Is “insourcing” the new “outsourcing”?

The demand for temporary workers has risen at staffing agencies, and onshore workers are also increasingly in demand over offshore workers.

This increased demand is reflected in the industry’s growth. The staffing industry grew 4 percent in 2013 over 2012, according to the American Staffing Association, and that growth is continuing in 2014, as the week of March 31 to April 6 showed growth of 4.59 percent compared with the same week in 2013.

Consider these factors that are creating increased demand.

  • Flexibility. In the wake of the recession, companies are more commonly hiring temporary workers to test out employees or positions before committing to a full-time job with benefits. This process is much easier, and less expensive, using local employees who have little to no moving or transportation costs. In addition, many workers who lost their jobs during the recession have found temporary staffing a great way to re-enter the workforce, resulting in an increased domestic pool of skilled workers. Millennials entering the job market especially enjoy the freedom and flexibility that temporary staffing provides, as opposed to being tied down to one job or industry, increasing the pool of available temporary candidates.
  • Communications gap. Staffing firms and their clients have grown frustrated with the difficulty communicating in the outsourcing process to foreign markets. In addition, offshore workers often have trouble fitting in with U.S. company culture and practices.
  • Made in the U.S.A. In the wake of 9/11, the “buy American” sentiment has increased and translated to personnel, as well, making insourcing versus outsourcing the preferred option.
  • Skills. During the recession, U.S. businesses learned to do more with less. That mentality still exists, as companies now seek well-rounded employees who can handle multiple tasks and roles. American employees are adapting to this environment, honing their skills and learning to balance multiple functions.
  • Hiring incentives. Staffing firms hiring employees from certain designated categories may qualify for the Work Opportunity Tax Credit. Hiring from among veterans, vocational rehabilitation referrals, ex-felons, summer youth employees, those who receive Temporary Assistance for Needy Families, Supplemental Security Income or food stamps, or other designated community residents help businesses attract qualified domestic employees while benefiting the firm financially.