Contingent Employment at Record Levels while Bill Rates Remain Flat, according to IQNavigator's IQNdex Report Report Provides Insight into Temporary Labor Supply and Demand Trends as the U.S. Economy Rebounds
DENVER, Nov. 14, 2013 /PRNewswire/ --The latest IQNdex report from IQNavigator shows that contingent labor bill rates remained unaffected in the third quarter despite the record level of hiring for temporary and contingent workers in the U.S. economy. What makes this rate stability even more remarkable is that this "hiring spree" for non-permanent workers is occurring in parallel to a prolonged period of direct employee hiring (for permanent employees), as reported in the most recent BLS jobs report from the U.S. government.
The Q3 2013 IQNdex also suggests that the U.S. is undergoing a fundamental change in the composition of the workforce - with contingent labor growing in importance since the 2007 recession - and the report examines in detail the factors driving that trend. Post-recession, the economy has experienced little upward pressure on direct hire wages or contingent labor bill rates. In addition, an increased reliance on contingent labor by employers to fill new roles and record levels of temporary staffing employment sheds light onto the emerging employment landscape.
"The IQNdex numbers are fascinating, especially when you look at them alongside the most recent jobs report. The economy is hitting new records every month for the volume of contingent hiring — 2.7 million in the most recent metrics — and there is also continued permanent hiring in the overall labor market. Despite all the hiring, billing rates remain very stable. That is an interesting illustration of just how much excess capacity there has been in the labor market because of the severity and length of the recession," said Gary Pollard, VP, Information Products at IQNavigator. "In other circumstances, demand for workers of this duration would drive bill and wage rates up markedly, but the labor market has supported this wave of direct and temp hiring without the normal upward pressure on the price of that labor. This will likely encourage employers to continue seeking contingent workers as a way to meet their labor needs while retaining the flexibility they are looking for."
Each quarter, IQNavigator analyzes the data from the IQNdex and compares the findings on temporary worker bill rates to current market conditions and economic indicators. The IQNdex report provides insights into the segment of the U.S. labor market comprised of non-employee workers such as freelancers, contract workers, temps, staffing agency employees and independent professionals. The Master IQNdex is based on analysis of millions of data points across all geographic areas of the U.S. and across four major job categories.
According to this new IQNdex report, there was no rise in the Master IQNdex during the third quarter of 2013, which began and ended the period at 107.4. The aggregate bill rate change across all contingent labor sectors was +0.7 points for the first three quarters of 2013. This compares to the 1.5 percent rise in direct hire average hourly earnings for the same period. Adjusting for inflation, running at an annualized 1.2 percent in September, contingent labor bill rates have fallen very slightly in real terms.
Additional insights in the Q3 2013 IQNdex report include the following:
- After rising for 17 consecutive months, rates for Information Technology roles leveled out in the third quarter, driven by a softening of rates for Business Analysts, Project Managers and Software Testers.
- The Professional-Managerial job sector ended a nine month run of declining rates and showed a slight uptick in August and September. A long term decline in rates for non-IT Business Analysts appears to have ended.
- Bill rates in the Northeast have risen 3.5 percent in 2013 YTD, but were flat in the third quarter.
- In Chicago, Demand for Administrative Assistants drove up bill rates in the third quarter. Likewise, Recruiters have commanded significant rate increases in 2013.
- In Charlotte, NC, rates paid for non-IT Business Analysts slipped more than 5 percent in the last quarter. Denver experienced a similar decline for the same role.
For additional insights, charts and findings, including job sector and geographic insights, visit www.iqnavigator.com/iqndex for the most recent IQNdex report.
IQNavigator is the proven leader in services procurement solutions, helping global enterprises better manage all types of procured services and their non-employee workforces around the world. IQNavigator's cloud-based VMS software processes tens of billions of dollars in yearly services spend, enabling clients to intelligently manage and optimize the cost-effectiveness, compliance, visibility and efficiency of complex services procurement and contingent workforce programs. For more than a decade, IQNavigator has been the leader in providing innovative technology solutions for managing companies' procured services including statement of work and project-based consultants, contractors, temporary workers and other contingent workers. For more information about IQNavigator and how its industry-leading offerings are helping many of the world's most respected companies, visit www.IQNavigator.com.