SURVEY QUESTION:

With the third quarter of the year rapidly coming to an end and the fourth quarter on the horizon (and right behind it, 2014!), this is a good time for recruiters to analyze the activity in their niche.

The activity in a recruiter’s niche is one of the factors influencing whether or not that recruiter finishes the year strong and carries a sizeable amount of momentum into the next year.  It also might determine how much that recruiter works between now and the end of the year.

If they’re enjoying a good year, some recruiters take off nearly the entire month of December, at least in terms of sourcing and hard-core recruiting.

We recently conducted a survey of Top Echelon Network recruiters by posting a question in the Members’ Area.

That question was as follows:

How would you describe the activity in your niche right now?

SURVEY RESULTS:

The choice of answers that were provided is listed below, along with the percentage of recruiters who selected each answer:

• Red hot! — 16.9%
• Heating up fast! — 31.2%
• Eh, lukewarm — 44.2%
• Not that hot — 6.5%
• Pretty much ice cold — 1.3%

SURVEY ANALYSIS:

Okay, first the good news: 16.9% of survey participants indicated that the activity level in their niche is “Red hot!” and another 31.2% answered “Heating up fast!”  Put those together, and you’ve got nearly half of recruiters enjoying a heightened level of activity.

However, another 44.2% chose “Eh, lukewarm” as their answer, and another 6.5% indicated that their niche is “Not that hot.”  Thankfully, only 1.3% of respondents are of the opinion that their niche is “Pretty much ice cold.”

So as you can see, the answers are all over the place, which pretty much reflects what’s happening in the economy overall—some areas are hot, some are lukewarm, and some are not.

FEEDBACK:

How would you characterize the activity in your niche right now?  With one of the choices listed above, or do you have your own way to describe that activity?  Will you be taking the whole month of December off this year . . . or can you just not afford to do that?

From Staffing Industry Analysts to the Associated Press (AP), there seems to be one hot topic this summer: contract staffing.

The word is that contract hiring is going to continue increasing throughout the rest of 2013, as it becomes more evident that contract staffing has carved out a permanent place in the American workforce. Consider the following statistics from recent reports on the Internet:

• 31% of companies surveyed by CareerBuilder plan to hire contract workers, up from 21% last year. (ERE.net)

• The third quarter of 2013 is expected to mark the 15th consecutive quarter of year-over-year increases in contract hiring. (G. Palmer & Associates via ERE.net)

• Contact/temporary work accounted for 15% of all American job growth in the past four years. (CareerBuilder via Staffing Industry Analysts)

• The number of contract/temporary workers has jumped by more than 50% since the end of the recession. (AP)

• 3/4 of the economists surveyed by the AP believe the increased use of contract workers is the start of a long-term trend. (AP).

What is behind these statistics and all the buzz surrounding contract staffing?  The economy is still one of the biggest factors.

“Companies are adding more employees to keep pace with demand for their products and services, but they’re not rushing into a full-scale expansion of headcount in light of economic headwinds that still linger today,” said CareerBuilder CEO Matt Ferguson.  “The projected surge in temporary hiring from July to December is evidence of both a growing confidence in the market and a recession-induced hesitation to immediately place more permanent hires on the books.”

But Ethan Harris, global economist at Bank of America Merrill Lynch, does not believe the trend is tied solely to the economy.

“There’s been a generational shift toward a less committed relationship between the firm and the worker,” he said.

So the question is, with all this talk about contract staffing, are YOU talking about it with your clients?  If not, you could be missing out on a huge opportunity to increase your sales and create a steady stream of income for yourself.

Don’t assume that your clients aren’t using contractors or are not interested in them just because they don’t discuss them with you.  They may have just assumed you don’t handle contract staffing.  When you start talking about contract staffing, you might just be surprised by the results!

Employers all across America took a collective sigh of relief last week when the Obama administration announced that the employer mandate portion of the Affordable Care Act (ACA) would be postponed until 2015.  But the decision could leave some recruiters wondering how this will affect their firms, many of which stood to benefit from the mandate.

The employer mandate was to require employers with 50 or more employees to provide healthcare insurance to those employees by January 1, 2014, and it also came with a number of reporting requirements.  This mandate was a mixed blessing for recruiters.

For larger recruiting firms, it presented a challenge, as they were at risk of rising above the 50-employee threshold and having to provide insurance to their contractors.  But for most recruiters, it provided an opportunity to get more contract staffing business, as more companies turned to contractors to stay below the 50-employee threshold.

But now, according to a blog on the U.S. Department of Treasury website by Assistant Secretary for Tax Policy Mark Mazur, the reporting requirements under the employer mandate have been postponed until 2015.  That means the government will not be able to determine which employers are not providing the required coverage and cannot assess penalties, so the requirement to provide insurance is effectively also postponed until 2015.

So where does this leave recruiters?  Well, if you are a large firm that would fall under the employer mandate, you technically don’t have to provide insurance until 2015.  However, Mazur urged employers to voluntarily implement the reporting requirements in 2014 to prepare themselves for 2015.  Also, the delay does not relieve you of the obligation to notify employees about the existence of healthcare exchanges, or “The Marketplace.”  You must still provide the required notice by October 1, 2013.

For recruiters who are not subject to the employer mandate, but were hoping to benefit from it, stay the course.  You should still discuss the healthcare reform law with clients and the eventual impact it will have on their costs and administrative burden.

There is no indication at this time that the employer mandate will be repealed, so they can’t lose anything by preparing now.  In fact, they can immediately start reaping the other benefits of contract staffing: workforce flexibility, reduced legal liability, the ability to “try-before-they-buy” through contract-to-direct arrangements, etc.

The bottom line is that ALL recruiters should stay on top of this law and the impact it could have on their clients.  Companies often look to recruiters as employment experts and may turn to you for advice on how to best navigate the law.

(Editor’s note: This article is for informational purposes only and should NOT be considered legal advice.)

The Affordable Care Act (ACA), the healthcare reform law often referred to as Obamacare, is being credited for a spike in contract staffing, which is at its highest level since 2006 and is outpacing traditional, direct hiring.

The Bureau of Labor statistics reported that 2,679,800 workers were employed in contract/temporary positions in May, inching ever closer to the all-time record of 2,767,300 contractors working in October 2006, according to ere.net.

Moreover, year-over-year contract staffing growth was 7.5%, which is five times the growth of the overall economy’s jobs increase of just 1.56%.  The contractor penetration rate (the percent of workers who are contractors) has hit 1.98%, close to all-time high of 2.03%.

Investors Business Daily is pinning some of this contract staffing growth on what are being called ‘Obamacare-Dodgers’ — employers trying to get around the employer mandate portion of the ACA by utilizing contractors instead of direct hires.  The employer mandate, which begins in 2015, will require employers with 50 or more employees to provide healthcare insurance to their employees or pay a per-employee penalty.

Utilizing contractors who are W-2 employees of a contract staffing back-office is a legitimate strategy for reducing or eliminating an employer’s responsibilities under the employer mandate.  Basically, companies are outsourcing the employer responsibilities to the back-office.

Recruiter Joell Iskander of Select Hire Resource is seeing more of her clients go the contract staffing route as a result of Obamacare.

“When clients utilize contractors, benefits and other employer issues are no longer their problem,” Iskander said.  “If they put someone on as a contractor, it’s something the recruiting firm or back-office handles.”

This is a safer alternative to another popular Obamacare avoidance strategy — classifying workers as 1099 Independent Contractors.  Companies may use this technique to reduce their number of employees that must be counted to determine if they fall under the employer mandate.  However, simply calling a worker an independent contractor doesn’t make it so.

They must meet the IRS guidelines for independent contractors.  The Obama administration has been very diligent in targeting companies that misclassify W-2 employees as 1099 independent contractors because the proper employer taxes are not being paid on those individuals.  This is not an issue when companies utilize contractors employed through a back-office because that back-office classifies the workers as W-2 employees, pays the employer share of payroll taxes, and takes responsibility for Obamacare compliance.

The continued growth of contract staffing in light of Obamacare presents a huge opportunity for recruiters willing to place W-2 contractors.  Unfortunately, some recruiters will pass up this opportunity because they are reluctant to delve into contract staffing due to the misconception that it is more difficult than direct hire.

But contract staffing does not have to be any more difficult than direct hire placements when you utilize a contract staffing back-office.  The back-office becomes the legal W-2 employer of the contractors and handles all of the financial, administrative, and legal details of the contract placement.  This leaves you to handle the traditional recruitment tasks: get the job order, find the candidate, and negotiate the rates.

Additional placements are yours for the taking IF you are willing to stretch a little outside of your comfort zone.  Not only can you increase your sales, but you can also become a valuable partner by providing clients with a viable solution to one of the most challenging staffing issues they’re facing.

(Editor’s note: this article is for informational purposes only and should NOT be considered legal advice.)

First the good news: the economy is growing and companies are adding jobs.

The bad news?  The growth is slower than everyone would like and has slowed since the beginning of the year.

Why?  Well, as ADP CFO Jan Siegmund explained in an interview with Fortune magazine Editor-At-Large Geoff Colvin, small businesses in particular are still scared to hire due to a number of economic factors.

“Since the beginning of the year, we believe that potentially the tax rate changes had an impact and anticipation of the healthcare reform may impact hiring decisions, as well as the reemergence of payroll taxes,” Siegmund said.

Hiring appears to be particularly slow for companies in the 30 to 50 employee range, he added.  This is most likely due to the employer mandate of the healthcare reform law known as the Affordable Care Act (ACA) or Obamacare.

In 2015 (recently pushed back from 2014), the employer mandate will require employers with 50 or more full-time or full-time equivalent employees to provide healthcare insurance to those employees.  Employers who are close to the 50-employee threshold may choose not to hire to avoid being subject to the employer mandate, Siegmund said.

This could be bad for recruiters who depend on hiring for their livelihoods.  Or it could create an opportunity for them to position themselves as a strategic partner for their clients.  Simply not hiring to avoid Obamacare is not going to be a good strategy for companies trying to grow.

Recruiters can provide a viable solution.  You can provide contractors who are W-2 employees of a contract staffing back-office.

That way, small companies can get the help they need to continue growing without being subject to the employer mandate.  As the employer for the contractors, the back-office assumes all of the employment responsibilities, including Obamacare compliance.

To get started, simply let your clients know that you can provide contractors and align yourself with