September 30, 2021

Demand for U.S. Contingent Workers is Cooling—Except for These Two Roles

Steven Williams
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We just released our latest Brightfield Extended Workforce Intelligence Report. This edition updates our key U.S. Brightfield Indices and examines recent trends in companies’ use of contingent labor.

Here are three of the Report’s key findings:

1.  Overall demand for new U.S. contingent assignments is slowing
2.  Companies are struggling to fill their employee openings, and are bringing on contingent staff to help fill those employee openings
3.  IT continues to be on a tear for contingent work (and bill rates)

Overall demand for new contingent assignments is slowing

Each week we track the shifting demand for additional contract work, as companies release requests for new contingent assignments. Over the past three months, the volume of requests for new U.S. contingent assignments has been 8-11% smaller than pre-pandemic levels. This lower monthly demand is dampening the strong growth we have seen in the overall numbers of contingent workers on assignment. The six-month 36% growth rate of May 2020 to November 2020 has dropped to 11% for January 2021 to July 2021, in our U.S. Active Contingent Workforce Index.

Companies are struggling to fill their employee openings and are bringing on contingent staff to help fill those employee openings

Companies appear to be focusing on filling their many open permanent employee positions rather than continuing to add contingent positions at the same pace. The Labor Department estimates there were 10.9 million employee openings in the U.S. in July (the most recent data available). In addition to adding new employee openings as the economy grows, companies are desperately trying to fill openings from high voluntary resignation rates due to the “Great Resignation,” as it’s called in news reports. We see evidence in our data that companies are using contingent workers to help tackle the challenge of filling employee positions. Companies have been bringing on record numbers of contingent recruiters and HR coordinators (who are often involved in recruiting processes). The number of contingent recruiters on assignment is now more than double the pre-pandemic level, and the number of HR coordinators is more than quadruple the pre-pandemic level.

IT continues to be on a tear for contingent work (and bill rates)

The number of contingent software developers on assignment has increased to nearly double the pre-pandemic levels. As faithful readers know, one of the biggest trends over the course of the pandemic has been companies’ expanding use of contingent IT workers. This has been shifting the composition of the overall contingent workforce. IT workers made up 24% of the total active U.S. contingent workforce in January 2021, and this proportion has climbed up to 28% in July. Most of the new contingent IT assignments added over the past year have not been in typical IT hubs. The largest numbers of IT assignments have been added in metro cities such as Greenville (South Carolina), Minneapolis, and Philadelphia. At the same time, the increased demand (especially in the largest U.S. cities) is pushing up bill rates for specific expert software development skills. Hourly bill rates for expert-level Oracle Developers in large U.S. cities is projected to hit $145 an hour by the end of this month. Our customers actively use TDX to identify where to find great contingent IT workers faster and at lower bill rates.

What else would you like to hear about?

TDX is built on the world’s largest and deepest dataset on contract labor. Is there anything you’d like to hear about? Please contact me at swilliams@brightfield.com to let me know.

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