Contingent Workers

Phil SamponaLori Freitas

Background

• The temporary or contingent workforce is the fastest growing segment of the national workforce.

• Contingent workers are those who are hired through staffing firms or leasing companies and whose jobs are structured to last only a certain length of time.

• The contingent workforce may include part-time temporary workers, independent contractors, consultants, contract employees, leased employees, and direct hires.

• While most companies hire only a few contingent workers at a time, some firms may lease their entire workforce on a quasi-permanent basis.

• Using contingent workers may provide employers with flexibility and cost-

savings. However, there are numerous legal and practical considerations that employers must take into account before utilizing contingent workers.

• The good news for unemployed Americans is that companies seem poised to begin hiring.

• The bad news is that these are likely to be temporary jobs, often without healthcare and other benefits.

• Gary Chaison, professor of industrial relations at Clark University in Worcester, Mass states, “we might be heading into a time of large-scale hiring of contract workers.”

• According to the Littler Report, 50% of the workforce added in 2010 will be made up of one form or another of contingent workers.

http://www.businessweek.com/managing/content/jun2009/ca20090630_912379.htm

Exploration

• According to a recent survey by the Human Capital Institute (HCI), contingent workers make up one-third of the U.S. workforce, and that number is growing.

• BusinessWeek, working with Seattle's PayScale, came up with a ranking of the highest-paid contingent workers: – Database administrators—the top-paid category on the list—earned an annualized

salary of $80,300 and were paid 22.6% more than their permanent colleagues. Of course, permanent employees enjoy benefits and can more easily advance within the company.

• Employees who take temporary work not only get a salary that is sometimes higher than what a permanent employee gets (though usually without comparable benefits), but they can gain valuable experience and set themselves up for a permanent job when the economy recovers.

• "If somebody is out of work, what better way to network, display your skills, work ethic, and commitment to a position to an audience that may be in a position to hire you," said Bill DeMario, chief operating officer for Ajilon Professional Staffing, a recruitment firm in Melville, N.Y. DeMario. "Companies are looking to bring in temporary workers for workloads where they had cut too deeply.“

http://www.clomedia.com/executive-briefings/2009/April/2620/index.php

Exploration

• Hypothesis: Fewer opportunities will exist in the future for traditional workers seeking full-time, full-benefit positions as companies seek to control costs by hiring contingent workers.

• Target Audience: Any person of job-bearing age (16 and older). Tried to get a variety of responses from individuals at different career levels and industry.

• Sampling Plan: A random sampling was used in an effort to capture the most amount of responses. The data type used was qualitative with nominal variables such as (yes/no , male/female, etc.).

• Question Types: The question types used were multiple choice and ranking.

• Method of Survey Administration: The majority of the surveys were sent to people via email and a few responses were collected via paper.

• Summary of Respondents: The survey was sent to 50 people with the target response range of 30. A total of 33 responses were collected.

• Factors: Age, gender, education, employment status, job characteristics (i.e. benefits, flexibility, compensation, etc.) and the economy.

Data Collection

• Potential Sources of Error:– Questions could have been more focused– Larger sample size would have provided more

insight

Data Collection

Demographics Dashboard

18%

3%

55%

21%

3%

A) High School B) Associates Degree

C) Bachelors Degree D) Masters Degree

E) Doctorate

What is the highest level of education you have completed?

A) Male

B) Female

0 4 8 12 16 20

17

16

A) 16-19 B) 20-29 C) 30-39 D) 40-49 E) 50-59+

0

2

4

6

8

10

12

14

16

1

15

85 4

Age Gender

Would You Consider Working for a Staffing Agency?

Yes

No

0% 10% 20% 30% 40% 50% 60% 70%

Flexibility Compensation Benefits Advancement Opporunities

Other0

4

8

12

16

5

14

4

8

2

Most Important Job Characteristics

Yes No0%

20%

40%

60%

80%

100%

73%

27%

People That Would Recommend Working for Staffing Agency

Demographics Dashboard2

Yes No0%

20%

40%

60%

80%

100%

73%

27%

Percentage of People that Would Use an Agency to Get Foot in the Door

7% 10%

19%

17%

10%

8%

15%

14%

Accounting/Finance

Telecommunications

Academic

Engineering

Energy

Construction

Pharmaceutical

Other

Industry Preference

06

12

15 14

2 2

Demographics Dashboard3

Is The Current Economy a Factor in Hiring Decisions

People that currently have full time jobs are willing to work for a staffing agency

One Sample Proportion Test

hypothesized value

sample proportion x sample size std error

30.3% 0.50 10 33 0.080000557

NULL : p<=30.3%

ALTERNATIVE: p>30.3%

test statistic (obs) 2.462 critical measure 1.645 one-tailed or two-tailed? 1

|obs| > critical? Yes

p-value 0.007 a-level 0.050

p-value < a-level? Yes

HYPOTHESIS TESTSfor the proportion

People that currently have full time jobs are not more willing to work for staffing agencyPeople that currently have full time jobs are more willing to work for staffing agency

REJECT the Null. People that currently have full time jobs are more willing to work for a staffing agency

People under 40 are more willing to work for a staffing agency to get their foot in the door

Two Sample Proportion Test

x-value sample 1 21 x-value sample 2 3sample size 1 24 sample size 2 9

pooled proportion 0.727 proportion 1 0.875 proportion 2 0.333People < 40 People >= 40

std error 0.174

NULL: p1 >= p1

ALTERNATIVE: p1 < p2

one-tailed or two tailed? 1

test statistic (obs) 3.112 critical measure 1.645

|obs| > critical?? Yes

p-value 0.000930 a-level 0.050

p-value < a-level?? Yes

HYPOTHESIS TESTS

People over 40 are more willing to work for a staffing agency to get their foot in the door.People under 40 are more willing to work for a staffing agency to get their foot in the door.

REJECT the Null. People under 40 are more willing to work for a staffing agency to get their foot in the door.

Companies are less interested in hiring full-time, permanent employees as a result of the current economy

Two Sample Proportion Test

x-value sample 1 15 x-value sample 2 2sample size 1 33 sample size 2 33

pooled proportion 0.258 proportion 1 0.45 proportion 2 0.06Less Interested Not Less Interested

std error 0.108

NULL: p1>=p1

ALTERNATIVE: p1 < p2

one-tailed or two tailed? 1

test statistic (obs) 3.659 critical measure 1.645

|obs| > critical?? Yes

p-value 0.000126 a-level 0.050

p-value < a-level?? Yes

HYPOTHESIS TESTS

Companies are not less interested in hiring full time, permanent employees as a result of the current economy.

Companies are less interested in hiring full time, permanent employees as a result of the current economy.

REJECT the null. Companies are less interested in hiring full time, permanent employees as a result of the current economy.

• Do the following factors contribute to companies increasing decisions to hire contingent workers:– Willingness to work on a

contingent basis– Importance of job

characteristics – Industry preference– Economy– Age– Gender

• Single and Multiple Regression Models were ineffective.– R^2 = 16%– Adjusted R^2 = 19%– P-values significantly

higher than alpha– Results were unreliable

Regression Analysis

• More detailed questions that would provide greater insight to identify contingent worker staffing trends

• Respondents knowledge of contingent labor

• Wider breadth of knowledge in industries that employees currently worked

Suggestions

• The majority of respondents stated that companies are more willing to hire leased and contingent workers than full-time, permanent employees

• People with full-time positions were the most willing to work for a staffing agency

• Survey found that respondents were most interested in job characteristics of compensation and advancement opportunities given the high unemployment rate

• Majority of people would use staffing agencies to get their foot in the door however, the majority of our respondents were between the ages of 20-29 and in our hypothesis test we found that people over 40 weren’t as willing to work for a staffing agency

• The majority of respondents stated that they would recommend working for a staffing agency

Conclusions

QUESTIONS?