According to the article, “temporary help services” added 17,000 jobs in August.  The sector has experienced a 22 percent increase over last year, which is its biggest jump since 1991. Temporary/contract workers currently represent 1.62 percent of the workforce.

Increases in temporary/contract staffing are often seen as a good sign of a recovery following a recession because employers who are reluctant to hire often use contracting as a way to test the waters.  This may well be the case with this most recent surge in contract staffing considering that the article also notes that temp-to-direct conversions are increasing.

Many contractors are working away from home and their banks don’t have branches in the areas where they are contracting. There is no way to deposit a paycheck short of driving to the bank location, which is probably not possible until the weekend when bank hours are limited.  Plus, deposits made over the weekend often are not available until the following work day. Meanwhile, even with a check in hand that is more than enough to cover expenses, the contractor often ends up paying bills late and receiving penalties for doing so.

Direct deposit eliminates this issue because the money is automatically deposited into the  bank account on pay day.  It is immediately available to pay bills and make withdrawals, so the contractor isn’t stuck with a useless check until they can get to the bank.  The contractor saves money because there are no penalties and no wasted gas driving to the bank location.

Direct deposit can sometimes be hard for contractors to come by because the company they work for is not their employer and will not provide that service, and staffing agencies don’t always allow direct deposit. But if you are using Top Echelon Contracting as your contract staffing back-office service provider, all of your contractors will have access to direct deposit.  When “selling” contract positions to your candidates, direct deposit may be a good benefit to mention, and the Patriot Software blog post can show them why it’s so valuable.

Well, just to prove that it’s not all doom and gloom out there, Top Echelon Contracting has found a few promising reports regarding the economy and hiring:

• USA Today recently reported that new unemployment claims have decreased for the second week in a row.  Better yet, the four-week average of claims, which is a less volatile number, has also declined by 2,500, representing the first decrease in this average after four straight increases. The article also mentions what Top Echelon Contracting reported in a previous blog post, that productivity is declining, indicating that employers may have to hire rather than continuing to put more pressure on their current workers.
• A www.CNNMoney.com shows that while this recovery may be moving slower than everyone would have hoped, it is, as the title of the article states, the “Strongest jobs recovery in decades. Seriously.” The article shows that payrolls in the most recent recession started growing in November and that the economy has added jobs every month since then.  In comparison, the economy lost nearly 300,000 jobs after the 1990-91 recession ended, and the 2001 recession was followed by a nearly two-year “jobless recovery.”  The problem, though, is that far more jobs were lost in this recession than in those previous downturns, but the report still offers a bit of a brighter perspective than a lot of the news out there.
• Also from www.CNNMoney.com, manufacturing is continuing its growth.  We have reported numerous times about how manufacturing is one of the industries leading the recovery, and this article shows the trend is continuing.  According to the article, the manufacturing index was at 56.3 in August, which was a increase over July and was ahead of expectations.  Anything above 50 on the index represents growth.

So while we’re not out of the woods yet, hopefully these nuggets of positive news will give you a little boost to start the month!

Armed with 250 new wage and hour investigators, the Department of Labor has increased its focus on the industry.  The agency settled with one St. Louis employer for $1.7 million in back wages for 4,000 employees, while a Boston hospital system shelled out $2.7 million for 700 of its employees for back overtime owed.  Meanwhile, healthcare employers are also getting hit by more class action lawsuits in this area as attorneys turn to the Internet to find potential victims of overtime violations rather than waiting for plaintiffs to come to them.

One of the areas where healthcare employers are especially vulnerable for overtime violations is meal periods. According to the Department of Labor “Bona fide meal periods” of at least 30 minutes do not have to be paid.  However, the worker must be completely relieved of his/her duties during that time. Getting 30 minutes of completely uninterrupted break time is nearly impossible in the healthcare industry where patient care is time-critical.  But many healthcare employers use timekeeping systems that automatically deduct for lunches, leaving them open for these types of violations.

If you have clients in the healthcare industry who are unaware of this increased enforcement, you may want to give them a heads up and point them towards these articles.  The Wage & Hour Defense Blog suggests that they spend extra time viewing their pay practices, particularly when it comes to the time workers spend at work before and after scheduled shifts, missed meal breaks, record keeping, and the proper classification of employees deemed to be exempt from overtime.

According to the article, work and family life were intermingled to the point that there was little, if any, separation between the two.  Families worked side-by-side in the fields, small shops, bazaars, and in the home.  It’s only been within the last century that this has changed.  As work moved away from the farm and family-owned shops and into the factories and offices, work became something that was done away from the home and that did not involve the family.

Now it all seems to be coming full circle as workers are finding ways to turn their interests and passions into work they can do from home as little or as much as they want.  Generation Y and the Baby Boomers are leading this shift, according to the article.  Millennials, as members of Generation Y are often referred, will often work non-stop for days on something they are passionate about and then barely work at all for awhile.  Meanwhile, Baby Boomers are looking for ways turn “hobbies” into second careers they can do on a consulting basis, either in person or virtually from home.

Contracting is a great way to help both generations achieve their work/life balance.  For Millennials, contracting allows them to work hot and heavy on a project they are passionate about for a short time and then take some time off before starting a new contract assignment.  And as Top Echelon Contracting reported in a previous blog post, this is a great time for Baby Boomers to find consulting jobs as companies find themselves unprepared for sudden executive departures and need the short-term expertise of retired high-level executives to fill the gap.  As contracting becomes more popular, we may find that work/life balance is a regular way of life, not just a buzz phrase.

The article, titled “Hiring Candidates Who Will Stay,” draws the conclusion that early departures are often a result of employees not knowing enough about the job before going in.  It provides data from a survey conducted by University of Florida business professor, John Kammeyer-Mueller, in which 1,000 employees were questioned a month into a new job and then continually over the next two years.  He asked  questions such as “How much information did you have about the job?”  What Kammeyer-Mueller found is that the less they knew about the job before they started, the more likely they were to leave.

To combat early turnovers, the article suggests that employers provide “Realistic Job Previews” (RJP) so that candidates have all the information they need before starting a new job. Ideas for the RJP include having on-site previews lead by trained facillitators or subject-matter experts, disclosing high turnover issues and the worst parts of the job, allowing candidates to meet with a high-performing employee in the area they are applying for, and using online previews to help provide applicants with an early vision of what the job would be like.  Of course, employing these methods will thin out the crop of qualified candidates an employer can choose from, but if they ultimately select someone who will stick around, the article contends that the extra time and effort will be worth it.

While these are all great suggestions that you may want to pass along to clients that are having trouble with early turnover, the article leaves off what we think is the “Ultimate Realistic Job Preview” . . . Contracting!  By offering positions on a contract-to-direct basis, employers can provide a candidate with more than just an idea of what to expect.  The candidate can actually work the job to determine if it is the right fit for them.  And better yet, the employer can determine if the candidate is a good fit for the organization.  If it doesn’t work for either party, they can simply walk away and try again!

One reason contracting is a great option for those who feel forced to relocate is that the jobs are most often short-term.  They allow the worker to buy time while waiting for a job to open up closer to home rather than having to pick up and move permanently.  For those who are willing to make a permanent change, a contract-to-direct situation is a great option because they can try out the new job and city without having to make a long-term commitment. If they don’t like what they see, they can opt not to take the permanent position and try something else.

The other reason that contracting is ideal for those who can’t find work close to home is the current housing market.  If a worker takes a permanent job out of town and the employer is not willing to provide assistance in selling the home, that worker could end up paying two housing bills for quite some time.  But often, those working away from home on a contract assignment are eligible for per diem, which helps them pay their living expenses while on contract.  A recent Fistful of Talent blog post titled “Relocation May Require Landlord Skills” also discusses how those relocating may want to consider renting their homes while working out of town, so that is an option you may want to mention to candidates who are reluctant to accept contract positions away from home.

This is a time when a lot of people are making hard decisions to keep their families fed, but this is one area where you as a recruiter can help make a difficult situation much easier for your candidates by providing contract assignment opportunities.

That is the question raised by a recent itWorldCanada.com blog post titled “Are biases keeping you from hiring the best candidates?” The article focuses on criteria often expected of Information Technology candidates, but employers often seek many of these same qualities in candidates they consider for all types of positions:

• Extensive experience in the field being hired for
• Graduation from a “big-name” school
• Being “clean-cut”
• Having certain certifications

By thinking outside the box and considering candidates who didn’t necessary meet the normal criteria, many of the employers interviewed for the article ended up with a superstar employee. Do you have candidates who are being overlooked because they don’t have the perfect resume?  How do you convince hiring managers to give them a chance?  If you feel strongly about an “outside-the-box” candidate for a certain position, you may want to suggest that the employer hire the person on a contract-to-direct basis.  That way they can try out the unconventional candidate without the risk of bringing them on permanently.

According to the article, spending on equipment and computer software incresased by 21.9 percent in the second quarter of this year as compared to the first.  And a Corporate Executive Board survey of 400 companies revealed that 51 percent of those companies plan to boost their capital spending in the next 12 months.  Top Echelon Contracting also noted this trend in a blog post last month where we reported that many companies are finding they can no longer put off computer upgrades and are investing more in Information Technology as a result.

So what does this mean for hiring?  Well, traditionally, increase in hiring does follow a surge in capital spending because companies need people to run new machines, and the suppliers that benefit from these equipment shopping sprees need to increase headcount to handle the demand.

But nothing has been normal in this most recent recession or ensuing recovery, and many companies may simply be making these investments to increase efficiency without adding bodies.  Or, as we blogged in regards to the recent computer upgrade surge, many others will turn to contract staffing to handle those upgrades so they don’t have to increase their headcount while the economy is still shaky.

According to the article, temporary/contract staffing has led all other sectors, adding 379,000 jobs since September.  There has been steady growth in employment/contract staffing over the past 24 weeks, with contract staffing showing a 25% increase in July 2010 compared to July 2009.

“(Companies) don’t want to make a commitment to new fixed costs that they have to get rid of if they bet wrong … and the economy takes a double dip,” American Stafing Association President and CEO Richard Wahlquist said in the article.

Before the bill was signed, accepting temporary/contract work could result in lower unemployment benefits for the worker.  Why?  After a worker has received federal unemployment benefits for 52 weeks, federal law requires the state unemployment agency to review the worker’s wages to determine if enough had been earned to qualify the worker for regular state benefits.  Many workers who had accepted short-term assignments during that time found that their unemployment benefits were reduced as the temporary/contract assignment, rather than their previous permanent work, was used as the base to determine their unemployment rate.

That has changed thanks to the Emergency Unemployment Compensation Fix (EUC Fix) that was included in the unemployment benefit extension bill.  Now if a reassessment would result in the worker receiving $100 or 25 percent less than the rate they were previously earning based on their permanent employment, the worker would qualify for the higher, federal rate.

An article by The Christian Science Monitor titled “Unemployment Extension 101: Why now is a good time for temp jobs” does a good job of explaining this and answering some of the questions workers may have about accepting temporary/contract work.

The article provides many arguments recruiters can use to combat this “hire first, ask questions later” approach to hiring.  As a recruiter, you could point out to the employer that weak hires produce 25-600% less than top performers.  A bad hire could cause a reduction in customer service, and as a result, a decrease in the company’s sales and reputation.  Bad employees require more management and HR time, which of course costs more money.  They cause more mistakes, which again, reduce the company’s profits.  And when the employer finally realizes that the employee is not working out, there is all the cost and time investment required to hire someone new.

That is just a small sampling of some arguments the article provides for you to put in your arsenal for the next time a hiring manager or HR person asks you to simply put a butt in the chair.  However, while all of these arguments may be effective, there are going to be times when the company really does need someone quickly and will not be talked out of speeding up the hiring process.  So how do you comply with their requests without running the risk that they will be disappointed with the hire . . . and  you?  Well, you can suggest that they hire someone on a contract-to-direct basis.  That way, they can get someone started quickly, and if it does not work out, they can easily end the assignment and try someone else.  This way, you can protect your reputation and give your client what they want!

In the article “It’s Official: We’re All Burnt Out,” CNNMoney.com reported on recent Department of Labor statistics showing that worker productivity fell 0.9 percent in the second quarter, which represents the first decline in productivity in 18 months.  Many see this as a sign that employers can no longer cut costs by reducing their workforces and working remaining employees harder as was the trend throughout the recession and beyond.

“What’s happended is a lot of U.S. companies have reached the limit of how much they can slash their workforce and work existing employees to the bone,” said Nariman Behravesh, chief economist with IHS Global Insight, in the article. “At some point, even weak spending growth will require more businesses to hire more people to meet the demand.”

As we have pointed out several times in this blog, employers have been reluctant to get back to hiring during this so-called recovery.  But according to another CNNMoney.com article, companies need to take the lead and start hiring rather than waiting for the economy to bounce back because it never will unless people get back to work.  Hopefully this loss of productivity is the catalyst employers need to beef up their workforces, but the truth of the matter is that they will still wait as long as they can while the economy remains uncertain.

We’ve already discussed how, following recessions, contracting tends to pick up before permanent hiring, and that seems to be true this time based on the surge of contract placements we’ve seen here at Top Echelon Contracting and some of the items that we have read and blogged about.  Given the current scenario where employers need extra help but are still worried about the economy, we can only imagine that the trend of turning to contract staffing will only continue.

Again, manufacturing and healthcare are leading the way.  Manufacturing employment increased by 36,000 in July, and the motor vehicles and parts sector had fewer seasonal layoffs than they normally have in July. Manufacturing has added 183,000 jobs since December.

Healthcare employment went up by 27,000 jobs in July and has gained 231,000 jobs over the past 12 months.

More details about the current employment statistics are available on the Bureau’s “Employment Situation Summary.”

As the economy continues to remain uncertain, hiring managers are still reluctant to hire but are slowing finding that they need additional help.  So if they have to hire and add to their headcount, they only want to do so if they can find the so-called perfect person to fill the gap. Not only does this slow the hiring process to a near stop, but it also prevents you from placing some great talent that your clients won’t even consider because those candidates just happened to have had a run of bad luck during the recession.

So what can you do? Well, you can offer to let your clients “try” your star candidates before they “buy” them by hiring them on a contact-to-direct basis.  Not only will this help you place some of your best talent, your clients will be grateful to you for not letting them pass up on someone who could end up being the real “perfect candidate!”