As usual, contingent hiring is expected to be a bellwether for the broader labor economy. “We expect to see improvement for temporary workers before we see it anywhere else,” says Heidi Shierholz, an economist at the Economic Policy Institute. “But that’s not happening yet. We’re still seeing declines in temp help services, though they’re much smaller declines.”
As the economy sputters toward recovery, employers by the thousands are hesitating to hire even contingent workers, and legions of temporary employment agencies are fighting for life. In this environment, workers who aspire to land temporary jobs need to be savvy about their job search -- and prepared to elbow out millions of laid-off Americans desperate for a paycheck.
On the rollercoaster ride of temporary employment, this historic recession has been a high-speed plunge. Yet if the economy has found a bottom, temping could make a substantial -- if gradual -- recovery as companies continue to hedge their staffing bets.
The Recession: Tough Times for Temporary Employment
Here’s how tough things have been for temps: The number of workers on temporary assignments dropped a staggering half-million over the past year to 1.74 million in September 2009 from 2.26 million a year earlier, according to the Bureau of Labor Statistics.
However, some in the industry are hopeful about the future. “The temp market is showing major signs of recovery just in the last two weeks,” says Maureen Mackey, a principal of staffing firm Mackey & Guasco Associates in Darien, Connecticut. Of late, her phones have been ringing with orders from financial companies who are betting on a recovery in their own fortunes.
The upshot for those seeking temporary work assignments? Assess which industries are leading a recovery in your region and position yourself as a top candidate by acquiring industry-specific skills.
Financial Challenges for the Staffing Industry?
Temps also need to understand the financial stress their staffing agencies may be suffering.
Staffing agencies, especially smaller ones that routinely take out short-term loans to make payroll, are stretched. “Nobody’s able to get loans, and we can’t afford to float a $2,000 weekly billing for an admin,” says Mackey. “This is why the temp market is in gridlock.”
These difficult financial conditions are not likely to abate quickly. “While the credit crunch is not getting worse right now, it is very tight,” says Shierholz.
For some of the nation’s 20,000 staffing firms, the strain has been too much. “A lot of staffing companies have gone under in the last couple of years,” reports consultant Bruce Steinberg.
What does this mean for temps? When signing up with an agency, check into the firm’s ability to make payroll, and try to determine the scope of opportunities they’ll eventually be able to offer you. If they’ve failed at maintaining client relationships through these hard times, they may be doomed.
Where the Temping Recovery May Have Already Begun
Despite all this doom and gloom, some sectors of temporary employment have begun to show signs of life:
• “There’s been a pickup in light industrial and seasonal retail hiring, and an uptick in IT,” says Brendan Courtney, a division president at staffing firm Spherion.
• “Consumer products companies, insurance and, ironically, the banking industry are starting to hire temps,” says Mackey.
• “You find a lot of temporary healthcare jobs to cope with varying patient census levels,” says Steinberg.
• “Consulting firms are looking for admin/support people, and the market for secretaries is picking up a little bit,” says Mackey.
American companies remain deeply uncertain about whether sustainable growth will materialize anytime soon. This will most likely temper employers’ desire to renew their growth by bringing on temporary workers.
“The devastation of the first two quarters of 2009 will linger in people’s minds and on their P&L statements,” says Mackey.
Next year may bring a positive turn for temping opportunities but probably not a steep climb. “We may have an extended period of flatness,” says Courtney. “So 2010 will not be a recovery year, but it will be better than 2009.”
What’s the bottom-line forecast? Staffing industry analysts predict that 2010 will see a 5 percent increase in staffing activity.