May 13, 2022

Early Trends in U.S. Contingent Labor Market for 2022 – Are we settling in to the new normal?

Steven Williams
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In real time, we see how the markets for contract labor are changing in over 500,000 locations around the globe. I wanted to share a few things of note from the Q1 2022 U.S. data on contingent work. All of these data are from our TDX Platform, which our customers use to improve their use of contract work and their labor competitiveness in these fast-changing markets. TDX’s tools are built on the world’s largest dataset of actual contract labor transactions—and growing every day.

A Few Findings From 2022 so Far

18% YOY Growth in U.S. Contingent Workforce

The number of U.S. contingent workers on assignment in March 2022 was 18% higher than the number of contingent workers on assignment in March 2021. Growth was especially strong for IT workers (43% growth YOY) and non-IT professional workers (17% YOY). Growth was weakest for Light Industrial workers (3% YOY) over that same March 2021 to March 2022 time period (see Figure 1).

Figure 1: Year-on-Year % Growth in Active Contingent Workforce  (Overall US, March 2021 to March 2022)

 

Growth Plateauing?

Brightfield’s Active Contingent Workforce Index™ tracks the number of contingent workers on assignment in the U.S. at any given time. The Index has been increasing steadily from its pandemic-driven low point of 91 points in mid-2020 until a high of 153 in late 2021. Since November 2021, however, the index value has hovered around 150 to 153 points (see Figure 2). An index reading of 150 means there is 50% more contingent workers on assignment than pre-pandemic baseline levels. This 50% growth is, of course, a staggering increase in the use of this segment of the workforce. But it remains to be seen if companies’ appetite for contingent workers continues to grow or will maintain at this elevated level.

Figure 2. Active Contingent Workforce Index  (Overall US by Month)

 

Average Time to Find a Worker Continues to Increase—Now at Nine Weeks

In follow-up to our December 2021 Extended Workforce Intelligence Report, we looked again at average cycle times to find and onboard a contingent worker. Cycle times continued to slow in both Q4 2021 and Q1 2022. In the first quarter of 2022, it took 26 business days to find a worker and then another 20 business days to onboard the worker, on average (see Figure 3). Typical onboarding activities include background checks and provisioning a worker’s access to systems and facilities. Our customers routinely use TDX to diagnose and speed up their cycle times to find contingent workers.

Figure 3. Average Contingent Sourcing Process Times in Business Days  (Overall US by Quarter)

 

Companies Churned Software Developers at the End of 2021

As faithful readers of our Extended Workforce Intelligence Reports know, companies have been adding more and more contingent software developers to their workforces in the U.S. since the pandemic started. Since early 2020, companies have roughly doubled the number of software developers on contingent assignments in the U.S. In the first quarter of 2022, we saw a break in this growth. Companies closed out a large number of software developer assignments in December 2021 and did not restart them in January 2022. This caused a 13-point January dip in Brightfield’s Active Contingent Workforce Index for Software Developer Roles. The index fell from 202 in December 2021 to 189 in January 2022 (see Figure 4). In Q1, we saw companies release a high number of requisitions for new contingent IT assignments. Another of Brightfield’s main indices—the Contingent Worker Demand Index™—tracks new requisitions; monthly requests for new IT assignments in Q1 2022 were 40% to 60% higher than pre-pandemic monthly averages (see Figure 5). As companies’ IT requisitions are filled, we are starting to see the number of software developers on assignment rebounding in February and March.

Figure 4. Active Contingent Workforce Index for Software Developer Roles (Overall US by Month)

 

Figure 5. Contingent IT Worker Demand Index  (Overall US by Month)

 

See how we can help your company be more competitive in these fast-changing markets for contract labor - request a demo now!

 

Thank you to my colleagues Nicolas Lee, Carissa Shafto, Josh Mader, Alex Reynolds, and Javed Wiggins for their help with the data analysis underpinning this article.

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