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CEO Blog: Temporary Jobs Will Begin the Job Boom

Tig Gilliam, North American CEO, Adecco Group

The continuing rise in temporary employment since this summer is perhaps the single best indicator in today’s economic landscape that an improvement to the jobs crisis will come.

For six straight months temporary jobs have increased and this growing trend points to the fact that companies are looking for more resources and adding capacity back into their workforce.

And that’s good news for the larger job market.

As temporary and contract jobs pick up, more and more of them last for a month, or a few months, or a year, and finally more and more of them are becoming permanent. And then the shift in the employment picture we’re all so impatiently awaiting truly locks in.

There is, of course, a long way to go.

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To gain back the number of jobs already lost, the US economy will have to create hundreds of thousands of full-time jobs every month.

That, clearly, is still a glimmer on the horizon.

In January, the economy lost 20,000 jobs, bringing the unemployment rate down to 9.7 percent.

As the job market begins to recover, we should also expect the unemployment number to fluctuate. This will be the result of previously discouraged job seekers reentering the labor market, likely causing some bumps on the road to a more stable unemployment rate.

Small firms, in particular, remain reluctant to hire, whether temporarily or permanently. Still, steadily, month by month, week by week, workers are now being hired, even if for a limited period of time.

That’s good news in the near term and a harbinger of better days in the long term.

Temporary hiring happens first in industrial skills--in manufacturing, logistics, and transportation—followed by an uptick in demand for retail, and in the professional sector, finance, IT, engineering, and other scientific skills. All of that, to varying degrees, is happening. Many employers now say they may have cut too deeply at the height of the crisis. Still, in re-hiring now, amid continuing uncertainty, employers are cautious, frequently preferring the flexible, temporary option. Clients tell us they never thought they’d have to reduce their staffing so dramatically in the first place, by 25 percent or more in many cases, and now they don’t want to have to do it again, driving home the appeal of temporary and contract workers - not only for the short-term, but also longer term as the full economic recovery takes hold.

What we’re hearing from many of our 145,000 clients around the world at Adecco Groupis that this time around, they are committed to learning from the lessons forced upon them during this most recent recession. Never again do they want to be faced with the same costly and inefficient cycle that swings from staff reductions to rehiring efforts. Instead, they are looking for the sort of on-demand workforce model that flexes not with the economic environment, but instead, as their business requires.

This marks a real shift in perspective from the mindset that a healthy economy is one where permanent jobs are at a premium to a new way of thinking – that a healthy organization is one where both the employer and employee have the flexibility to grow and evolve as the business need and/or their career goals and aspirations change. That temporary employment isn’t just about testing the waters for permanent jobs, but instead, about building an organization and a career path that provides both parties with the right level of autonomy, flexibility and fulfillment to be successful in the long-term.

In the end, a large component of any economic revival is both in the hard numbers and in the less quantifiable psychology of employers and employees. It is about how people are feeling and how much they trust the recovery. Coming back from an economic shock as severe as what we’ve experienced is a complex process, but at the heart of it is simply a need for companies to feel confident enough to get back into the job market. At Adecco, we are seeing that process play out in the temporary jobs market.

That’s good news, and we strongly believe this is a sign that should help boost confidence for all of us.

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Tig Gilliam is the North American CEO of Adecco Group, the world’s largest recruitment and workforce solutions provider.