Temp Agencies Stand to Benefit from ObamaCare Regulations
Smaller businesses turn to them to stay below worker cap
Whatever your opinion of Obamacare, there's no denying that its full implementation next year presents a major challenge for many businesses across the country. Starting in 2014, firms of more than 50 employees will be required to offer health insurance to their full-time employees — defined as those that work more than 30 hours per week — or pay a penalty. These expenses, along with added costs of complying with the law, will force many businesses to raise prices or reduce profit margins, two things business leaders never enjoy doing.
While these mandates will increase costs for many businesses across the country, there actually are others that will benefit from the law. Pharmaceutical and insurance companies were brought onboard early in the healthcare reform effort by the the Obama Administration, lured by the prospect of tens of millions of new customers who would be required to buy health insurance. But if you believe the stock market, another industry that stands to gain from Obamacare implementation is the temporary staffing industry.
Staffing companies like Robert Half International and On Assignment have seen their stock prices soar since President Obama's reelection in November, as the election made it nearly certain that the implementation of the law would continue as planned. "In general [Obamacare] is viewed as something that will lead to increases in the penetration rate of temporary workers," says Tobey Sommer, an analyst with SunTrust Robinson Humphrey. Firms like Robert Half International are especially well positioned to benefit from the law, Sommer says, because they specialize in small and medium-sized companies, the very sort that may be using temporary workers to help them stay below that all-important 50-worker mark.