REPORT # 14 | April 2013

TRENDLINE
Contingent Worker Forecast and Supply Report

Inside this Issue Note from the Editor DCR National Temp Wage Index Elderly Care: A Growing Need for the Nation 1 2 3

Note from the Editor

As we jump into spring and the second quarter of the year, TrendLine this month once again provides you with key insights into the temporary staffing industry. With new groundbreaking research and in-depth analysis of information, we provide you with a pulse of the market. Our articles this month uncover trends in the industry and supply you with hard, actionable information. We start this edition by forecasting national temporary wages to give you our DCR National Temp Wage Index. We also delve deeper into the numbers to examine the correlation of temporary employment with unemployment rates. Keep an eye out for the special case study that highlights how small businesses are succeeding without a traditional permanent workforce. With the Affordable Care Act set to go into effect in 2014, many employers are starting to take a closer look at their healthcare programs, benefits, and workforce composition. With that in mind, we focused our analysis this month on nationwide population trends and the impact they have on companies. Our first article in this genre concentrates on the growing need for elderly care and the effect it has on employers. Be sure to look for our detailed analysis on the trends in eldercare. We follow this with a short piece on the management and support of cancer survivors in the workplace. The next article examines the usage of web searches and social media through keywords. We conduct thorough research on tags, keywords and keyword phrases related to workforce and contingent staff management to predict trends in 2013 and 2014. Our final piece this month examines the impact that the surge of contingent workers has on long-term economic growth. We pay particular attention to the paradigm shift in workforce models and on what is becoming the new normal.

An Insight on Workforce Keywords via Web Analytics & 8 Social Media Managing and Supporting Cancer 12 Survivors at the Workplace Temp Growth vs. Long-Term Economy Growth: Is it in Sync? 13

~Katherine Stone, law professor at University of California, Los Angeles, and labor specialist.

Theres been a really fundamental shift in the nature of employment its a sea change. Whether youre talking about the expanded use of short-term employees, temporary workers, project workers, contractors or on-call workers, the use of workers who dont have regular jobs has increased a lot.

Ammu Warrier

Ammu Warrier, President

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DCR National Temp Wage Index

From August 2012 to January 2013, actual temp wages continued to increase. We forecast that this upward trend will continue until April, when we might see a drop in national temp wages. This increase in the forecasted wage rate seems to be influenced by the 1.91% rise in the penetration rate of temporary workers in February (compared with the rate in January of 1.90%). The United States temporary help services industry added 16,000 jobs in February 2013 for a total of almost 2.9 million jobs. Arrays
Temporary Employment vs. National Unemployment Rate Temporary Employment vs. High School Unemployment Rate Temporary Employment vs. Bachelor Degree Unemployment Rate Correlation

Correlation
-0.71 -0.71 -0.69

Case Study: Business Gain Without Full-Time Employees

Xan Hood, a startup entrepreneur who founded the clothing company Buffalo Jackson, saves $270k without any permanent employees in his organization. This is a perfect example of how small businesses can be successful in the use of temporary workers. Relying on freelancers saves Mr. Hood time and money in various ways. For example, utilizing temporary workers means that there is less government paperwork. This is a huge benefit, especially for a startup that often is short of funding. Some business owners are starting to use online platforms, like Buffalo Jackson did with Elance, where they have the ability to find freelancers who submit bids for jobs. Alternatively, many other organizations source their temporary workforce through staffing companies who provide the benefit of professional handling of requirements, especially candidate screening, Zonboarding and payroll administration.

Temporary Employment has always been negatively correlated with the National Unemployment Rate, High School Unemployment Rate, and Bachelor Degree Unemployment Rate. This is a clear indication of the significant tie of temporary job creation with unemployment figures.
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Elderly Care: A Growing Need for the Nation

The United States is getting older. The combined factors of a growing elderly population, a lower projected level of birth and net international migration are causes for concern. This trend is not only alarming for the nation, but also becomes a matter of significance to employers who continue losing worker productivity due to time taken off to care for aging parents. There are currently nearly 10 million adults responsible for the care of an aging parent. This aging group has increased significantly over the past 15 years, and as per our calculation and most recent data available, currently 13.28% of the total United States population is above 65 years of age. Out of the total social security paid benefits of 44.79 million above 62 years of age, 22.04 million belongs to the age group of 70-80, 17.33 million are in the age range of 62-69 and 5.43 million are more than 85 years of age. Similarly, with social security payouts, the age group of 62-70 accounts for $13.51 billion, the age group of 70-80 accounts for $14.64 billion, and the age group over 80 accounts for $9.52 billion. This data makes it obvious that the maximum number of aging parents requiring care is in the age group of 70 to 80. Gail Hunt, president and CEO of the National Alliance for Caregiving, says that companies are incurring a cost of up to $34 billion a year due to caregiver absenteeism and other issues directly affecting worker productivity.

Breaking Down Elderly Caregiving

To further investigate this issue, we attempted to analyze the aging population and caregiving population by various segments. After some careful examination on different population breakups, we discovered some interesting facts: 1. Females contribute more time than men to elderly care

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Elderly Care: A Growing Need for the Nation

2. Full-time working employees contribute more time to elderly care than part-time employees

3. The age group contributing most to elderly care is that of 45 to 54 years

4. White and Black women scored higher than Hispanic and Latino women in percentage of caregiving

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Elderly Care: A Growing Need for the Nation

5. Those workers with higher qualifications contribute more to elderly carecentage of caregiving

6. States with the highest population of 65+ age of male employees

7. States with the highest population of 65+ age of female employees

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Elderly Care: A Growing Need for the Nation

8. Female aged population by state

(Source: Aging Integrated Database)

9. Male aged population by state

(Source: Aging Integrated Database)

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Elderly Care: A Growing Need for the Nation

From the Baby Boomers Perspective
The oldest among the Baby Boomers entered into retirement in 2011, and the youngest will retire in 2029. The current population of the Baby Boomer generation is 76.4 million, which is approximately 25% of the total U.S. population. Thus, by 2030 America will have a large population of elderly people ranging from 65 to 84 Years. This huge population will definitely require increased attention to elderly care. As per a survey by NHANES (National Health and Nutrition Examination Survey), only 13.2% of boomers rated their own health as excellent, compared with 32% of those in older generations. Nearly 7% of boomers were using a walking assist device, 13.5% had a functional limitation of some kind and 13.8% were limited at work. For the previous generation, those figures were only 3.3%, 8.8% and 10.1% respectively. As such, this large population who compared to their predecessors have lower overall health (including increased rates of obesity, hypertension, diabetes, and hypercholesterolemia) will most likely require increased intensive elderly care, resulting in higher health care costs and time.

From the Employers Perspective

As per a 2011 survey of employers by the Society for Human Resource Management (SHRM), the percentage of employers offering eldercare programs dropped from 22% in 2007 to 9% in 2011. Similarly, access to eldercare back-up services also reduced from 4% to 2%. Fewer benefits were offered to employee caregivers, with most leave benefits consisting of unpaid family leave and FMLA leave. Meanwhile, many employees are concerned about revealing family issues in the workplace, and claimed to not need the services that were offered. However, the few employers who have implemented some form of an eldercare program n their organization reported significant direct benefits including: Reduction in absenteeism Retention of employees Inclusive culture with the sense of family being part of the company Work-life balance Improved productivity Reduction of the stress of caregiving

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An Insight on Workforce Keywords via Web Analytics & Social Media

Top 10 Likes/Comments for Workforce Tag on Facebook (as on 3/6/2013)

The above graph shows those entities with the word workforce tagged who have received the most likes and comments over the past year. Traditionally, changes in employment metrics and sentiment are reflected in social media. The growth for some, such as the Workforce Fairness Institute and the Singapore Workforce Development Agency, is substantial which indicates that interest in workforce has increased, especially as unemployment decreased after August of 2012.
USA Jobs: Total Likes by Keyword Phrases

With the decline in the unemployment rate over the last few months and the improvement in the job market, workforce companies are again catching the attention of companies as seen in social media.
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An Insight on Workforce Keywords via Web Analytics & Social Media

Google Search on Keywords Hiring & Contingent from March 2012-March 2013
Note: The number 100 represents the peak search volume

(Source: Google Trends)

hiring

contingent

Regional Interest for Keyword Hiring

California, Nevada, Arizona, Texas, Mississippi, Georgia, Florida, Illinois, Michigan, North Carolina are among the top states in web search frequency.
(Source: Google Trends)

Regional Interest for Keyword Contingent

Nevada, Illinois, Idaho, Missouri, Virginia, Maryland, New Hemisphere, and Ohio are the top states in web search frequency.

(Source: Google Trends)

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An Insight on Workforce Keywords via Web Analytics & Social Media

Web Search Interest: Vendor Management System & Managed Service Provider (United States, 2004 present)

(Source: Google Trends)

hiring

contingent

In the contingent workforce industry, the phrases Vendor Management System and Managed Service Provider often go hand-in-hand, as companies seek all-around solutions for their talent management needs. This can be seen in the above graph, where web search interest in both keyword phrases often has a parallel trend, though Managed Service Provider on an average has a higher level of interest. With the increasing number of temporary jobs in the workforce today, it is useful to keep an eye on the level of interest companies have in relevant third-party solutions and services.

Managed Service Provider

The keyword phrase Managed Service Provider has a higher search volume index in the USA and the UK, as compared to the phrase Vendor Management System. Related search terms similar to Managed Services in IT, Software, Model and Outsourcing have a higher search volume index in India, the UK, and South Africa. Whereas, the US, Canada and Australia are at a lower search index value. Top news headlines reflected in the search are Market Watch, Fox Business and Reuters. Based upon historical trends and predictive analysis, Managed Service Provider is expected to be above a 40-volume search index during most of the months in 2013, which will decrease at the end of the year, but bounce back in 2014. Note: Search volume index shows interest of people accessing the web. When it is high, people are increasingly searching for that particular entity. A low search volume index indicates that users are generally reducing their search for that entity.

(Source: Google Trends)

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An Insight on Workforce Keywords via Web Analytics & Social Media

Vendor Management System

New York and California are the two states with the highest search volume index for the keyword phrase Vendor Management System in the USA. Worldwide, India and the United States are the only countries that have a search index in vendor management software, system and process. Based upon a trend forecast and predictive analysis, Vendor Management System is expected to remain below its current level of the volume search index during the remainder of the year, but it might show a steep rise during the first quarter of next year. This means that that people will enquire and search for Vendor Management System online more in first quarter of 2014, indicating a possible steep rise for the keyword phrase next year. Trend Line: Contingent Worker Forecast and Supply Report. DCR. All Rights Reserved - 11

(Source: Google Trends)

Managing and Supporting Cancer Survivors at the Workplace

Cancer is no longer the taboo topic that it was in the 1950s and 1960s, when few talked about the disease. According to 2012 figures from the American Cancer Society, this illness costs employers an estimated $264 billion a year in medical care and lost productivity. The National Business Group on Health (NBGH) asserts that cancer patients account for 10% of employers medical claim costs along with a large share of long-term and short-term disability claims, yet the individuals filing the claims only represent 1.6% of the privately insured population. Rob Finch, vice-president of the NBGH, believes that employers must cultivate a comprehensive approach to fighting cancer through general medical benefits, behavioral health programs and pharmacy recommendations. These programs, which should include employee assistance benefits, are particularly important since 90% of working-age cancer survivors return to their jobs.

Cancer has grown in importance to employers as the frequency of diagnosis increased. ~Helen Darling, president of NBGH
The Center for Disease Control and Prevention predicts that 1.7 million people will be diagnosed with cancer in the United States this year. Almost half of this group will range in age from 19 to 64, which is the bulk age of the national workforce. While many companies have taken active steps to deal with issues regarding discrimination, there is still a lot of progress that can be made to manage and support cancer survivors.

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Temp Growth vs. Long-Term Economy Growth: Is it in Sync?

The temporary worker population has been growing at a very rapid rate, showing an upward movement over the past few years. Engaging this type of worker has become an increasingly viable choice for employers as they can recruit workers as required and minimize costs associated with workforce benefits. However, how does this trend affect the macro environment in terms of long-term economic growth, as we drift away from traditional permanent jobs? In this article, we examine the historic shift away from the kind of long-term employment that fueled the rise of the American middle class. A stable and reliable job usually gives security and strength to employees, enabling the middle-class population to remain a part of the long-term economic state, which in turn reinforces the economy due to the consistent source of investment. But this model is changing with the rise of the temp economy. Job search company CareerBuilder reported recently that 40% of employees surveyed plan to hire temporary workers in 2013 in several job categories. Of that number, 42% of those employers say they hope to make some of these workers permanent, full-time employees. Another study by consulting firm Challenger Gray & Christmas found that U.S.-based employers in February planned to cut 55,356 jobs (up 37% from January). Of these 21,000 are expected from the financial services industry and a large portion from both retail and aerospace and defense. Less traditional positions and more contingent workers can lead to problems for freelance workers and society temporary 1099 jobs often means lower wages (as compared to permanent positions) and no health care or retirement benefits. This leads to a reduction in purchasing power and limits on personal consumption, thus slowing economic growth.

[Temp work arrangements] can be useful to both employers and employees, but as we know it has been linked to exploitation. The fact that temporary workers make less and have no benefits is really problematic ~Erin Hatton, an author and assistant professor of sociology at the State University of New York, Buffalo Uncertainty in economic growth gives rise to the contingent workforce, and an increasing contingent workforce without a consistent income does not contribute to economic growth. Also associated with the surge of temporary workers is a decline in union membership and collective bargaining agreement coverage. Temp vs. Full-Time Employment Indexes
As the chart shows, the temp help employment almost overlaps with the permanent employment index. This is a clear reflection of employer preferences and that the contingent workforce model is becoming the new normal.

However, it seems that the model has shifted with employers clearly indicating a preference for flexible employment practices allowing them to adjust staffing levels as competitive forces change. Companies are focusing on maximized corporate flexibility in managing workers in a fluid workplace as opposed to providing employee stability and financial security. CEOs claim that this new model allows for elasticity in increasing the bottom line and drives greater innovation. The perception has shifted. You see that with younger people who are entering the workforce. Theres a change in employee expectations of what the labor market has to offer them. ~Katherine Stone, law professor at the University of California, Los Angeles, and labor specialist. Trend Line: Contingent Worker Forecast and Supply Report. DCR. All Rights Reserved - 13

Methodology
The DCR Wage Index is developed to assess the relative movements of temporary wage rates in the U.S. economy. The wage rates for temporary workers or contingent workforce are based on payments made by staffing firms to these workers based upon hours worked. Data collected from sources such as Bureau of Labor Standards (BLS) and other government sites as well as an internal pool of staffing companies and consultants, is aggregated and classified based on regions and skill categories, to arrive at an aggregate index. The baseline for the index is set at 100 for January 2007. Index value for a particular month indicates relative wages with the said baseline and is representative in terms of direction and scale of change. Five years of data has been included to observe seasonal patterns and distinguish seasonality from long-term wage movements. The data and the model has been further refined over last six months. DCR Wage Index combines the exhaustive data from BLS with practical and more recent developments and data from on-field consultants and clients, to provide timely near-term indications of trends and consistent long-term actionable and objective information.

Source Data
DCR Work Index uses multiple economic variables to ensure the robustness of its forecasts and cross-validation of trends. Key data sources and parameters of interest included and influencing the index are: Unemployment data Gross Domestic Product Prime rate of interest New and seasonal Job openings Non Form employment Job Opening All Export All Import Average Hourly Earnings of All Employees Total Private Aggregate consultant data on job market parameters

References:
http://money.cnn.com/2013/02/26/smallbusiness/temp-workers/index.html http://pagedata.appdata.com/pages/search/workforce http://www.google.com/trends/explore#q=workforce http://www.bls.gov/news.release/atus.t15.htm http://www.agidnet.org/DataGlance/Pop_State/ http://www.who.int/ageing/en/ http://www.ssa.gov/oact/progdata/benefits/ra_mbc201212.html http://www.challengergray.com/press/PressRelease.aspx?PressUid=260 https://www.census.gov/newsroom/releases/archives/population/cb12-243.html http://www.staffingindustry.com/site/Research-Publications/Daily-News/US-adds-16-000-temp-jobs-in-February-24945

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About DCR Workforce

DCR Workforce is an award winning, best-in-class service provider for contingent workforce and services procurement management. Our proprietary SaaS platform (SMART TRACK) assists in providing customizable VMS and MSP Solutions to manage, procure and analyze your talent with complete transparency, real-time control, high performance and decision-enabling business intelligence. DCR Workforce serves global clientele including several Fortune 1000 companies. Customers realize greater efficiencies; spend control, improved workforce quality and 100% compliance with our services. For more information about DCR Workforce and its Forecasting Toolkit (Rate, Demand, Supply and Intelligence) including Best Practice Portal, visit dcrworkforce.com

For more information call +1-888-DCR-4VMS or visit www.dcrworkforce.com Public Relations: Debra Bergevine 508-380-4039 7815 NW Beacon Square Blvd. #224 Boca Raton, FL 33487 debra.bergevine@dcrworkforce.com | sales@dcrworkforce.com | marketing@dcrworkforce.com www.dcrworkforce.com | blog.dcrworkforce.com

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