The rise of the contract worker has led to a major shift in how companies go about looking for employees, and in many cases, it has helped companies weather the recent recession and slow recovery.
However, now that the trend shows more tendency of becoming a permanent practice, international analysis firms are taking note and performing studies to determine the long-term effects of contract staffing, Quartz reports.
The most merited research has been conducted by the International Monetary Fund, which recently stated that the effects of a great migration toward contract staffing could be felt decades later, and even contribute to financial instability in countries where contract staffing is most prevalent - the U.S. included.
The IMF got involved because the long-term unemployment rates that haven't improved even years after the recession ended are a troubling sign for the global economy. The times are certainly hitting these people hard - the longer a person is out of work, the harder it typicality is to find a job - but it will also have a serious effect on the younger workforce. If young people don't find job early in their career, it could result in a major lack of skills development that will linger for generations.
The logic goes that with fewer job prospects available, this young workforce will increasingly depend on contract staffing.
"This arrangement inhibits temporary workers from building attachments to their employer and gaining valuable skills since employers are less apt to invest resources in training a temporary employee," wrote New York-based economist Allison Schrager.
If this truly is the case, it's concerning that the McKinsey Global Institute found that 58 percent of American employers expect to increase their use of contract workers in the next five years.
Fortunately, changes are coming about and new labor solutions are being developed that could alter the grim future IMF says is possible. Insource Performance Solutions, for example, is dedicated to improving the cost of turnover and training processes, as well as fixing the lack of predictability and efficiency often found when contract staffing companies are used.
