recession. While the recovery has created more of a demand for executives to handle mergers and acquisitions, companies are still not hiring full-time.

“My feeling is that it’s a permanent change,” he said. “It’s a sea of change that we’re seeing more activity in that interim C-suite area.”

Executive temping is a win-win for both the company and the executives.  Companies, of course, save on the high cost of executive benefits packages and have the ability to only pay the steep price for an executive when they need one.  Executives enjoy the more flexible schedule and the ability to take on a variety of challenging projects.

It’s also a win for recruiters.  Companies often need help finding these high-level individuals. By finding and placing them as contractors, you can earn a hefty hourly income over the length of their contract, not to mention a nice conversion fee if the company decides they do need full-time help and coverts them to a direct hire.

— — —

888.627.3678
dfledderjohann@topecheloncontracting.com
Connect with Debbie on LinkedIn.
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