Temporary Jobs Are Climbing, A Possible Sign of Recovery
Still-cautious employers are slowly starting to hire temporary workers, a possible sign that a jobs recovery could be on its way.
Companies added 52,000 temporary jobs in November, according to the Bureau of Labor Statistics. Since July, temporary employment has been growing from month to month, totaling 117,000.
Nationally the unemployment rate fell to 10 percent in November from the previous 10.2 percent.
“In the past, temp employment has been a leading indicator coming out of a recession, but there’s no promise that it’s an indicator now,” said Melanie Holmes, vice president of employment services company Manpower .
Temporary employment is a way for wary employers—still unsure if the economy is rebounding—to add workers without having to make the larger investment and commitment to permanent employees.
As past recessions have shown, typically an increase in temporary employment leads to gains in permanent employment a couple of months later.
“In the last recession, temp bottomed in April of 2003 and full time employment bottomed in August 2003,” said Jeff Silber, managing director of BMO Capital Markets.
He adds that this year, temporary employment bottomed in July.
While a full-blown job recovery is not guaranteed, some employment agencies like Adecco have seen an increase in hiring from their clients, albeit at a slower pace then in previous recessions.
“It’s not a huge uptick, but we are seeing steady growth,” said Joanie Ruge, senior vice president of Adecco. “What we’ve heard is happening is that some companies have cut their staff so much that they now don’t have enough talent and people,” leading companies to turn to recruiting agencies for temp workers, she said.
The sectors that are hiring include health care, engineering, accounting, finance and to a smaller degree, manufacturing.
“Manufacturing is still slow. Jobs are not coming as fast,” she added.
Ruge expects permanent hiring could begin in the next “three to six months,” around the end of the first quarter or the beginning of the second.
A new survey released on Tuesday by Manpower, supports that, showing that there will be a moderate increase in hiring during the beginning of 2010.
Twelve percent of the more than 28,000 employers surveyed said they plan to increase staff levels in the first quarter, but another 12 percent also said they would decrease their staff. When seasonally adjusted, the net employment outlook becomes up 6 percent.
Meanwhile 73 percent said they would keep staffing levels the same, the highest number on record since the company began the survey in 1962. (The Manpower survey doesn’t differentiate between whether those new hires would be for temp or permanent jobs.)
As for the unemployed, getting a temp position could mean getting a foot in the door.
"Companies will look to those people to fill a permanent position first," adds Ruge.
(Editor's Note: Neither analyst Jeff Silber nor members of his family own stock in the companies mentioned in this story, and his employer, BMO Capital Markets, has done business with them.)