Hiring explodes in part-time and contract work

With companies hiring more temporary workers, Jody Godsey couldn’t find a full-time job after being laid off, prompting her to start her own business, UR 3rd Hand.

Jody A. Godsey found herself among the thousands of unemployed in the Richmond area a year ago in June.

“I loved working there and planned to retire from there,” the Richmond resident said about her job as an assistant to the general manager of a country club.

She had to adjust to a changing workforce, as companies increasingly hire more part-time and independent contract workers and resort to high-tech ways of recruiting workers.

“With my unemployment ending and no job in sight, I started by own business, UR 3rd Hand,” a virtual administrative business, Godsey said.

“As with any new business, it is slow to get started and make an income. I am still looking for a permanent job, but this helps me make ends meet until hopefully a job offer comes along.”

While the U.S. economy stumbles along, hiring is igniting in one segment of the labor market — temporary work.

The number of temporary workers nationwide has risen more than 50 percent to 2.7 million — the most on record — since the recession ended in June 2009, the Labor Department reported.

The trend is likely to intensify, workplace experts say.

The rise in the number of temporary workers is being driven by two factors — uncertainty about the economy, and companies cutting employee hours because of costs associated with the Affordable Care Act, workforce experts say.

Whether hiring people part time or on a contract basis, such companies as Capital One Financial Corp., Owens & Minor, Wells Fargo and SunTrust Banks are increasingly relying on temporary workers and dipping into a large pool of talent in the Richmond area.

Hiring in this segment of the workforce has accelerated even though the Virginia economy has 19,800 fewer jobs than it did at its peak employment in April 2008.

Nationwide, 8.7 million jobs disappeared from payrolls during the recession, and the economy is still 2 million jobs shy of pre-recession employment levels, according to Challenger, Gray & Christmas, a global outplacement and consulting firm.

“The depth of the recession and the slow crawl back to a full recovery forced many Americans to become more flexible and more creative when it comes to finding a job and earning income,” said John A. Challenger, CEO of Challenger, Gray & Christmas.

“Employers also had to become more flexible and creative in order to simply stay afloat during the downturn,” he said.

An estimated 1 in 3 Americans are considered contingent workers, meaning they work for organizations on a nonpermanent basis as freelancers, independent professionals, contractors, consultants and temporary workers, according to Challenger, Gray & Christmas.

“By 2020, some forecasts have the portion of contingent workers rising to 50 percent of the American labor force.”

As corporate America’s use of these workers has evolved, so has the definition of contingent or temporary worker, according to the outplacement firm. They are no longer replacement workers.

They tend to be skilled, tech-savvy experts. The use of these workers has expanded into professional services such as lawyers, doctors and information technology specialists.

The number of people working part time usually rises during a recession because there are fewer job opportunities for full-time employment, said Christine Chmura, president and chief economist of Chmura Economics & Analytics in Richmond.

“Although the recession ended a few years ago, the job market remains weak,” Chmura said. “Sluggish economic growth is part of the reason for the continued high levels of part-time workers.”

Another likely contributor to the high level of part-time workers is the Affordable Care Act, Chmura said.

“Because there is a 30-hour cutoff for mandatory health benefits, some employers are reducing the hours of some full-time workers so they don’t have to incur additional health care costs,” she said.

However, the recent delay of the employer mandate to 2015 could slow the increase in the number of part-time workers over the next year, she said.

Hazel Mobley, a caretaker for seniors who lives in the Fan District, said her hours were cut in March from 40 to 28 because of “Obamacare.”

“I just want a job where I can feed my family,” she said.

Her goal is to make $1,200 a month, Mobley said. She makes $800 a month now.

“Obamacare has been a game changer,” said Mark Collins, president and CEO of American Dedicated Logistics, a contract management and logistics support company based in Richmond.

“The thought of having to pay health insurance for delivery drivers has sent shockwaves throughout the supply industry,” Collins said.

“Whether delivering auto parts, flowers or even pizza, many companies that previously would have shunned the idea of contractors are now opening up to the idea.”

By switching to independent contractors, companies can offer contractors more than 40 hours a week, reduce their liability and not worry about overtime, vacation or health care, Collins said.

Using contractors does not work with every job, Collins said. “But where a job is not the essential part of your business, and where constant supervision is not required, switching to independents is the way to go.”

Sue Durnwirth, CEO of Bench Inc., a staffing company in Chesterfield County, said companies continue to be cautious about adding to the head count.

The hesitancy is across all industries, from manufacturing to the service industry, she said.

Durnwirth said some companies put in requisitions to fill jobs, then pull back and decide not to hire, or take much longer to fill jobs than they did in the past, she said.

Contract and part-time work provides opportunities to get people in the door, she said. But only 27 percent of such assignments lead to permanent positions, according to some statistics.

Adding to a persistently high unemployment is a lower labor force participation rate.

In post-recession America, the percentage of adults who have a job or are looking for one has declined to a 34-year low, according to a report released last week by Express Employment Professionals, a staffing agency based in Oklahoma.

The decline is a “tragedy in the making, and its impact on the country has been underestimated,” the study states. “When Americans quit looking for work … America faces a significant problem.”

People like retired Marine Brian Kurtz, 56, of Henrico County have simply given up looking for a job.

“Never did I think when I retired from the Marines and worked in various positions that I would have a problem getting a job,” said Kurtz, who recently earned a bachelor’s degree in business management and an associate degree in accounting.

The jobless rate in Virginia crept up for the third consecutive month to 5.7 percent in July. But the real unemployment rate here — when people like Kurtz are included — is in the double digits.

The average annual rate was 11.7 percent in 2012, up from a 7.5 percent in 2008, according to the Bureau of Labor Statistics. The rate includes unemployed workers plus all discouraged and part-time workers as a percent of the civilian labor force.

Part-time or contract employment can be ideal for retirees with pensions and second-income earners, including mothers re-entering the workforce and others who can get health insurance through their spouses’ companies.

But the refrain is the same, for those with or without safety nets: Contract work offers no job security, no retirement pay and no pay for time off.

Cheryl Matt, 53, of Henrico, a technical writer and instructional designer, said she prefers contract work because it gives her flexibility to structure her work schedule to meet the needs of her school-age children.

“When I am ready for a new contract, I can update my résumé with my completed contract information and post it on the online job boards — Monster, Indeed, Dice — and recruiters usually start calling or emailing me within the week, so I never really have to look for a job.”

The downside, besides no benefits and retirement funding, is the pay rate does not change much from year to year, said Matt, who is not the sole earner in the family.

Also, “since you are a temporary worker, you are often ‘invisible’ within a company and are not included in department/company events,” she said.

While Matt has mastered the changing job market and affiliated websites, others are navigating their way in a new work world.

“I knew the job market was tough, but had no idea how bad,” said Godsey, 55, the Richmond resident who lost her job a year ago in June.

In the past, she always relied on referrals to get a job. “The first eye-opener was the fact that very few employers wanted to see me in person or receive résumés through the mail.”

Most employers did not acknowledge receipt of her résumé, she said. After seven months and 92 résumés, she was granted three interviews. She promptly wrote thank you notes and never heard back, except from one company that let her know by email that she was not chosen.

“This new way of finding a job has been totally mind-boggling,” Godsey said.

(804) 775-8023

Commenting is limited to Times-Dispatch subscribers. To sign up, click here.
If you’re already a subscriber and need to activate your access or log in, click here.

Load comments

You must be a full digital subscriber to read this article You must be a digital subscriber to view this article.