DREAM BIGGER, REACH HIGHER | PAGE 21

It’s time to say good-bye to 2014! At the end of the year, the editorial staff at DCR TrendLine is eager to share our in-depth research and insights into developments in the staffing industry.

By analyzing the supply and demand trends of the contingent labor market, the DCR National Temp Wage Index provides insights into the relative movement of temporary wage rates in the U.S. economy. This month, we look at the new Skill Gap Index of the American Staffing Association to see which positions are the hardest to fill, and discuss recent federal grants for improving worker misclassification detection in 19 states.

Through the course of the year, DCR TrendLine has been dedicated to providing our readers with information on the most relevant workforce trends that influence and impact the employment of non-employee workers. Now, at the end of the year, we look back at the trends we focused on most heavily in 2014.

For many years, the power and leverage in recruiting was considered to be equal between candidates and employers. However, recently, there has been a shift towards a candidate-driven market. We explore the dynamics of this change and delve into the reasons behind it.

Experts agree that a positive work-life balance is an important aspect to worker health, productivity, and happiness. Recent research reveals that beyond job title and function, where an individual lives also has an impact on work-life balance. Our article looks at the best cities in the United States for achieving a quality work-life balance.

This year we launched a new quarterly topic – “What’s Trending in the Temp Market” – that consolidates our research into a short list of critical trends in key talent sectors of the industry. This month, we present to you what’s trending in Q4 of 2014.

In 2014, a trending topic in human resources is talent communities, and the benefits they offer HR organizations and recruiters. We examine the difference between talent communities and talent networks, and the advantages that each offers in engaging candidates. We also look at the different type of talent communities and offer tips on which parties companies should invite when starting their own internal talent community. Look for the section on building talent communities for non-employees.

The aerospace industry is comprised of a highly skilled and productive workforce. The DCR TrendLine Aerospace Employment Index reveals interesting trends in industry-wide employment. We also discuss the workforce challenges that the aerospace industry faces, and look at demand growth in the global aerospace market. Our feature article for the last month of 2014 appropriately looks into the future. We provide our predictions for human resources over the next few years and discuss what the world of work will look like in 10 years. Keep an eye out for our special section on the jobs that will exist in the future.

Last year, we provided our prediction of workforce trends for 2014. Now at the end of the year, we look back at these predictions to see what actually happened.

The DCR TrendLine team would like to thank our readers for sharing thoughts, questions, comments, and feedback throughout the year. Our goal is to provide insight into the latest trends, metrics, and analysis in the industry so that our readers are able to connect the dots and obtain a clearer picture of the non-employee labor market. As always, we encourage you to send questions and suggestions on topics that you would like us to investigate further.

On a concluding note, the DCR TrendLine editorial staff, along with the entire worker-base of DCR Workforce, would like to extend our wishes for a happy holiday season with continued peace, joy, and success in 2014!

Ammu WarrierAmmu Warrier, President

“NOTE FROM THE EDITOR

INSIDE THIS ISSUE “While there is plenty of uncertainty about how tight the labor market is, there should be little doubt that it is getting tighter” Jim O’Sullivan, Chief U.S. Economist at High Frequency Economics

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Note from the Editor...............................................................................................................................................page 1DCR National Temp Wage Index.........................................................................................................................page 2DCR TrendLine in 2014..........................................................................................................................................page 6Whose Labor Market Is It?.....................................................................................................................................page 7A Look at Some of the Best Cities for Work-Life Balance...........................................................................page 9What’s Trending in the Temp Market – Q4 of 2014.....................................................................................page 12Talent Networks Vs. Talent Communities........................................................................................................page 13Industry Highlight: Aerospace Index................................................................................................................page 16Dream Bigger, Reach Highter..............................................................................................................................page 21Roundup of our 2014 Workforce Predictions...............................................................................................page 24Methodology........................................................................................................................................................... page 28References................................................................................................................................................................page 29About DCR.................................................................................................................................................................page 30

In October 2014, the United States economy added 214,000 jobs and the unemployment rate fell to 5.8 percent, according to the latest figures from the Bureau of Labor Statistics (BLS). Since the start of the year, employers have added more than 220,000 workers on average each month. The workforce participation rate remained unchained from a year ago at 62.8 percent.

The biggest gains were in leisure and hospitality with 52,000 new jobs, followed by education and health services with 41,000 jobs added. Other industry job leaders included professional and business services with 37,000 jobs added, of which 15,100 were in temporary help services. Retail trade, ahead of the holiday rush, added 27,100 jobs. The only industry that lost jobs was information, which includes broadcasting and publishing, which lost 4,000 workers.

According to a national employment report by the Society for Human Resource Management, hiring activity will reach a four-year high in November 2014 for manufacturing and service sectors in the United States.

Average hourly earnings remained unchained, but the length of the workweek at 34.6 hours is at its highest since May 2008.

Retailers are getting ready for the 2014 holiday hiring season. Seven of the country’s largest retailers will together add nearly 400,000 jobs this winter. Macy’s leads the nation with an expected 86,000 seasonal jobs. Videogame retailer Game Stop has announced plans to hire 25,000 seasonal workers, up from 17,000 in 2013. J.C. Penny will hire approximately 35,000 seasonal workers, and Toys “R” Us will add 45,000 workers. Wal-mart has announced plans to hire 60,000 workers, a 10 percent increase from the company’s seasonal hiring last year. And Target expects to hire 70,000 seasonal workers this year.

“DCR NATIONAL TEMP WAGE INDEX

“While this is a sign that the economy is slowly moving in the right direction, if you look below the headline numbers, it’s obvious that today’s labor market is still far from normal. The economy may be growing, but not enough for workers to feel the effects in their paychecks.” ~Economic Policy Institute

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DCR NATIONAL TEMP WAGE INDEX

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A survey by Udemy of 1,000 Americans found that 61 percent of Americans believe that today’s workforce is plagued by a skills gap. And 54 percent reported that they do not already know everything they need to know in order to do their current jobs. About one third reported that a lack of skills held them back from earning a higher salary, and a third reported that inadequate skills caused them to be passed over for a promotion or to not get a job. The most important skills that employees feel they are missing are computer and technical skills.

EMPLOYEES KNOW THEY’RE LACKING SKILLS

The Skills Employees Need, But Don’t Have

Source: Harvard Business Review

According to The American Staffing Association’s Skill Gap Index, occupational therapist is the hardest occupation to fill in the United States. The index, which tracks the number of hardest-to-fill occupations in the country, identified 207 positions as hard to fill. The top 10 are:

1. Occupational therapists2. Physical therapists3. Truck drivers (heavy and tractor-trailer)4. Occupational therapist assistants5. Speech-language pathologists6. Physician assistants7. Merchandise displayers and window trimmers8. Physical therapist assistants9. Nursing instructors and teachers (post-secondary)10. Computer software engineers (applications)

THE HARDEST POSITIONS TO FILL

DCR NATIONAL TEMP WAGE INDEX

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A separate survey of 5,400 executives and employees by Oxford Economics found that of the employees surveyed, only 44 percent felt that the leaders at their company were capable of managing their employees. And only 34 percent of executives agreed that their leaders are prepared to lead a diverse workforce. The survey revealed that executives feel that part of the challenge in corporate leadership is that the base of workers is becoming increasingly fragmented. Approximately 83 percent of executives said they would be using more freelance or temporary workers in the next three years.

In the September edition of DCR TrendLine, we wrote about the increased popularity of workplace flexibility and the benefits it offers both workers and employers. A new survey released by the Society for Human Resource Management (SHRM) found that more than three-quarters of human resource professionals from organizations that offer flexible work find it is somewhat or very successful.

Of the 39 percent of respondents that offer telecommuting, 26 percent said that it increased productivity and 32 percent said absenteeism rates decreased. Approximately 83 percent of respondents said telecommuting would be more prevalent in the next five years, and 89 percent said other flexible work arrangements would be more prevalent in the next five years.

In a separate survey by SHRM, more than one-half of respondents said that flexibility had a positive impact on attracting and retaining workers, reducing turnover and absenteeism rates, and increasing productivity, quality of work, company culture, worker health, company public image, worker morale, and job satisfaction. When asked what makes flexible arrangements work, HR professionals listed buy-in from top management, commitment from workers, and a supportive organizational culture as the most important.

EMPLOYEES KNOW THEY’RE LACKING SKILLS

Skills Needed Today and in the Future

Source: Oxford Economics

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DCR NATIONAL TEMP WAGE INDEX

“This is one of many actions the department is taking to help level the playing field for employers while ensuring workers receive appropriate rights and protections.” ~Thomas E. Perez, U.S. Secretary of Labor

“The U.S. Department of Labor in September 2014 awarded a total of $10,225,183 to 19 states for implementing or improving worker misclassification detection and enforcement indicatives in unemployment insurance programs. Additionally, four states will share $2 million in additional grant funds due to their high performance or most improved performance in detecting employers who misclassify workers.

These funds will be used to increase the ability of state unemployment insurance tax programs to identify cases where employers improperly classify employees as independent contractors or fail to report wages paid to workers.

FUNDING WORKER MISCLASSIFICATION DETECTION

The U.S. Department of Labor in September 2014 awarded a total of $10,225,183 to 19 states for implementing or improving worker misclassification detection and enforcement indicatives in unemployment insurance programs. Additionally, four states will share $2 million in additional grant funds due

DCR TRENDLINE IN 2014In 2014, DCR TrendLine has covered a large assortment of topics. In this article, we look back at the trends we focused on most heavily this year.

This year, with global economic growth creating a new level of competition for talent, HR organizations transferred their focus from cost reduction to retention and engagement.

In 2014, an organization’s talent was repeatedly pointed to as the driving force behind business growth, innovation, transformation, and overall company performance. Economic uncertainty and globalization continue to influence the evolution of business practices, and industry practitioners are finding that they have to seek out robust solutions to address the complexities of managing a non-traditional workforce.

HR TECHNOLOGYHR technologists and professionals estimate that HR technology will be an $8.1 billion dollar industry in 2015. Technology companies are continually releasing innovative products that provide HR organizations with cloud-computing capabilities, mobile access, social infrastructure, and the ability to better engage with talent for hiring and retention.

THE GROWING USE OF NON-TRADITIONAL TALENTA report by the National Employment Law Project (NELP) and the National Staffing Workers Alliance (NSWA) states that about 2.5 percent of all American jobs are in the employment services industry, which includes staffing agencies, professional employer organizations, and employment placement agencies. According to Ardent Partners, nearly 45 percent of the world’s total workforce will be comprised of contingent workers by 2017. A recent study by MBO partners predicts that the number of independent workers in the U.S. will grow to just under 40 million in 2019.

TALENT ANALYTICSHR organizations in 2014 have been exploring big data and data analysis as a tool to enable decision-making and workforce planning. In the growing field of talent analytics, recruiters are using predictive analysis to screen job candidates’ potential to become good employees.

ONLINE TALENT PLATFORMSOver the past few months, online talent platforms and freelance management systems have risen in usage as a means of finding and sourcing contractors and freelancers with specialized skills and experience. Ardent Partners expects that reliance on online talent platforms and freelance networks will grow by 96 percent over the next two years.

THE HEALTHCARE INDUSTRYExtended longevity and an aging population, coupled with the large volume of Americans with insurance coverage under the Affordable Care Act (ACA), have caused an increase in the demand for all areas of health professionals. The Bureau of Labor Statistics (BLS) estimates that there will be at least 5.7 million new jobs in healthcare by 2020.

GENERATION Z WORKERSGeneration Z refers to the current largest generation group in the U.S. While many Gen-Zers are still in school, there are currently more than 11 million Generation Z workers in the North American workforce, making up 7 percent of total workers. By 2015, they will reach 20 million, 25 million by 2017, and 30 million by 2019. As roughly 30 million Baby Boomers retire, Generation Z will represent the greatest generation shift the workplace has seen.

SOCIAL SOURCINGAs the usage of social media increasingly becomes the preferred method of connection and collaboration for most talent, recruiters are embracing social sourcing as a channel for recruiting top candidates. The Aberdeen Group’s 2013 Talent Acquisition Survey found that top-performing recruiters found social sourcing to be more effective than traditional means of recruiting for pinpointing viable candidates and building relationships with passive candidates.

MINIMUM WAGEAll year long, the federal and state governments have been discussing the merits and risks of increasing the minimum wage. Several states have opted to institute higher minimum wage requirements than the federal governments, while other states are still voting on wage hikes. In the federal government, however, minimum wage is a gridlocked issue.

TALENT BRANDA survey by LinkedIn this year found that a strong employer reputation is a huge motivator for candidates to apply for a position. Over 56 percent of respondents believe that a company’s talent brand is the most important consideration for a new job.

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WHOSE LABOR MARKET IS IT?In late 2011, the power and leverage in recruiting was considered to be an even split between candidate and employer. However, over the past months, recruiters have observed significant changes in hiring practices, including a shift towards a candidate-driven market.

New data from the MRINetwork Recruiter Sentiment Study reveals that highly skilled candidates drive the talent market. Experts attribute the candidate-driven market to the talent pool being weak. As the economy continues to recover, employers are increasingly searching for star workers with specialized skills and experience. This leaves top performers with a distinct advantage, with multiple job offers providing these candidates with more bargaining power and the ability to reject less desirable work positions and arrangements. According to the MRINetwork study, 42 percent of candidates refused job offers due to having accepted an offer with another company.

A Candidate-Driven Market – Recruiter Sentiment

Source: MRINetworks

““Many respondents to the survey pointed to the fact that ‘A’ players are being heavily courted and have multiple offers to consider. Aggressive counteroffers are also on the rise, with employers making more tempting and lucrative offers.” ~Rob Romaine, President of MRINetwork

WHOSE LABOR MARKET IS IT?

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The candidate-driven market and the increasing number of rejected job offers signal certain things to recruiters:

• Employment branding is important to entice star talent. Employers need to identify the reasons why their company is a good place to work, and market it to attract star performers.• HR departments should find ways to streamline their hiring processes to avoid losing top choice candidates.• Salary and benefits packages need to be aggressive, not simply market-competitive.• When it comes to in-demand workers, counter-offers are important to consider to retain skilled workers. Data indicates that the number of candi dates accepting counter-offers from their current employers is increasing. • Employers need a faster decision-making process and awareness of the competitive nature of the talent market.

A LOOK AT SOME OF THE BEST CITIES FOR WORK-LIFE BALANCE

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Recent research indicates that a positive work-life balance is not solely dependent on the job title or job function. It turns out that where an individual lives can have an impact on work-life balance.

Finance site NerdWallet ranked 536 cities based on four main factors – the mean hours worked per week by an average worker, daily commute time, median earnings for full-time year-round workers, and median rent. According to the Organization for Economic Co-operation and Development, people in the U.S. work an average of 1,790 hours per year.

A common theme emerged among the highest-ranked cities – a majority of the top ten are home to major colleges or universities. Typically, the cities with the best work-life balance have relatively low average incomes. The top ten cities on the list have an average income of $37,105, while the average income in the U.S. is $51,371. However, monthly rent in these cities is typically lower, averaging $776 per month.

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A LOOK AT SOME OF THE BEST CITIES FOR WORK-LIFE BALANCE

BLOOMINGTON, INDIANABloomington tops the ranking of the best cities for work-life balance. It has the lowest number of average weekly hours worked at 31.9 hours and a short average commute time.

The median earnings in Bloomington are $35,908 and median gross rent is $788. According to Lynn Coyne, president of the Bloomington Economic Development Corporation, being the home of Indiana University (also the top employer in the region), is a big reason that Bloomington is first on the list. The campus community offers residents a variety of theater experiences, athletic events, and other community outreach programs.

10 Best Cities for Work-Life Balance by Score

Source: NerdWallet

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““A lot of these places ended up being places with low cost of living where there isn’t a huge demand for housing – places where you don’t have to work multiple jobs to make ends meet. They’re definitely places with more diverse economies. A lot of these cities have research companies, universities, and the health care industry.” ~Divya Raghavan, Analyst at NerdWallet

“Our feedback from employers who have come and grown in this area emphasize that the ambiance and the quality of the work environment and living environment in Bloomington is a major force in keeping and attracting talented workers.” ~Lynn Coyne, President of the Bloomington Economic Development Corporation.

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A LOOK AT SOME OF THE BEST CITIES FOR WORK-LIFE BALANCE

PROVO, UTAHWorkers in Provo average 30.9 hour workweeks, the lowest among all 536 cities in the study.

The average commute time is 18 minutes, median earnings are $32,418, and median gross rent is $744. Brigham Young University, the third-largest private college by enrollment in the U.S., is the largest employer in the area. As of August 2014, total nonfarm employment in Provo has grown 2.8 percent year-over-year.

GAINESVILLE, FLORIDAThe average Gainesville worker works 32.5 hours a week. Major employers include University of Florida Health and the University of Florida, the eight-largest university in the United States.

The mean travel time to work is 16.5 minutes, median earnings are $35,099 and median gross rent is $851. The Gainesville Chamber of Commerce says that software and IT companies plan to create over 1,100 jobs in the area over the next three years.

THE WORST CITIES FOR WORK-LIFE BALANCEAccording to the list, the ten cities with the worst work-life balance have higher incomes for full-time workers, but higher monthly rents, lengthier commutes, and longer work hours.

Dale City CDP, Virginia was ranked the worst city for work-life balance with mean weekly hours worked of 39.1 and an average commute time of 40.5 minutes. Other cities with low rankings include Waldorf CDP, Maryland; Menifee, California; Tracy, California; Germantown CDP, Maryland; and New York City.

BEST JOBS FOR WORK-LIFE BALANCEA survey by online career site Glassdoor revealed some of the best jobs for a positive work-life balance. Workers in the top five jobs said that their positions gave them the opportunity to have fun, work with co-workers they liked, and easily take time off when needed.

The best jobs included data scientists, SEO specialists, tour guides, lifeguards, social media managers, group fitness instructors, user experience designers, firefighters, equity traders, law clerks, investment analysts, game designers, real estate brokers, substitute teachers, and carpenters.

“Professionals with a healthy work-life balance tend to report higher satisfaction in their jobs. By maintaining a quality work-life balance, professionals are often motivated to work hard and be productive, helping to avoid burnout.” ~Scott Dobroski, Career Trends Analyst at Glassdoor

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WHAT’S TRENDING IN THE TEMP MARKET – Q4 OF 2014At TrendLine, we’re always focused on what’s trending in anything to do with contingent worker supply and demand. This month, we’re presenting our quarterly view of critical trends in key sectors of human resource management.

As recruiting organizations strive to become more proactive rather than reactive, it becomes more important to engage passive candidates and build relationships with these potential workers. Talent communities provide access to passive candidates and their networks, and give organizations a platform to build relationships with candidates. Over time, talent communities provide an opportunity to engage with a large volume of candidates in a low-cost, efficient way. Online labor exchanges and freelancer management systems provide a solution for managing on-demand talent.

Workforce diversity has been an impor-tant trend in the industry for a while, but recently researchers have been analyzing data to find that having a diverse workforce can help companies be more productive. According to a recently released report from The Economist Intelligence Unit (EIU), the definition of workforce diversity no longer consists of avoiding race, ethnicity, and gender discrimination, but now includes paying attention to values and motivations. The EIU report reveals that companies are rethinking the workplace to give workers the flexibility to work in the way that is most productive for them. Johnna Torsone, Chief HR Officer at Pitney Bowes, says that the question facing HR executives is “whether you can create an environment that lets very different people be who they truly are while maximizing their talent in order to support high performance.”

Recently, the news has had many stories of the new workspace arrangements in major technology companies. Google’s new campus is designed to maximize chance encounters with co-workers, Facebook plans to put workers in a single mile-long room, Yahoo revoked remote work arrangements, and Samsung revealed plans for a new U.S. headquarters with social spaces designed to cause workers from different fields to communicate and collaborate. Companies use key efficiency metrics such as cost per square foot to measure space. And new studies show that spaces can be designed to produce specific performance outcomes, such as productivity in one space and increased innovation in another.

#TALENTCOMMUNITIES #DIVERSITY #WORKSPACES

TALENT NETWORKS VS. TALENT COMMUNITIESThose working and interested in the HR and recruiting functions have probably heard about talent networks and talent communities. Both derive from the belief that every recruitment campaign should not be solely focused on finding applicants for specific jobs but also aim to build a pool of talent that HR organizations can engage and leverage when recruiting for future positions.

A talent community is an open group of members built around common or shared interests. People join talent communities to engage with workers with similar skill sets or to share common interests. Companies build talent communities as relevant industry or thought leadership communities with the goal of encouraging skilled candidates to join and engage in conversation. The goal of a talent community is to foster dialogue and identify members whose content and activity demonstrate their fit with the organization’s culture and needs.

A talent network, meanwhile, is an opt-in candidate database that allows organizations to build talent pools and talent pipelines for future job opportunities. Often, a talent network is based on a job alert trigger system where a member selects the type of job they would be interested in, and are advised via email when such a position becomes available. Engagement is flat and there is one-way communication, as all content is created by the hosting organization and relevant targeted content is broadcast to specific individuals within the talent network. The goal of a talent network is to provide a better candidate experience and better return for every job ad placed. Generally, asking candidates to opt-in to a talent network can lead to almost 20 percent more applicants for future job postings.

The importance in understanding the difference between the terminologies is because many vendors refer to capabilities for building talent communities, when really they are providing talent networks. Often, executives and analysts refer to their job alert system or their CRM as a talent community. Some job boards refer to their resume database as a talent community. Talent networks have had countless success stories in different organizations, and can be largely automated with recruitment technology. Recent data shows that talent networks are among the top three sources of hires for most companies.

Talent communities, on the other hand, require a lot more effort to build and keep a community engaged. Consistent community management is important to enable a talent community to provide HR organizations with a strong pipeline of vetted and engaged talent ready when a role becomes available.

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THE DIFFERENCE BETWEEN TALENT COMMUNITIES AND TALENT NETWORKS

TALENT NETWORKS VS. TALENT COMMUNITIES

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There are three broad areas of talent communities. For organizations developing talent communities, it is imperative to remember that talent communities are not simply a Facebook careers page or a LinkedIn group. These are part of an effective talent community management strategy, but either of these social channels by themselves is too narrowly focused.

A company-branded talent community showcases an organization’s employment value proposition, and gives members a feel of what it would be like to work at that company. Often these talent communities seek to bring together the current, past, and future workers of an organization.

A profession-based community is formed around a profession and seeks to bring relevant and valuable information to its members. These communities are not job-focused, but rather focus on careers and career paths. Github, for instance, is a software engineering oriented community that offers developers the opportunity to connect with their peers. A version of this type of community is a special interest community built around a common purpose.

For example, many organizations offer specific communities aimed at transitioning military personnel to civilian life upon their return.

The third type of community is a hybrid combination of the professional and the company-branded approach. These communities showcase an organization’s career opportunities while trying to engage members in a conversation about relevant topics. Often these communities focus on hard-to-fill and high demand positions in the organization.

DIFFERENT TYPES OF TALENT COMMUNITIES

TALENT NETWORKS VS. TALENT COMMUNITIES

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One of the first questions organizations that are building a talent community ask is “How can I quickly grow a candidate talent community from scratch?” A talent community that is just starting off can be quickly established by using a variety of sources.

Top Candidates – If the company already has a talent network, top candidates that were not extended a job offer can be invited so that recruiters can continue to engage and nurture them.

Employees and Candidate Referrals – Employee referrals are consistently rated as a quality source of hire by recruiters. Referred candidates are more likely to stay at a company longer and be successful. Employees and their referred candidates can bring visibility and interest to a company’s talent community.

Social Media – Talent profiles maintained on social sites such as LinkedIn and Facebook can be mined for potential candidates. Recruiter conversations with potential candidates should include a pitch for joining the organizational talent community, even if the immediately available job opportunity is not of interest.

University Recruiting – On-campus or off-campus recruiting events can result in adding high potential students to the talent community.

Past Workers (Alumni) – Company alumni should be invited to join the talent community, as they are able to candidly discuss their experience of working at the organization, and can refer professional contacts who may be interested in working at the company.

WHOM TO INVITE?

According to recent research by Ardent Partners, less than 35 percent of enterprises currently collect their non-employee talent in a single, centralized program. And only 32 percent of companies have ongoing education and training for non-employee talent. As freelancers and independent contractors can now be found in almost every section of a firm, adopting measures that allows executives and managers to best leverage this high-quality skillset becomes important.

The study by Ardent Partners found that 77 percent of respondents believe that total talent management will be a widely adopted approach for managing all types of talent in the next two years.

Talent communities that focus on the non-traditional talent market should aim to bring together high-skilled talent with value-added staffing suppliers.

TALENT COMMUNITIES FOR NON-EMPLOYEES

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INDUSTRY HIGHLIGHT: AEROSPACE INDEX

The United States represents the largest aerospace market in the world, followed by

France, U.K., Germany, and Canada. In 2012, the U.S. aerospace industry contributed

$118.5 billion in export sales to the American economy. The American economy

dominates in commercial aircraft manufacturing, with exports of civil aircrafts, engines,

avionics, and related components representing 88 percent of all aerospace exports.

The top 20 U.S. aerospace and defense companies had combined revenue of $266.2

billion, an increase of 1.5 percent from the year before. According to a study by the U.S.

Department of Commerce, aerospace exports directly and indirectly support more jobs

than the export of any other commodity. The U.S. aerospace industry directly employs over

500,000 workers in scientific and technical occupations, and supports more than 700,000

jobs in related fields.

The DCR TrendLine Aerospace Employment Index reveals that the aerospace industry employment as a whole has an interesting trend of a

two-year cycle of ups and downs since 2006, excluding a steep dip in mid-2008 due to major events. Examining the current trends reveals that

for the next two years, aerospace employment will continue to increase by six to eight index points. The Aerospace Industry Association (AIA)

also expects sales to increase by 12 billion dollars for 2014.

Aerospace Employment, 2013

Source: AIA

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INDUSTRY HIGHLIGHT: AEROSPACE INDEX

“WORKFORCE CHALLENGES FOR THE AEROSPACE INDUSTRY

The Aerospace Industry Association (AIA) says that American aerospace workers are among the most highly productive and skilled workers in the

world. The growing global market for aerospace production requires a large supply of workers in science, technology, engineering, and math (STEM)

disciplines, and workers with specific manufacturing skills.

The industry faces challenges in filling job openings due to this high reliance on workers with the right technical skills. Currently, approximately

300,000 U.S. students graduate every year with bachelors or associates degrees in STEM fields, a figure that needs to be raised by one-third to meet

industry needs.

“We do not have a robust

pipeline of young people with

the right skills and training

coming into the workforce.”

~Marion Blakey, CEO of AIA

DCR TrendLine Aerospace Employment Index

INDUSTRY HIGHLIGHT: AEROSPACE INDEX

Further exacerbating the workforce challenge is the aging population of aerospace industry workers. The AIA found that in 2007, almost 60 percent of

U.S. aerospace workers were aged 45 or older, and currently 9.6 percent of the industry is eligible to retire. Experts predict that by 2017, 18.5 percent of

the industry will be eligible to retire. A study of the aviation workforce in 2012 by Aviation Week found that the U.S. aerospace and defense industry had

lost 56,000 employees in 2012, yet only hired 28,000.

The AIA is also concerned about the lack of diversity in the industry, stating that the industry is trying to develop programs to address hiring and retention

of women and minorities.

According to a recent outlook report from The Boeing Company, there will be a global demand for 35,280 new jet aircrafts from 2013 to 2032 at a value

of $4.8 trillion. This accounts for an average of over 1,700 new aircrafts per year, a 40 percent leap from production in 2012.

Much of this growth is due to demand in the Asia Pacific region, with the CAPA Centre for Aviation forecasting that the area will take delivery of 12,820

new airplanes in the next 20 years. By 2031, experts estimate that 32 percent of global airplane passenger traffic will be from Asia Pacific.

Emerging aircraft manufacturing industries in China, Canada, Brazil, Russia, and Japan, are expected to increase their share of the global commercial

aviation industry.

“If we look at the demographics of our workforce across Boeing and much of the aerospace industry, about 50 percent of our

top engineers and mechanics will be eligible to retire over roughly the next five years.” ~Dennis Muilenburg, President and COO

of Boeing Co.

Global Aircraft Demand, 2013 to 2032

Source: The Manufacturing Institute 18

THE GLOBAL AEROSPACE MARKET

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INDUSTRY HIGHLIGHT: AEROSPACE INDEX

THE IMPACT OF AIRCRAFT MANUFACTURING ON THE U.S. ECONOMYAn analysis by Deloitte on the aerospace industry found that a new aircraft assembly plant has the potential long-term annual impact of up to $1

billion on a local economy. A new aircraft assembly plant is expected to add $400 million to $600 million in annual net value by itself, and to increase

employment with a projected 1,000 annual direct hire employees and 1,500 annual indirect employees, for an annual employment payroll of $147

million. Deloitte also predicts a $300 million to $400 million annual net increase in demand for local goods and services due to a new plant. Finally,

construction of a new assembly plant would create a demand for approximately 3,000 construction jobs.

”For the time being, foreign aircraft programs still need Western products. As more joint ventures and outsourcing occurs in

emerging markets, with technology transfer, in five to 10 years we’ll see more intense global competition. So, we need to get

serious on all the fronts – including innovation and talent – to maintain our global leadership.” ~Karl Hutter, COO of

Click Bond, Inc.

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Global Aerospace Employment

Aerospace Manufacturing Plant Hourly Earnings

Source: AIA

Source: World Economic Forum

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INDUSTRY HIGHLIGHT: AEROSPACE INDEXBOEING’S MOVE

Boeing recently announced plans to shift the majority of its defensive services and support work out of the state of Washington to other U.S. locations.

The company plans to move as many defense jobs as possible to its booming commercial operations. The transition of approximately 2,000 jobs is

expected to take three years to complete, and most of the work will be relocated to Oklahoma City and St. Louis, with a smaller share of work going

to Jacksonville, Florida, and Patuxent River, Maryland. In response to declining U.S. defense spending and increased competition, Boeing is looking to

remove $2 billion in costs from its defense business.

The state of Washington received a $4.3 million grant to help defense suppliers transition to other industries.

“The decision to consolidate these activities was

difficult because it affects our employees, their

families and their communities. However, this is

necessary if we are going to differentiate ourselves

from competitors and stay ahead of a rapidly

changing global defense environment.”

~Chris Chadwick, CEO of Boeing Defense, Space

and Security. “

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DREAM BIGGER, REACH HIGHER

Just in the past year, HR functions and strategy have changed dramatically. As organizations place a higher emphasis on aligning talent strategy with

business goals, and technology continues to play a more prominent role in HR processes, HR is starting to transform. A complex economy and shifting

demographics, combined with the continuous introduction of disruptive technologies, has changed the traditional definition of what work is and what

work looks like. HR organizations are strategically evolving to better meet the needs of companies and workers. It’s no wonder that industry analysts and

experts are wondering what the world will look like in five or ten years.

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DREAM BIGGER, REACH HIGHER

A survey conducted by the Society for Human Resource Management (SHRM) found that the majority of HR professionals expect that their organization will have a larger workforce in ten years. Approximately 29 percent expect that they will use a growing number of contract and temporary workers.

According to respondents, to attract, retain, and reward talent over the next ten years, the most important tactics will be offering flexible work arrangements; creating an organizational culture with trust, open communication, fairness, and collaboration; providing opportunities for career advancement; and offering a better total rewards package.

Additionally, HR practitioners believe that the most important bodies of knowledge for HR organizations would be strategic business management, talent management, change management, and workforce planning.

Challenges Facing HR Over Next 10 Years

Source: SHRM

PREDICTIONS FOR HR IN THE NEXT 10 YEARS

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DREAM BIGGER, REACH HIGHER

In-house HR will downsize – Industry analyst Brian Sommer claims that new technologies and increased employee participation in HR processes through self-service systems will cause a shift to smaller HR departments.

HR outsourcing will increase – Many transactional HR functions will be outsourced to HR agencies or specialists. According to Dr. Janice Presser, CEO of The Gabriel Institute, believes that entry-level HR jobs will disappear due to outsourcing.

HR will embrace strategic thinking - A recent Economist Intelligence Unit report emphasized the need for executives to partner with HR to drive growth. Elizabeth Brashears, the director of Human Capital Consulting at TriNet HR, predicts that the trend towards a more strategic HR organization will help drive the creation of new job titles.

More specialized roles – Janine Truitt, Chief Innovation Officer of Talent Think Innovations, believes that currently there are more generalists in the HR field, and that in the future there will be more specialized roles as the employment landscape becomes more complex.

Growth of big data analytics – As big data offers new means to provide value, HR departments will add workers who can analyze and make projections using technology and tools. HR departments will continue to accommodate the increased use of predictive analytics and look for ways to drive positive change using the information derived from big data analysis.

Managing a remote workforce will be the norm – As more companies embrace workplace flexibility policies, HR will become more adept at managing remote and flexible workforces. Wim de Smet, CEO of Exaserv, predicts that automation will be key and that new technology will be used to analyze productivity as opposed to working time.

HR will become more like marketing – HR, especially the recruiting function, will have to think more like marketers to emphasize employer brand value and build relationships with potential talent. Brian Sommer says that recruiters will have to think of candidates as a specific micro-segment that need to be targeted to bring into the company, using an approach similar to that of a marketing firm.

Sustainability Officer – As corporate social responsibility becomes more important, sustainability officers will oversee a company’s carbon footprint and be responsible for implementing strategies to shrink it across the entire organization.

Big Data Analyst – Predictive analytics and business intelligence has become more crucial to companies for decision-making. Experts forecast that the scope of intelligence applications will continue to grow, with McKinsey Global Institute predicting that 190,000 more data analytics experts will be needed by 2018 in the U.S. alone.

Web User Experience Manager – Websites have become the go-to tool to find information about a company’s products and services. With the growing use of mobile devices to peruse websites, companies will be looking to find experts who can analyze and improve on the customer experience.

Social Media Manager – Managing a company’s brand and image was once a part of the duties of public relations departments, but companies of all sizes today are looking to engage and connect with their online communities, track their competitors, and reinforce partnerships.

Privacy Consultant – As the digital footprint of companies continues to grow with an increasing amount of transactions being done online, businesses need to protect their company, employee, and customer privacy. Careers in privacy consulting will require a background in technology, along with an understanding of legal constraints and how they apply in the digital world.

THE HR DEPARTMENT OF THE FUTURE

JOBS THAT WILL EXIST IN THE FUTURE

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ROUNDUP OF OUR 2014 WORKFORCE PREDICTIONS At the end of 2013, DCR TrendLine provided our prediction of workforce trends we expected to be of importance in 2014. Now as we approach the end of 2014, we take a look at some of these predictions to determine what happened over the course of the year.

In 2014, we witnessed a shifting of the workforce, with a new generation of workers arising as Baby Boomers start to retire and a movement away from conventional workspaces to remote and flexible work arrangements.

Last year, developing countries contributed 50 percent of the world’s GPD. In 2018, this is expected to grow by 55 percent due to significant increases in business opportunities centering on these newer economies. The global middle class is expected to grow from 1.8 billion in 2009 to 3.2 billion in 2020, with Asia’s middle class tripling in size to 1.7 billion in five years.

THE GLOBAL ECONOMY

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ROUNDUP OF OUR 2014 WORKFORCE PREDICTIONS

Last year we forecasted that the Affordable Care Act (ACA) would cause some employer to delay hiring. The impact of health care reform makes hiring full-time workers more expensive for employers.

A recent study by Casey Mulligan, a professor of economics at The University of Chicago, reveals that ACA pushes workers towards fewer work hours or part-time work. Mulligan’s analysis estimates that ACA will reduce weekly per-person employment and aggregate hours by slightly more than 3 percent or approximately 4 million full-time-equivalent workers.

A new economic study by the American Action Forum shows that ACA is reducing the pay of workers at small businesses by #22.6 billion every year. The study also states that the law’s regulations and increased premiums are likely responsible for American employers having shed more than 350,000 jobs. California, Florida, New York, Ohio, and Texas have each been attributed to losing more than 20,000 jobs due to health care reform.

We predicted last year that freelancers and non-employee workers would continue their growth trajectory in 2014. Throughout the year, we’ve written about the upward trend of temporary employment.

Currently, approximately one-third of the American population is working as freelancers. And the number of staffing jobs has reached a record high of 2.8 million. A new study by MBO Partners reveals that the number of independent workers in the United States will grow to just under 40 million in 2019.

According to the Freelancers Union, freelancers add about $715 billion to the U.S. economy annually.

“I think that there’s some work to be done there at the Bureau of Labor Statistics. I think that what we really need to do is to say that this is much more nuanced – that it’s not like an on-off switch, are you a freelancer or not? We really want to know how much are your freelancing? Is it one gig?...is it episodic? Is this something you are doing more often? And that will help us plan as an economy.” ~Sara Horowitz, Founder and Executive Director at Freelancers Union

THE IMPACT OF HEALTHCARE ON THE WORKFORCE

THE GROWTH OF FREELANCING

Year-over-Year Change in Percent, September 2013 to September 2014

“

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ROUNDUP OF OUR 2014 WORKFORCE PREDICTIONS

We expected shifting population factors to have an impact on workforce demographics in 2014 and over the next few years. By 2020, half of U.S. workers will be milliennials. Employment data from September 2013 to September 2014 shows that the labor force participation rate has decreased by 0.4 percent, and much of this can be attributed to the retirement of the Baby Boomer generation.

According to the 2014 Deloitte Millennial Survey, Generation Y will comprise 75 percent of the global workforce by 2025.

Historically, older workers represent a small portion of the workforce, but new studies predict that in 2022, workers aged 55 and older will represent 25.6 percent of the workforce.

Workers 55 & Older, Percentage Share of Labor Force

Source: BLS

CHANGING DEMOGRAPHICS

NEW RECRUITING CHANNELSIn 2013, applicants continued to grow discouraged with online job application platforms and resume black holes, and we forecasted that employers would take note and start to focus on improving candidate experience in 2014.

This year, recruiters have been more active on social networks for the purposes of social sourcing. And recent surveys have proven that social sourcing is more effective in time to hire and cost per hire compared to traditional channels.

In 2014, building talent communities and talent networks have been an area of focus for HR organizations. Corporate talent communities provide companies a method to showcase their employment brand, and actively engage candidates and cultivate relationships even before job opportunities become available.

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ROUNDUP OF OUR 2014 WORKFORCE PREDICTIONS THE SKILLS GAP

We predicted that the skills gap would be a continuing issue in 2014. Paying close attention to this trend throughout the year shows that the skills gap has been widening instead of closing.

A recent study by Udemy found that 61 percent of Americans believe that today’s workforce is impacted by a skills gap. In particular, approximately half of large U.S. companies report a shortage of science, technology, engineering, and mathematical (STEM) skills.

The DICE-DFH Vacancy Measure reveals that the time to fill open positions has reached a national average of approximately 25 days, the longest duration since 2001. The Wall Street Journal says its survey of small business owners found that one-third were unable to find workers with the skills that they need.

The Bureau of Labor Statistics released data showing that there were 4.7 million job openings in June of 2014, and more than half of employers said that they couldn’t find qualified candidates.

METHODOLOGY

The DCR National Temp Wage Index is developed to assess the relative movements of temporary wage rates in the U.S. economy. The wage rates for temporary workers or contingent workforce are based on payments made by staffing firms to these workers based upon hours worked. Data collected from sources such as Bureau of Labor Standards (BLS) and other government sites as well as an internal pool of staffing companies and consultants, is aggregated and classified based on regions and skill categories, to arrive at an aggregate index.

The baseline for the index is set at 100 for January 2007. Index value for a particular month indicates relative wages with the said baseline and is representative in terms of direction and scale of change. Five years of data has been included to observe seasonal patterns and distinguish seasonality from long-term wage movements. The data and the model has been further refined over last six months.

DCR TrendLine combines the exhaustive data from BLS with practical and more recent developments and data from on-field consultants and clients, to provide timely near-term indications of trends and consistent long-term actionable and objective information.

DCR TrendLine uses multiple economic variables to ensure the robustness of its forecasts and cross-validation of trends.

Key data sources and parameters of interest included and influencing the index are:Unemployment dataGross Domestic ProductPrime rate of interestNew and seasonal Job openingsNon Farm employmentJob OpeningsAll ExportAll ImportAverage Hourly Earnings of All Employees Total PrivateAggregate consultant data on job market parameters

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SOURCE DATA

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DCR Workforce is an award winning, best-in-class service provider for contingent workforce and services procurement management. Our proprietary SaaS platform (SMART TRACK) assists in providing customizable VMS and MSP Solutions to manage, procure and analyze your talent with complete transparency, real-time control, high performance and decision-enabling business intelligence.

DCR Workforce serves global clientele including several Fortune 1000 companies. Customers realize greater efficiencies; spend control, improved workforce quality and 100% compliance with our services.

For more information about DCR Workforce and its Forecasting Toolkit (Rate, Demand, Supply and Intelligence) including Best Practice Portal, visit dcrworkforce.com

For more information call +1-888-DCR-4VMS or visit www.trendline.dcrworkforce.com

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ABOUT DCR

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