October 14, 2022

What a Strange Trip It’s Been: Two and a Half Years of Contract Labor Market Turbulence

Steven Williams & Nicolas Lee
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Everyone involved in U.S. contingent labor markets has been living on a roller coaster since 2020. We at Brightfield recently ran analyses with our TDX dataset* to pull out the major trends and the signals of where these important markets are headed next. 

One thing we track very closely is the number of contingent workers on assignment at any particular time. Figure 1 shows how that number changed from prior to the pandemic to today—the aforementioned roller coaster. Specifically, we calculated the average monthly number of contingent workers on assignment pre-pandemic (during the second half of 2019) and then looked at how that number changed month to month since then. A bar below the horizontal line means fewer workers were on assignment, and a bar above means more workers were on assignment.


Figure 1. Monthly U.S. Active Contingent Workforce—Percentage Difference from Pre-Pandemic Average

Figure 1 - Monthly US Active Contingent Workforce Percentage

As you can see, and as you have felt, this has been a turbulent time for contingent labor markets. Let’s take a closer look at the ups and downs in some depth.

The Lock-Down Dip

In early 2020, and as COVID initially swept across the U.S., demand for contingent workers fell off a cliff (see Figure 2). Average monthly new request volumes were 1/3 lower than normal. We vividly remember the week in mid-March 2020 when volumes started evaporating. The declines were across all industries and job types.

Assignments already underway stopped early at twice their normal rate in this period. For assignments that ended before their planned end date during the first six months of 2020, only 10% were due to workers stepping away from their assignments; a full 90% were the result of companies proactively halting assignments. It’s worth noting that while total contingent headcount fell by 15% in the depths of this dip, many companies were simultaneously working very hard to keep this part of their workforce on the job and safe and supported.


Figure 2. Monthly U.S. Active Contingent Workforce—Percentage Difference from Pre-Pandemic Average (Focusing on January-June 2020)

Figure 2. Monthly U.S. Active Contingent Workforce—Percentage Difference


Ramp Up

For the next 21 months, companies then went on a tear adding U.S.-based contingent workers. We highlight this Ramp Up period, shaded in green, in Figure 3. Initial (and then sustained) demand in this period was for pandemic supply chain roles--workers to move materials around and to work on manufacturing lines; the numbers of these workers increased by 43%. This was soon followed by a ramp up in customer-support type roles, to nearly double pre-pandemic averages. Companies wanting to accelerate digital projects added sizable numbers of contingent IT assignments as well. As a for-instance, the number of contingent software developers on assignment doubled across the period. Further, of course, all this was happening with the background of a global health crisis. Demand for contingent healthcare workers spiked accordingly, with monthly waves of requests for new contingent nursing assignments sometimes at 1.5 to 2.5 times the normal pre-pandemic volume.

At the peak of the ramp in late 2021 and early 2022, there were about 15% more contingent workers on assignment in the U.S. than pre-pandemic. This ramp was much steeper than that of overall U.S. employment. Total employment in the U.S. didn’t recover to its pre-pandemic level until March of 2022.


Figure 3. Monthly U.S. Active Contingent Workforce—Percentage Difference from Pre-Pandemic Average (Focusing on July 2020-March 2022)

Figure 3. Monthly U.S. Active Contingent Workforce—Percentage Difference


Recent Deceleration

More recently we are seeing the tide going back out—companies in aggregate paring back their use of U.S. contingent workers. Since April of this year, new request volumes are down 40% for IT and 23% for non-IT assignments. We are seeing big declines in software developer and call center-type roles as well, and manufacturing assignments are down by 20% (see Figure 4).


Figure 4. Monthly U.S. Active Contingent Workforce—Percentage Difference from Pre-Pandemic Average (Focusing on April 2022-July 2022)

Figure 4. Monthly U.S. Active Contingent Workforce—Percentage Difference


The Power of Up-to-Date Market Intelligence

Companies that have real-time contract labor market intelligence at their fingertips have ridden the roller coaster of the last two and a half years well—knowing when and where to take advantage of local market changes. Others, without credible market intelligence, have ended up abandoning their out-of-date rate cards, infuriating their line manager partners with extended times to fill, and ballooning their costs.


If you would like to have real-time market intelligence at your fingertips, learn more about TDX by contacting us at www.brightfield.com/contact.


*Brightfield’s TDX platform combines data on contract labor requests, assignments, etc., and is growing every week. We now have transaction-level data from over 500 companies, which gives our customers unparalleled insight into how contract labor markets (especially prices and worker availability) are changing over time.


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