The most common reaction to the June jobs report released last Thursday is ” ho-hum”. Unemployment edged slightly up, but job creation was better than expected. All in all, OK. But reporting is missing the forest for the trees from my point of view.
This was the sixth straight month of significant growth in temporary labor hiring. Most all reportage, including this otherwise fine report, benignly refers to the temporary job growth as a good sign of future job growth when the temp labor is converted into an full-time employee. That thinking would have been fine a decade ago, but not now.
I believe we are witnessing a structural change in the organizational design of companies, and the Affordable Care Act is the catalyst driving the change. Many of the temp jobs being created are likely to become a durable just as they have in France. The French have similar rules to ours regarding company size and the requirement to offer health insurance with a few critical distinctions (e.g. we will not allow larger organizations to dis-aggregate but retain common control to avoid the law; the French do). When France went down this same road decades ago, a full-time job was the most common work structure. Fast forward to today and we find that more than 75% of the French workforce is composed of long-term temporary laborers who have NEVER been an employee of the company they work for.
This is our future as long as the ACA remains structured as it is. HR professionals would do well to put some thought into how their business might be re-aligned with use of long-term contingent labor before the CEO or CFO walks in and tells them to do so.