These are good times for the temporary staffing industry.
As the American Staffing Association chart below shows, the industry has been booming since the steep declines caused by the Great Recession.
2015 was another record setting year and pretty much everyone in the staffing industry is predicting good times ahead.
Many in the industry also feel the threat posed by online talent marketplaces, freelancer management systems and the direct sourcing of independent contractors in general is minor or simply doesn't exist.
An interesting example of this comes from a quote from Peter Dameris, CEO of large staffing firm On Assignment. In the Staffing Industry Review article Human Cloud, IT Staffing Firms Eye Each Other - Warily he's quoted as saying:
“Almost all large, sophisticated corporations are flat-out refusing to use non-W2 temporary labor. The more sophisticated the company, the more likely legal, HR, and even procurement have weighed in and said ‘The risks are greater than the reward.’ Customers are continuing to embrace the realization that the best way to ‘fractionalize,’ or share, human capital and avoid the legal risks of misclassifying employees is by working with a staffing firm.”
This is clearly an attempt at spin by Dameris.
The data overwhelmingly shows the use of non-W2 labor is growing at a much greater pace than overall employment or the growth in temp labor.
As far as sophisticated corporations refusing to use non-W2 labor, we know from both our research and personal experience this simply isn't true.
But it reminds me of how Kodak viewed digital photography in the mid-to-late 1990s.
For those not familiar with Kodak, it was the world's largest camera and film company until it failed to adapt to the shift to digital photography in the early 2000s - despite having invented key digital photography technologies.
In the mid 1990's Kodak was listed among the top 5 most admired corporations by Fortune, employed over 100,000, had about $16 billion in revenues and earned over $1 billion in profits.
Things started going downhill quickly for Kodak in the late 1990's, they ceased being a effective competitor in the photography market by the mid-2000's and declared bankruptcy in 2012.
A key reason Kodak failed is their financial results remained strong even as digital photography rapidly gained market share in the 1990's. Because of this, there was little pressure to react to the shift to digital photography. By the time they finally reacted, it was too late.
So as the good times roll for the staffing industry, I have to wonder if Kodak's fate awaits some or many staffing firms.