Survey Confirms U.S. Shift Toward Temp, Contractors

Duke surveyU.S. firms are shifting away from hiring full-time, permanent workers, as worries over the fragility of the economy and the looming implementation of the national healthcare program cause CFOs to bring on temps and part-timers when workers are needed.

The quarterly Duke University/CFO Magazine Global Business Outlook Survey found 59% of CFOs have increased temporary and part-time workers and are turning with greater frequency to outside consultants and advisers. The survey shows work increased:

  • 31.7% for temp or contract workers;
  • 20.4% for part-timers;
  • 18.9% for outside consultants and advisers.

As it has for 18 years, Duke surveyed CFOs globally about their view of economic conditions nationally and at their own company. The results show the emotional impact of the recession lingers on, keeping CFOs wary about spending, especially on hiring, even as they are more optimistic about their company’s financial health.

In the U.S., the 530 CFOs say they expect profits to rise an average of 10%, and overall headcount to increase 2%.

“The expected 2% growth in employment is solid, given the context of long-run shifts away from full-time employees largely because of concerns about health care reform and economic uncertainty” said John Graham, Duke Fuqua School of Business finance professor and director of the survey. “Another trend that is affecting the growth in domestic employment is the hiring by U.S.-based companies of full-time employees in foreign countries. More than one-in-four U.S. CFOs say their firms have hired full-time employees in other countries, and that number is expected to accelerate.”

Economic uncertainty was cited by 44.3% as the reason for not hiring permanent full-timers. The new healthcare law was cited by 38%, while 24% said salary considerations kept them from full time hiring.

Though outsourced employment will grow 3%, significantly faster than other types of workers, full-time headcount is expected to increase 1.8% over the next 12 months. That’s only somewhat more than the 1.5% growth they expected in the September 2012 survey.

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At least some of those full timers will be added internationally. Of the 28% of companies with foreign workers, almost three-in-four expect to add workers, with the majority of them adding at least as many overseas as in the U.S.

Temp hiring is expected by the CFOs to grow only .8%.

Cautious about hiring, CFOs are much more optimistic about their earnings growth. With revenues expected to increase on average 5.7%, CFOs at the public firms  participating in the survey expect, on average, a 13.4% increase in earnings.

Compared to the September 2012 survey, the CFOs say they expect to spend more on captial purchases (4.8% increase vs. 3.7%); less on R&D; more on advertising and marketing; and the same on IT.

John Zappe is the editor of TLNT.com and a contributing editor of ERE.net. John was a newspaper reporter and editor until his geek gene lead him to launch his first website in 1994. He developed and managed online newspaper employment sites and sold advertising services to recruiters and employers. Before joining ERE Media in 2006, John was a senior consultant and analyst with Advanced Interactive Media and previously was Vice President of Digital Media for the Los Angeles Newspaper Group.

Besides writing for ERE, John consults with staffing firms and employment agencies, providing content and managing their social media programs. He also works with organizations and businesses to assist with audience development and marketing. In his spare time  he can be found hiking in the California mountains or competing in canine agility and obedience competitions.

You can contact him here.

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1 Comment on “Survey Confirms U.S. Shift Toward Temp, Contractors

  1. The market is quite shaky, as was evident from the recent survey I conducted on SoGoSurvey. But then again, this isn’t just a US phenomenon. The entire world is facing economic crisis!

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