STAFFING INDUSTRY REVENUE TO GROW 7% IN 2012
Staffing Industry Analysts lowered its 2011 and 2012 growth estimates for the U.S. staffing industry. According to the updated forecast, the U.S. staffing industry is expected to grow 10% in 2011 to reach $113.5 billion. This is a downgrade from the 12% projected in the forecast released in April. Industry revenue growth is expected to further slowdown in 2012 to 7% to reach $121.9 billion.
The slowdown is driven by less-than-stellar performance by the commercial staffing sector. “We are now in that stage of recovery in which commercial cools and professional takes over as the primary growth driver of the temporary staffing market,” said Senior Research Analyst Tony Gregoire, who produced the forecast.
“We assume that the economic recovery will remain uninspiring going into 2012, with GDP growth around 2%, rather than the 3% we expected in our April forecast.”
NELSON BEATS U.S. STAFFING INDUSTRY REVENUE GROWTH!!!
Nelson Staffing exceeded the industry averages the past two years (2010 and 2011).
In 2010, Nelson Family of Companies (NFC) was up 29.5% compared to industry average of 12% and in 2011 NFC is forecast to have a 16.9% year-over-year increase compared to the industry average of 10%.
NFC is projected to beat the 2012 7% forecast by Staffing Industry Analysts. The budget next year provides for 15.6% growth.
IT Staffing growth is projected to be 12% next year but Nelson Technology is budgeted for 34% growth year-over-year.
The table below provides more detail for your review!
Source: Staffing Industry Analysts
IS WORKFORCELOGIC 2011 VMS/MSP TOP PERFORMER?
Staffing Industry Analysts (SIA) could award WorkforceLogic 2011 TOP PERFORMER recognition in both VMS and MSP categories. This would follow last year’s recognition as 2010 TOP PERFORMER in these same two categories. The 2011 survey is based on 2,235 individual responses from 702 different staffing companies.
WorkforceLogic was one of only five U.S.-based VMS firms so recognized in this staffing company survey in 2010.
INDEPENDENT CONTRACTORS DISCOURAGED IN CALIFORNIA
The most recent Employment Taxes/West ASAP newsletter, New California Law Discourages Independent Contractors and Sole Proprietorships by Potentially Penalizing Businesses that Use Their Services, by GJ Stillson MacDonnell and Alison S. Hightower, is available on http://www.littler.com/ under the Press and Publications section. Please visit http://www.littler.com/ to review this ASAP and additional information about our publications and seminars.
Summary: The practical consequences of a new California law, effective January 1, 2012, could prove to discourage businesses from utilizing independent contractors based in California, while also discouraging service-providing sole proprietorships and other independent contractors from providing services to other businesses in California.
ANOTHER RECESSION IS ON THE WAY!!
The R.A. Cohen Consulting Newsletter dated October 26, 2011 reported… “In our last Newsletter, we mentioned that Staffing firms have started to plan and budget for 2012. We found at that time that many had fuzzy plans due to the many conflicting views on the economy in the short term. Most were not planning for a double-dip recession; however, that sentiment seems to have changed somewhat in a few short weeks.
While many firms believe that economic growth is decelerating and are, therefore, planning for slower growth, Staffing Industry Analysts (SIA) reported last week that the Economic Cycle Research Institute (ECRI) (a group SIA and others hold in high regard) reported that we are in the early stages of another recession. What is so significant about ECRI’s prediction is that they have never had a mis-call or false alarm on a recession call and they have predicted every recession since they started calling recessions. They believe the recession will be mild.
Our advice repeated from our last Newsletter is to approach 2012 with great caution and let the business push you and your staff. Be careful about adding overhead and, perhaps, slow down any bold growth plans you have… go slower and, perhaps, more conservatively than your instincts may indicate.”
EMPLOYMENT OUTLOOK
Comerica Economic Alert
According to Robert A. Dye, Chief Economist, “October payroll employment data showed a modest gain of 80,000 jobs for the month. The U.S. unemployment rate ticked down to 9.0 percent. Those two numbers, by themselves, are not particularly impressive. However, we can see some more encouraging signs deeper in the report. The preponderance of evidence suggests the likelihood that the U.S. economy will fall into recession before the end of 2012 is now lower. We were right at the tipping point through September. We now take a step back from the edge, to 40 percent. This is still elevated. We are not out of the woods yet.”
Deutsche Bank: Month-Over-Month Growth Outperforming the 20-Year Average
Just released November 4, 2011 from Paul Ginocchio of Deutsche Bank:
“Most important in our view, from this morning’s Employment Report, is that month-over-month temporary volumes, not seasonally adjusted, were +2.9% in October vs. a 20-year, non-recession average of +1.9%. This is the third month of significant out performance vs. the average after under-performance from April to July. There could be three reasons for this outperformance and we think each one is a contributing factor:
- US economy is in better shape than thought and slightly accelerating;
- The recent uncertainty in the global economy may be benefitting the temporary staffers as companies increase their flexibility; and,
- Structural shift to temporaries vs. permanent is leading to higher growth vs. history.
WORKFORCELOGIC VMS 7.1 RELEASE IN NOVEMBER
The WorkforceLogic 7.1 release promises a fresh, modern look and feel and a new semi-monthly timecard which is intuitive, visually appealing, and functionality rich. The 7.1 release will be available on November 21, 2011 and will feature:
- New Monthly Timecard and Pay/Bill Cycle
- New Web 2.0 User Interface and Design Style Guide
- New Worker Dashboard
WORKFORCELOGIC CLIENT LIST GOES TO 121
WorkforceLogic client growth indicated an increase from 111 clients in February to 121 in October! Thanks to Dale Yoger and Bruce Schumikowski for major contributions to new customer acquisitions this year.
LITTLER GLOBAL EMPLOYMENT LAW CONFERENCE
Littler Mendelson’s International Employment and Labor Law Practice Group hosted the 2011 Global Employer Institute in Washington D.C last week. This annual conference cannot be missed by anyone who needs to stay educated on pressing international employment and labor law issues. We sent five staff representatives from iWorkGlobal and WorkforceLogic to attend this invaluable conference. Jeff Phelps, COO at iWorkGlobal said that the session topics were phenomenal. More importantly, he realized that 85% of the issues faced by attendees at the conference around global payroll and compliance can be solved through partnering with iWorkGlobal.
WHY COMPANIES ARE NOT ADDING STAFF
As reported by ManpowerGroup in the Wall Street Journal October 24, 2011:
- 52% of U.S. companies report difficulty filling jobs
- 47% of employers blame prospects’ lack of “hard” job skills or technical skills
- 35% of companies cite candidates’ lack of experience
- 25% of companies blame lack of business knowledge or formal qualifications
- 28% of companies are increasing staff training and development
PERSONAL
- Niners on top of NFL West… as predicted! Now starting to “dream” of the playoffs!
- Saw “Margin Call” and was slightly disappointed. Slow in developing the plot, but very rich in thoughts.
- Buster Posey taking batting practice and ready for GIANTS Spring Training.
More later….Gary
