A look back at 2010: the factors that changed the workforce

Posted by: Joel Capperella

I can tell by all the “Top This” and “Top That” lists I’ve been reading over the last several days that it must be time to take a quick glance back and evaluate the year.

This is the second yearly wrap-up I’m writing for this blog, so it is also the first time that I can do it in context of what was hot a year ago. As I take a quick glance at the 2009 wrap-up, what strikes me is not necessarily that focus has shifted dramatically. Although admittedly, this year we didn’t really talk about green jobs at all, and the argument over whether or not the stimulus stimulated anything is nearly irrelevant (save the mid-term elections).

Instead, I see an overwhelming sense of maturation that seems to have resulted from yet another difficult year where workforce planning and management are concerned. Clearly, the processes that firms use to develop and execute their workforce strategies have grown up just a little bit more than usual. And while this maturation is clearly borne of necessity, the impact is likely to linger for years to come, if not indefinitely.

Here’s a quick look at the top factors that led to a dramatic change in the composition of the workforce in the United States.

Wage capitulation. By the end of the third quarter, an interesting trend in the wages of professional temporary IT workers began to emerge. Demand increased, but wages traveled in the other direction, the result of unemployment-wary pros willing to make some previously avoided concessions on their hourly rate. This not only underscores the lingering effects of the Great Recession, but also the reality that employers have consciously sorted out their most pressing needs and made tentative investments in talent where they need it most. Ultimately, this translated into higher mid-range experienced talent addressing maintenance-oriented projects that could no longer be put off until tomorrow. The impact to employers was greater flexibility to expand the ranks of these types of employees, and to employees, the need to more aggressively market their skills to better match the demands of a buyer’s market.

Tech cash hoarding. This wage capitulation and investment in maintenance-oriented projects was even more ironic given that tech firms were hoarding cash in an unprecedented manner. This also creates an environment in which employers will have better options if they have taken the time to plan out how they will build the workforce needed to handle all the work that will become available once they unleash the power of their cash reserves.

Record staffing growth. Temporary staff employment grew at record levels nearly every month in 2010.  Since September 2009, it has risen by 494,000 jobs. This reinforces the fact that the recession was the most severe economic event probably since the Great Depression. The impact was not only that a greater number of temporaries hit payrolls, but that U.S. firms clearly developed processes that more efficiently leverages those temporaries in areas that previously were unable to execute with the non-employee segment of their workforce.

The looming talent war. In what some are calling a mini tech bubble, the fast and furious flow of venture capital on both coasts, as well as the ongoing non-bloody battle between Facebook and Google, will ultimately have on singular effect: Eventually, talent of a certain technical type will be hard to find. Yet this nearly certain war for talent seems to currently have too much effect on the way technical talent is sourced.

While this sort of development is not necessarily new, what is different is the likelihood that the fulfillment of critical tech talent needs are likely to be filled in more creative ways, and most likely with more flexible staff that can adjust their schedules on demand in accordance with the most pressing needs of the employers. This could quite possibly usher in an age of free agency employment, the likes of which we have never seen before.

As seen in Yoh’s Annual Workforce Trends Study, all these factors have resulted in a dramatic change to the composition of most workforces. Firms surveyed reported an increased use in non-employees since September of 2008. Moreover, greater investments are being made to manage and engage this workforce. Perhaps the most telling element of the research, however, is that strong recovery is likely to have a generally positive impact to non-employee staff levels at most larger firms. The recession has forged new workforce planning strategies that will persist at least throughout this new decade.

Given these factors and the general course we took regarding employment strategies in 2010, this year feels very much like a transitional one. Recovery never found us, unemployment hasn’t moved in months, and temporary staff numbers keep climbing.

Certainly not a period at the end of any workforce sentence. Not even a semi colon. a comma at best.

Only history will be the final arbiter of whether or not 2010 ushered in a new phase in employment in the United States, on that became more heavily weighted to use flexible options and that drove greater collaboration between partners within the business (that is, HR, procurement and business leadership).

But history’s validation of the current age take time, of course. So until then, here is wishing our readers a joyful holiday season.