STAYING ON TRACK | PAGE 21

“NOTE FROM THE EDITOR

INSIDE THIS ISSUE

Hello July! Can you believe that it’s already the second half of the year? As we enter the second half of 2014, the staff at DCR TrendLine is hard at work to provide you with key insights into the temporary staffing industry. Our up-to-date research and analysis of the contingent space ensure that you have a clear reading of what’s happening in the world of contingent worker supply and demand.

The DCR National Temp Wage focuses on wage trends over the year and analyzes the usage of temporary workers and related developments in the economy and job market. While the latest job numbers from the Bureau of Labor Statistics have been positive, we examine why some economists are still concerned about the state of the economy.

Every month we’ve been talking about the growing utilization of temporary workers across multiple industries. This month is no exception with economists confirming that temporary workers are becoming a significant part of the American workforce. We discuss why some labor activists are worried about this growing dependence on temp workers as it relates to workforce management and labor policies.

This month DCR TrendLine is focusing on the Information Technology (IT) industry. Our first article on this topic examines the skill gap in the industry and how companies are attempting to bridge it. The next article focuses on industry-based employment with the DCR TrendLine IT Employment and Wage Index. Look for our job title focus on software developers.

Everyone’s been talking about big data and predictive analytics and their application in improving business processes. Until recently, human resource management has been virtually untouched by this field. We look at how predictive analytics is being applied to talent management and offer suggestions on three different approaches companies can take to get started in talent analytics.

Staying on the topic of human resources and analysis, our next article identifies and discusses six talent acquisition metrics that companies should be looking at to monitor the effectiveness of their recruiting campaigns.

Our feature article this month is particularly applicable to companies with contingent workforce programs. We look at the challenges companies often face, and offer tips on keeping their CW program running smoothly and on track.

Our final article this month highlights the application of cloud computing and the growing trend of offering everything as a service. We examine a new buzzword in the industry – Workforce-as-a-Service (WaaS) – and its potential advantages and usage towards talent acquisition and management.

Ammu WarrierAmmu Warrier, President

“Even with the continued slow pace of economic recovery, demand for temporary and contract workers continues to increase across most sectors. This is positive for job seekers looking for employment flexibility or a bridge to a permanent job.” ~Richard Wahlquist, President and CEO of the American Staffing Association.

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Note from the Editor...............................................................................................................................................page 1DCR National Temp Wage Index..........................................................................................................................page 2Temps No Longer Temporary................................................................................................................................page 6Bridging the Skills Gap in I.T.................................................................................................................................page 8Industry Highlight: Information Technology Index.......................................................................................page 11Predictive Analytics Applied in HR.....................................................................................................................page 146 Talent Acquisition Metrics to Tune Into.........................................................................................................page 18Staying on Track........................................................................................................................................................page 21Everything-as-a-Service.......................................................................................................................................page 23Methodology.............................................................................................................................................page 26References.................................................................................................................................................page 27About DCR..................................................................................................................................................page 28

DCR NATIONAL TEMP WAGE INDEX

“The DCR National Temp Wage Index continues to rise steadily in July 2014. Job numbers released by The Bureau of Labor Statistics (BLS) showed that non-farm payrolls added 217,000 jobs in May 2014. The unemployment rate stayed unchanged at 6.3 percent.

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Professional and business services added 55,000 jobs, while the healthcare sector gained 34,000 jobs – twice its average monthly gain for the past 12 months. Average hourly earnings increased 5 cents to $24.38, and the PayScale Index expects to see a 0.8 percent growth in wages for the second quarter of 2014. Over the past 12 months, wages are up 2.1 percent and inflation has risen 1.6 percent.

The number of U.S. temporary help services job increased by 14,300 jobs, totaling almost 2.9 million jobs. The temp penetration rate remained the same at a high of 2.07 percent.

The U.S. employment services industry had revenues of $68.06 billion in the first quarter of 2014, according to seasonally adjusted estimates from The Census Bureau. This is a 2.6 percent increase from the fourth quarter of 2013. The employment services category includes employment placement agencies, temporary employment agencies, and professional employer organizations.

The American Staffing Association (ASA) Employment and Sales Survey found that U.S. staffing companies employed an average of 2.96 million temporary and contract workers per week in the first quarter of 2014, a growth of 3.2 percent from the prior year.

“The underlying hiring trend…is encouraging, with more good news expected through the summer and into the autumn months.” ~Bart van Ark, Chief Economist at The Conference Board

DCR NATIONAL TEMP WAGE INDEX

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According to a national employment report released by the Society for Human Resources Management (SHRM), hiring in the U.S. manufacturing and

services sector for June is expected to reach a four-year high. The report’s survey found that 61.4 percent of manufacturing companies have plans to hire

in June, while 49.6 percent of service-sector employers plan to add to their workforces.

In April 2014, the number of U.S. job openings increased by 6.9 percent compared to the previous month. The job openings rate, which is a measure of job

openings compared to total employment, rose from 2.9 percent in March to 3.1 percent in April, according to the BLS.

JUNE HIRING TO INCREASE

Year-Over-Year Temp Job Growth, Seasonally Adjusted

Source: BLS

DCR NATIONAL TEMP WAGE INDEX

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Though the economy continues to add jobs every month and unemployment remains steady, some economists are concerned that the quality of jobs is

lacking. The number of jobs in typically well-paying fields, such as manufacturing, construction, and government, have shrunk, while lower-wage positions

have grown. The U.S. has 1.6 million fewer manufacturing jobs than when the recession began, but 941,000 more jobs in the accommodation and food

service sector. Over 40% of the jobs added in the past year have been in generally lower-paying fields.

Compared to January 2008, jobs in construction are down by 20 percent, manufacturing by 11.7 percent, and banking by 4.8 percent. Over the same

period, temp jobs are up 16 percent and leisure and hospitality positions have increased by 8.1 percent.

However, Mark Zandi, chief economist at Moody’s Analytics says that the quality of new jobs has improved in the last twelve to eighteen months. In May

2014, the strongest sectors were business and professional services and healthcare.

DESPITE JOB GROWTH, ECONOMISTS ARE CONCERNED“ ““It is a quality game much more than it is a quantity game. We’re not really seeing that high-wage recovery that is indicative of a strong consumer lining their pockets with wages and going out and spending.” ~Lindsey Piegza, Chief Economist at Sterne Agee

“Now we’re seeing increasingly greater numbers of high-paying jobs being created and some middle-paying jobs. My sense is, going forward, we’re going to see much better-quality job creation.” ~Mark Zandi, Chief Economist at Moody’s Analytics

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DCR NATIONAL TEMP WAGE INDEXDESPITE JOB GROWTH, ECONOMISTS ARE CONCERNED

The U.S. economy has grown at a pace of 2 percent since

recovery began in mid-2009, and many economists project

a growth pace of at least 3 percent in the second quarter of

2014.

The Wall Street Journal

Employment Change in Sectors since Start of Recession

TEMPS NO LONGER TEMPORARY

Contract workers account for over 2.3 percent of U.S. employment, according to Bureau of Labor Statistics (BLS) reports. Research from online job site CareerBuilder.com shows that 42 percent of employers intend to hire temporary or contract workers as part of their 2014 staffing strategy.

Economic data also confirms that temporary workers are becoming a significant part of the American workforce. In March 2014, temporary work made up more than 2 percent of the workforce, a peak not seen since April 2000.

6The Wall Street Journal

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TEMPS NO LONGER TEMPORARY

“We argued when the recovery began that there would be a structural shift. We were hearing from members who were hearing from their clients, [that] they were more likely to use temp and contract workers.” ~Steve Berchem, COO of American Staffing Association

“I think on balance, they are a positive reflection of the extent to which production has become more flexible, a reflection of hybrid operations. Some people don’t like it. But that’s neither here nor there. That’s where everybody’s moving.” ~Jerry Jasinowsky, former Head of National Association of Manufacturers

“Workers increasingly serve businesses that do not officially ‘employ’ the worker – a distinction that hampers organizing, erodes labor standards and dilutes accountability.” ~Catherine Ruckelshaus, General Counsel for the National Employment Law Project

Experts point to the Affordable Care Act (ACA) as a relevant factor in this trend, as employers strive to avoid benefit expenses. However, recent clarifications to ACA are aimed at closing this loophole. Analysts predict that temp and contract employment will continue to increase as baby boomers retire from full-time jobs.

Some industries, such as manufacturing, are highly dependent on temporary workers. An estimate from the W.E. Upjohn Institute for Employment Research states that manufacturing companies employ 40 percent of all contract workers.

Labor activists have concerns over the continued utilization of contract workers, citing risks such as lower paychecks compared to full-time workers and a lack of unionization. Economists worry that since temp workers are easier to release than full-time workers, companies will be able to avoid responsibility. Eileen Appelbaum from the Center for Economic Policy and Research says, “In the private sector there’s no counterbalancing power. The decision is almost costless to them.” “

ECONOMISTS’ CONCERNS

BRIDGING THE SKILLS GAP IN I.T.

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For many years, companies have been turning to alternative solutions to permanent hiring to fill information technology (IT) positions in their workforce. A new survey from Sologig and Harris Poll for CareerBuilder asked hiring managers in the IT industry to explain their recruiting challenges. Many pointed to gaps in expectations around wages, shifting technology, and above entry-level job requirements as the reasons for the skills gap in the industry.

“At the pace certain programming and development skills evolve, there’s no silver bullet for recruiting tough-to-fill technology jobs. Employers have to constantly evaluate their talent needs through workforce planning and ensure their compensation is competitive enough to attract top talent. IT workers, meanwhile, must always be polishing their existing competencies and acquiring new ones to stay relevant.” ~Eric Presley, Chief Technology Officer at CareerBuilder

What’s Causing the Skills Gap?

Source: Sologig and CareerBuilder

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BRIDGING THE SKILLS GAP IN I.T.

To bridge the skills gap, IT hiring managers are increasingly engaging contingent workers. TEKsystems, an IT staffing solutions provider, says that 25 to 35 percent of IT leaders expect that contingent labor will make up between 11 and 25 percent of their overall IT workforce by 2018. The same study found that 69 percent of IT leaders believe that contingent labor is critical to the success of their organization’s business operations. However, 58 percent say that finding contingent workers that meet company needs is difficult.

IT leaders also struggle with aligning their contingent labor strategy with company-wide workforce planning strategy. More than one in ten IT leaders say their use of contingent labor is not defined, and only 11 percent say that their HR department understands their contingent workforce needs. Additionally, only nine percent believe that their HR department has the expertise to effectively source contingent worker and 6 percent believe that HR has domain-expertise to effectively screen candidates.

BRIDGING THE GAPThe IT Skills Gap, The Difference Between Hires and Job Openings

Source: BLS

BRIDGING THE SKILLS GAP IN I.T.

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TOP STAFFING CHALLENGES

IT Hiring Managers’ Top Staffing Challenges

Source: CareerBuilder and Sologig

A different study by Sologig and CareerBiulder in March 2014 revealed that the top staffing challenges in information technology staffing are related to the retention and recruitment of high-skill talent.

INDUSTRY HIGHLIGHT: INFORMATION TECHNOLOGY INDEX

For the past two decades, employment in Information Technology (IT) has grown rapidly, though declining during the recession and remaining relatively static since 2011. As per the Bureau of Labor Statistics (BLS), between 2001 and 2012, employment in computer systems design and related services grew by 18 percent, or by 232,300 jobs. On a year-over-year basis, IT employment has grown by 2.88 percent since May 2013 adding 130,100 IT workers.

According to TechServe Alliance, the national trade association of the IT & Engineering Staffing and Solution industry, the number of IT jobs grew 0.28 percent from April to May 2014, to a total of 4,650,000 jobs. Engineering employment has grown 1.82 percent since May 2013 adding 44,800 engineering workers.

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DCR TrendLine IT Employment and Wage Index

Source: BLS

INDUSTRY HIGHLIGHT: INFORMATION TECHNOLOGY INDEX

“We continue to see a consistent steady climb in IT employment numbers. Growth in May IT employment was virtually identical to April’s numbers. On the engineering side, we saw some acceleration in growth compared to the past two months. Put simply, demand for IT and engineering talent will remain robust for the foreseeable future.” ~Mark Roberts, CEO of TechServe Alliance

Employment and output in the industry are projected to grow rapidly through 2020, outpacing similar professional industries and the economy as a whole. Between 2010 and 2020, output in computer system design is expected to grow at an average annual rate of 6.1 percent compared with 2.9 percent for all industries. This growth is attributed to firms and individual consumers continuing to increase their usage of information technology services, with cloud computing contributing substantially to industry demand. Cybersecurity is another area expected to lead to employment increases.

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Key IT Sectors Employment

Source: BLS

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The BLS defines the job title of ‘software developer, systems software’ as an IT professional who researches, designs, develops, and tests operating systems-level software, compilers, and network distribution software for medical, industrial, military, communications, aerospace, business, scientific, and general computing applications. As of May 2013, the employment estimate for this occupation was 373,510 with a mean annual wage of $104,480. The industry with the highest level of employment for this job title is computer systems design and related services, and the industry that pays the highest is other information services. The job title is expected to grow by 22 percent by 2022, a rate much faster that most professions.

INDUSTRY HIGHLIGHT: INFORMATION TECHNOLOGY INDEX

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I.T. STAFFING

JOB TITLE FOCUS – SOFTWARE DEVELOPER, SYSTEMS SOFTWAREAnnual Mean Wage by State

Source : BLS

Employment and Employment Growth, Projected 2010 to 2020

Source : BLS

Occupation Employment in 2010 (in thousands) Projected growth 2010-2020 Median Annual Wage (2011)

Computer systems analysts 135.3 43.1% $82,160

Computer programmers 116.8 28.8% $72,100

The Operating Practices Report by TechServe Alliance reveals that median IT and engineering staffing firm revenue was up 9.6 percent in 2013 from the prior year. According to CareerBuilder and Economist Modeling Specialists (EMSI) research, computer support specialists and computer programmers are among the fastest growing temp positions at a growth rate of 19 percent each.

Difficulty in finding skilled workers is contributing to the growing demand for IT contractors. More than 60 percent of companies using staffing solutions agree that the primary reason for them to approach an employment firm is to find an IT candidate for a vacant position.

Monster.com advises those looking to enter the IT industry to start off with temp positions, especially in the areas of technical support, low-level web skills, and programming.

Software developers, applications 174.0 57.4% $88,120

Computer support specialists 107.4 43.1% $48,800

Software developers, system 117.8 71.7% $94,570

PREDICTIVE ANALYTICS APPLIED IN HRGartner expects the market for big data and analytics to generate $3.7 trillion in products and services and create 4.4 million new jobs by 2015. According to the U.S. Census Bureau, over 75.6 percent of households are online, meaning a large number of adult Americans are posting substantial personal information on the Internet. With this volume of data available, predictive analytics is emerging as an in-demand trend in human resources.

Businesses have increasingly used predictive analysis for years but it has only recently been applied in the area of human resources. Historically, firms have studied historical data in order to anticipate opportunity and risk, with industries such as financial, marketing, and healthcare utilizing analytics to consider factors such as credit scores, sales targets, and healthcare plans.

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Data Analysis Applied to Functional Areas

Source: Accenture

PREDICTIVE ANALYTICS APPLIED IN HR

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Companies have volumes of employee, HR, and performance data, ranging from demographic information, performance reviews, educational history, job locations, and other factors relevant to workers. Talent analytics would allow managers to use this data scientifically to make decisions about workforces and plan for the future, such as anticipating leadership and talent gaps and developing candidate pipelines

In the growing field of talent analytics, recruiters are using predictive analysis to screen job candidates’ potential to become good employees. Talent analytics can be utilized to cross-analyze a candidate’s resume with personal information available on social networks such as Facebook, giving employers a tool to understand a candidate’s interests and personality. Data and analytics give HR professionals the opportunity to take a forward-focused and data-driven approach to talent management and people development.

According to a Deloitte survey of 436 North American companies, talent analytics is helping build better talent outcomes in regard to leadership pipelines, talent cost reductions, efficiency gains, and talent mobility.

However, there is some resistance to the application of predictive analytics in human resources. While almost every business operation can be automated, the personal or ‘human’ aspect is difficult to integrate into technology. While it is getting easier to predict someone’s next action, we are still far away from digitized systems being able to understood and predict human emotion.

A study by Accenture finds that while analytics are becoming important to executive management, they are not considered a replacement for human resource departments. A survey by the Chartered Institute of Personnel and Development (CIPD) found that HR professionals also are reluctant to engage with numbers or are passive towards them, and only half of senior HR leaders actually think that they are able to link their data to key business and financial data.

Companies face challenges applying predictive analysis to human resources, as data analytics demands skills not commonly found in HR departments. A March 2014 report from Bersin by Deloitte found that 78 percent of large companies rated HR and talent analytics as ‘urgent’ or ‘important’ enough to place analytics as one of the top three urgent trends, but 45 percent of the same companies rated themselves as ‘not ready’ to pursue predictive analytics.

A different study from Bersin by Deloitte shows staffing for analysis is a top area of investment, and 31 percent of organizations surveyed either hired or transferred additional staff in 2013 to boost their analytics capabilities. Another 22 percent of organizations hired external consultants to help in their analytics initiatives.

“Skepticism about whether a data-driven world would be a better one still abounds. Some HR practitioners feel that analysts are not sharing enough data or insight and are operating without a full understanding of the purpose of analyzing people data, leading to a ‘bean counting’ approach to the measurement of people. Meanwhile, some analysts feel that HR practitioners are not asking the right questions. This is a healthy tension, but one which must be resolved if HR professionals are to fully embrace the talent analytics revolution, which is already central to business conversations.” ~John McGurk, Head of CIPD Scotland

People Data Demographics, skills, rewards, engagement

Categoiries of Data Examples

Performance Data Performance ratings, goal attainment, succession programs, talent assessments

Program Data Attendance, adoption, participation in training and development, key projects and assignments

TALENT ANALYTICS

RESISTANCE AND CHALLENGES

Talent Data Available to Companies

Source: Bersin by Deloitte

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PREDICTIVE ANALYTICS APPLIED IN HR

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Source: Deloitte

HR Executive’s Assessment of HR’s Analytics Capability Levels

PREDICTIVE ANALYTICS APPLIED IN HR

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For companies looking to apply predictive analytics to their human resources function, the transition can be challenging. However, there are some potential starting points:

1) Add some unexpected rolesAdding some niche positions such as demographers, business intelligence specialists, or mathematicians can help to bring in a different view while still being hands-on with numerical analysis and generating insights from data.

2) Invest in the equipmentEquip the team with HR technology and training in visualization and project management. Also building a close relationship between HR and IT helps as often HR organizations working in predictive analysis have an IT specialist on the HR staff.

3) Make analytics user-friendlyUse tools such as dashboards to make analytics easy to understand for business units. Search for technology that incorporates the user experience and visualization, so that it is approachable to business users.

3 WAYS TO START

6 TALENT ACQUISITION METRICS TO TUNE INTOWith human capital management taking center stage in corporate strategy, measuring the performance of talent acquisition campaigns has become important. This requires tracking key metrics that can indicate the effectiveness of a recruitment campaign and point out areas where improvement is required.

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Most Frequently Measured Talent Acquisition Metrics

Source: Staffing.org

Time to fill, or time to start, is a common metric in recruitment that measures the average number of calendar days from the date a job requisition is approved to the date that a new hire begins work.

As per a recent Society for Human Resource Management (SHRM) report, most large organizational typically fill a position in 43 days while smaller companies take 29 days to fill.

This metric allows recruiters to determine the effectiveness and efficiency of the hiring process and to manage hiring expectations across the company.

Cost per hire is calculated by summing up all recruitment expenses, including advertising, agency, travel, interviewing, relocation expenses, referral bonuses, and HR departmental costs, and dividing it by the total number of new hires for the calendar year.

According to SHRM, the cost-per-hire for small organizations (less than 1,000 employees) is around $3,079 while larger companies have a cost-per-hire of $4,285.

Cost per hire allows managers to understand how much they are currently spending on hiring individuals and if there are improvements that can be made to the hiring process, such as bringing in an agency or recruitment process outsourcer (RPO) to more effectively manage costs.

Many companies measure the quality of their hires by tracking turnover and looking at performance appraisal ratings. Since this metric can vary by organization and industry, it’s difficult to report on. However, once an internal benchmark is set, HR professionals can begin to assess quality of hire. ERE, a recruiting community, suggests defining quality of hire as how well a new hire meets the performance needs of the position.

Managers find it valuable to discover the sources of applicants, as this shows which recruiting channels are the most effective in attracting candidates to the organization. It also reveals how various sources compare in terms of quality, quantity, speed, and effectiveness. To find the percentage rate for a specific source, divide the number of source hires by the number of external hires.

Candidate satisfaction data is driven by the percentage of new hires that are satisfied with the hiring process. Candidate satisfaction surveys help organizations determine if the recruiting process has a positive impact on the employment branding of the company.

Pipeline development refers to the number of potential candidates that a recruiter has developed relationships with for key strategic positions. Often this data is managed through an effective candidate relationship management system. Similar to tracking pipeline development of sales personnel, measuring recruiter candidate pipelines can improve time to fill, cost per hire, and quality of hire.

1) TIME TO FILL

2) COST PER HIRE

3) QUALITY OF HIRE

4) SOURCE ORIGIN

5) CANDIDATE SATISFACTION

6) PIPELINE DEVELOPMENT

6 TALENT ACQUISITION METRICS TO TUNE INTO

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6 TALENT ACQUISITION METRICS TO TUNE INTO

Source: Staffing.org

STAYING ON TRACK

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Companies with blended workforces often face challenges in managing different types of workers. Research from Aberdeen Group suggests that almost 25 percent of the total workforce can be considered contingent or temporary, and this will only continue to grow. As non-employee workers become a significant part of total workforces, contingent workforce management becomes an important part of companies’ operational goals.

While using contingent workers offers many benefits such as cost savings, increased efficiency, administrative savings, broader talent pools, and flexibility, keeping a contingent workforce programs on track is tricky. This is especially true when a company uses multiple staffing providers to fulfill a range of job roles. Analysts estimate that the percentage of ‘troubled’ projects staffed through temp workers that fall short of time, budget or quality goals ranges from 40 to 60 percent.

Increasingly, companies are turning to Managed Service Providers (MSPs) to manage the multiple staffing vendors and keep their contingent workforce programs running smoothly. According to industry analysts, almost 70 percent of the country’s largest employers are using a MSP to manage their contingent workforces. The MSP serves as a neutral party that offers a workforce solution while ensuring efficient operation and leveraging multiple staffing companies to obtain competitive rates. MSPs often use a Vendor Management System (VMS) as a software tool to provide transparency and efficiency in the management of the contingent workforce. Companies often cite having a single point of contact as the biggest advantage of using a MSP.

STAYING ON TRACK

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TIPS TO KEEP YOUR CONTINGENT WORKFORCE PROGRAM ON TRACK

To get started on keeping their contingent workforce program on track, managers should put thought and emphasis on certain tasks, even if using a MSP.

1) Define the objectives of the contingent workforce management program clearlyDefining and prioritizing key goals will help to align the program and develop metrics to ensure that these objectives are being met. To encompass concerns from all areas of the organization, involve hiring managers as active participants in the design of the program.

2) Establish a budgetHaving an established budget lets you plan and manage the workforce program with more clarity and transparency. A defined budget also provides a framework for evaluating workforce management options.

3) Minimize resistance from the beginningAs with the adoption of any new process, resistance is expected from stakeholders who will be impacted by changes. From the very beginning, attempt to minimize this resistance by having clear communication about all aspects of the program and explaining the benefits of active program participation.

4) Develop a communications planWhether using an external MSP or managing contingent workers internally, clear and effective communication is a primary factor in promoting an environment of transparency and trust. If you’re using an external MSP, it also helps all parties to clearly communicate your priorities and expectations.

5) Create a change management processImplementing a contingent workforce program is sure to bring about change, and having a process to deal with bumps along the way will make the transition easier for all stakeholders. Establishing a clear governance structure with defined roles, schedules, issue resolution processes, and approvals is also helpful in avoiding navigating hurdles.

6) Beside ‘must have’ goals, also formulate a wish listThe best program managers go beyond the essentials to deliver benefits that might be on your hiring managers’ wish lists, such as increasing program participation, acting as an advisor, educating hiring managers, and coaching suppliers.

Workforce Management Objective MSP Users Non-MSP Users

Cost savings 9% 7%

Time-to-fill an open requisition 9.8 days 12.2 days

Compliance to internal and federal policies regarding contract labor 64% 46%

Onboarding timeframe 2.9 days 5.7 days

Contingent Workforce Management Performance, MSP vs. Non-MSP

Source: Aberdeen Group

There is no denying that cloud computing changed the way IT serves the enterprise. For some years now, software, databases, customer relationship management, and other key elements of information technology have been pushed into the cloud to be deployed “as-a-Service”. For example, the models of Software-as-a-Service (SaaS), Data-as-a-Service (DaaS), and Infrastructure-as-a-Service (IaaS) have become an everyday part of corporate vocabulary.

A research study by TheInfoPro found that the global cloud computing market would grow at a 36 percent compound annual growth rate (CAGR) through 2016. Gartner estimates that global end-user spending on public cloud services will be more than $180 billion by 2015. And Forrester forecasts that the global market for cloud computing will grow to more than $241 billion in 2020. According to McKinsey & Company projections, the total economic impact of cloud technology could be $1.7 trillion to $6.2 trillion annually in 2025.

Public Cloud Services Market Growth, 2010 to 2015

Source: Gartner

EVERYTHING-AS-A-SERVICE

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As the idea of sharing and scaling services that were once local and isolated continues to gain popularity, we’re starting to see almost every function being delivered as-a-Service to businesses, even outside of enterprise technology. For example, one could say that companies like Airbnb are housing clouds that deliver Housing-as-a-Service, or Zipcar and Uber are car clouds offering customers Transportation-as-a-Service. Even 15 percent of U.S. healthcare systems leverage cloud computing for storage of images, with this number expected to increase to more than 50 percent over the next three years.

Industry experts are now looking at a future where any functional service can be “clouded”.

Everything-as-a-Service (XaaS), also known as Anything-as-a-Service, is a collective term that stands for a number of things that could be offered via cloud.

In the staffing industry, a term and concept that is gaining momentum is “Workforce-as-a-Service” (WaaS), where online platforms like eLance enable employment to be light on human assets and have minimal fixed costs. WaaS basically provides companies with the flexibility of an on-demand workforce, where they can engage the right talent when it’s needed. Onforce, a cloud-based platform for technical talent, says that companies can save 20 to 60 percent on labor costs by tapping into WaaS.

Workforce-as-a-Service offers companies several advantages, including:

“If you look at the HR market, this is a very big market that’s grown very quickly. This is at least an $8 billion market. HR [software as a service] is one of the biggest spaces in SaaS today…Our view is that it’s a very big market that’s going through a very big refresh cycle and there is a lot more opportunity for growth.” ~Mike Zappart, Principal at Adams Street Partners

“Today’s employment model takes into account only the primary talent of an individual and ignores the reality that humans are generally multidimensional and useful outside the scope of their stateful roles. This means valuable human capacity is wasted. If human capacity were aggregated as liquid, stateless supplies, it would allow companies to spin up capacity to meet the demand of projects.” ~ Richie Etwaru, Group Vice President of Cegedim Relationships Management

- Immediacy of labor- Faster speed of work- Lower costs

“Business leaders interested in the future of IT should stop thinking of ‘the cloud’ as a noun and start thinking about ‘clouding’ as a verb…Clouding is not new, and compute, storage and network are not the only things that can be clouded.” ~Richie Etwaru, Group Vice President of Cegedim Relationship Management

EVERYTHING-AS-A-SERVICE ““WORKFORCE-AS-A-SERVICE

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According to Richie Etwaru, Group Vice President of Cegedim Relationship Management, under the umbrella of “Everything-as-a-Service” (XaaS), companies can explore clouding the resource of human capacity. For example, expertise could be delivered as a service. This creates the opportunity to leverage what Etwaru describes as “humans-as-a-service” (HuaaS), the model to which WaaS is a predecessor. HuaaS could be a disruptor in how companies source and utilize their most valuable assets - human capacity.

Changing the current employment model by aggregating human capacity into a pool of supply, as companies such as TaskRabbit and eLance do, would allow companies to ramp up and divest of human capacity to meet demand as needed. This is similar to the way compute and storage clouds are currently used.

Essentially the evolution Etwaru is discussing is on-demand talent in the cloud, with the ability for any company to source individual talent or groups of talent for anything at any time. On some levels, this evolution is already taking place with the sourcing of temporary workers globally via freelance and crowdsourcing sites. The next step in the evolution would be to scale this flexible model effectively and efficiently for enterprises and also smaller companies.

While the model is appealing in theory, there are some caveats to consider. When using WaaS or HuaaS for complex projects or long-term engagements, there are some issues that companies need to consider. These concerns include worker screening, worker classification, and worker management.

EVERYTHING-AS-A-SERVICE HUMANS-AS-A-SERVICE

METHODOLOGY

The DCR National Temp Wage Index is developed to assess the relative movements of temporary wage rates in the U.S. economy. The wage rates for temporary workers or contingent workforce are based on payments made by staffing firms to these workers based upon hours worked. Data collected from sources such as Bureau of Labor Standards (BLS) and other government sites as well as an internal pool of staffing companies and consultants, is aggregated and classified based on regions and skill categories, to arrive at an aggregate index.

The baseline for the index is set at 100 for January 2007. Index value for a particular month indicates relative wages with the said baseline and is representative in terms of direction and scale of change. Five years of data has been included to observe seasonal patterns and distinguish seasonality from long-term wage movements. The data and the model has been further refined over last six months.

DCR TrendLine combines the exhaustive data from BLS with practical and more recent developments and data from on-field consultants and clients, to provide timely near-term indications of trends and consistent long-term actionable and objective information.

DCR TrendLine uses multiple economic variables to ensure the robustness of its forecasts and cross-validation of trends.

Key data sources and parameters of interest included and influencing the index are:Unemployment dataGross Domestic ProductPrime rate of interestNew and seasonal Job openingsNon Form employmentJob OpeningAll ExportAll ImportAverage Hourly Earnings of All Employees Total PrivateAggregate consultant data on job market parameters

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SOURCE DATA

REFERENCES

http://online.wsj.com/articles/u-s-adds-217-000-jobs-unemployment-rate-steady-at-6-3-1402058042http://www.usatoday.com/story/money/business/2014/05/24/temporary-jobs-on-rise-in-shifting-us-economy/9273921/http://associationsnow.com/2014/05/temps-temporary-contract-workers-becoming-common/http://mms.businesswire.com/media/20140429005441/en/413330/5/TEKsystems-contingent-w.jpg?download=1http://www.careerbuilder.com/share/aboutus/pressreleasesdetail.aspx?sd=4%2F25%2F2014&id=pr820&ed=4%2F25%2F2099http://thehiringsite.careerbuilder.com/2014/03/21/top-10-staffing-challenges-industry/http://www2.census.gov/services/qss/2014/qssq1-14pr.pdfhttp://www.latimes.com/business/la-fi-jobs-20140607-story.htmlhttp://www.broadwayworld.com/bwwgeeks/article/IT-Employment-Grows-Steadily-in-May-Engineering-Job-Growth-Accelerates-20140611#.U5m7p5RdXk8http://www.bls.gov/opub/btn/volume-2/careers-in-growing-field-of-information-technology-services.htmhttp://insidetech.monster.com/benefits/articles/8621-break-into-it-with-temporary-workhttp://www.americanstaffing.net/newsroom/newsreleases/june_06_14.cfmhttp://methoblog.com/3_0/2014/04/information-technology-staffing-firms-in-2014/http://www.bls.gov/oes/current/oes151133.htm#nathttp://www.accenture.com/SiteCollectionDocuments/PDF/Accenture-Analytics-In-Action-Survey.pdfhttp://flexibleboss.com/2013/11/12/hr-failing-to-use-data-to-full-effect/http://www.forbes.com/sites/joshbersin/2013/02/17/bigdata-in-human-resources-talent-analytics-comes-of-age/http://www.bersin.com/blog/post/More-Money-for-Talent-Analytics.aspxhttp://www.hrtalentmanagement.com/2014/04/05/predictive-analysis-applied-to-human-resources/http://dupress.com/articles/hc-trends-2014-talent-analytics/#end-noteshttp://haveasanookday.com/2014/02/22/talent-analytics-how-to-find-top-talents/http://www.businessinsider.com/5-recruitment-metrics-every-hr-professional-should-report-part-1-2012-12http://www.huffingtonpost.com/richie-etwaru/enough-of-the-cloud-alrea_b_5056275.htmlhttp://visual.ly/evolution-workforce-servicehttp://informationevolution.com/workforce-as-a-service-waas/https://www.linkedin.com/today/post/article/20140415235145-4220955-enough-of-the-cloud-already-what-is-next-for-enterprise-technology?trk=api*a129380*s137781*http://www.forbes.com/sites/louiscolumbus/2013/09/04/predicting-enterprise-cloud-computing-growth/http://www.forbes.com/sites/louiscolumbus/2013/11/16/roundup-of-cloud-computing-forecasts-update-2013/http://softwarestrategiesblog.com/2012/01/17/roundup-of-cloud-computing-forecasts-and-market-estimates-2012/http://www.forbes.com/sites/louiscolumbus/2013/02/19/gartner-predicts-infrastructure-services-will-accelerate-cloud-computing-growth/http://americancityandcounty.com/mag/managing-contract-workforce\http://techcrunch.com/2014/06/10/combining-big-data-and-human-resources-nets-visier-25-5-million/

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