2021 was an incredibly turbulent year in U.S. labor markets, including the markets for non-employee (or contract) labor. Companies increasingly relied on non-employee contract labor for all facets of their operations and growth.
Brightfield receives data on a daily basis from companies (including roughly half the Fortune 100) on their actual contract labor transactions—what skills they are requesting and in which locations, how long it takes to find workers, how much they paid, was the assignment successful, etc. This is quite different from other data sources that rely on worker surveys, screen scraping, and supplier-reported rack rates.
Key 2021 Trends
We have been reading the tape from 2021 and want to share some of the highlights:
1. Companies have grown their contingent workforces by over 50% since pre-pandemic
2. Average U.S. bill rates climbed by 2-8%, depending on job category, in 2021
3. Companies have a voracious appetite for contingent IT workers
4. That appetite and changing worker preferences is scrambling local markets for IT workers: work locations (new hubs emerging), time to secure a worker (slowing by six weeks), and competitive bill rates (changing dramatically by location)
All the details on these findings (and other additional findings) are in our most recent Extended Workforce Intelligence Report.
Companies’ Increasing Appetite for Contingent Workers
The global Covid pandemic has been driving substantial changes in company, workforce supplier, and worker behavior. The U.S. contingent workforce has grown to be 56% larger than it was before the pandemic (see Figure 1).
Over the course of 2021, companies struggled to fill openings for both employee positions and contingent openings. This increased the time to find and start contingent workers by weeks (see Figure 2 for IT contingent workers, as an example) and put upward pressure on contingent worker bill rates (see Figure 3 for rates by job category).
Scrambling Local Labor Markets
The changes in local contingent labor markets were especially pronounced in 2021. Companies became much more open to contingent workers in new locations, as work-from-anywhere became the norm, and companies sought to tap into new pools of high-quality workers at reasonable bill rates, especially for IT assignments. At the same time, IT workers have been moving away from traditional IT hubs. This has led to increased IT assignments at secondary IT hubs (see Figure 4) and wide changes in competitive bill rates for specific skills sets (see Figure 5 for an example). Of course, there were also dramatic changes in local labor markets for assignments where the worker could not be working from home, for example, in warehouse, manufacturing, and nursing assignments. We detail some of those changes in our reports.
Many Companies Now at a Competitive Disadvantage
Companies without up-to-date data on local contingent labor markets for specific skillsets are finding themselves at a competitive disadvantage: paying too much or too little, not filling critical openings as quickly as competitors, and being stuck with poor assignment success rates. TDX tools put all this market intelligence at the fingertips of participants in the contract labor supply chain. For example, TDX’s Rate Intelligence functionality (see Figure 6) allows users to:
· Look at current bill rates, pay rates, and supplier markets by Role, Skillset, Location, Experience Level, Contract Length, etc.
· Understand how changes to the bill rate may (or may not) speed up time to fill an opening
· See what your company has been paying for this role over time relative to market benchmarks
· See how long it will take to fill a specific assignment and recommendations on alternative locations
Get the full A Year of Extreme Volatility in U.S. Contingent Labor Markets report on our website, and for a real-time look at TDX's Rate Intelligence request a demo now!