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- iHaveNet.com: Economy
by Ben Baden
Since the end of the recession, 54 percent of new jobs created have been temp work
The fastest-growing sector of the labor market since the end of the recession says a lot about the type of sluggish recovery the economy is experiencing.
Since June 2009, the temporary help services industry, which is comprised of staffing companies and temporary agencies, has added 557,000 jobs, or 54 percent of all jobs created across all sectors of the economy, according to the
Coming out a recession, employers typically hire temporary employees first, then begin bringing on full-time staff. This time around was no different. In September 2009, the staffing industry began adding jobs. Six months later, in March 2010, the private sector followed suit. But since then, job growth has been anemic, and the transition to permanent payrolls has been painfully slow. Private employers have only added about 2.6 million jobs, and the unemployment rate still rests at 9 percent. Cautious employers seem determined to add mostly temporary employees -- or no employees at all -- to their payrolls.
"If you look at the bigger picture...we're moving toward a new reality in the way we work," says Kathy Kane, a senior vice president at staffing firm
Employers view the workforce as more flexible than in the past. It's expensive to lay off full-time employees during a slowdown then hire new ones when business recovers. So rather than take on a new batch of full-time employees, companies have opted to hire on a contingent basis. "Companies are migrating their workforce from 100 percent core down to 80 or 90 percent core, and then leaving 10 to 20 percent of their workforce as what I would call 'perpetual contractors' or 'definite temps' with no expectation to ever move those people back to their core workforce," says David Lewis, executive director of franchising at Oklahoma City-based staffing firm Express Employment Professionals.
In the past, the bulk of hiring in the temporary services industry was commercial hiring, in relatively low-paying industries like construction and manufacturing. But a fundamental shift is taking place, labor market experts say, because temporary jobs are popping up across all sectors of the economy. Even employers in high-skilled, well-paying industries such as engineering, information technology, accounting, and healthcare are taking on more contract workers.
"What we generally estimate, in terms of revenues or sales for the staffing industry as a whole, more than half of it now comes from professional, technical, and other high-skill, high-wage occupations," says Steven Berchem, vice president at the
This shift to a larger contingent workforce is expected to continue.
In a June survey issued by the consulting firm
For the 14 million unemployed, temp work may provide a new path to a permanent job. In this slow recovery, many employers are choosing to hire new employees on a part-time basis before extending a permanent offer -- whether it's entry-level positions for workers who are fresh out of college or higher-level positions for workers who have been in the labor force for many years. "More and more staffing clients are saying they're turning to staffing firms as a way to find permanent help or permanent workers, so it's a way for both the employee and a business to evaluate each other to see if it's a good fit," says Berchem.
Barbara Saunders worked in the marketing department of a Fortune 500 company for six years and was laid off in 2008. To make up for lost income, the now 52-year-old marketing specialist took on some smaller consulting jobs, until last year when she decided it was time to look for a more permanent position. "I wasn't receiving the compensation I used to get," she says. In July, staffing firm
Long-term job stability may no longer be a reality for many workers, but that's not necessarily a bad thing. With a series of different assignments comes more flexibility, Berchem says, and many employees, especially from younger generations, prefer that. In a past ASA survey, 90 percent of respondents said they were satisfied with their staffing firm and various aspects of their jobs, and 88 percent said they would refer a friend or relative to work as a temporary or contract employee.
During his 16-year professional career, Eyon Karnoff has bounced back and forth between contract work and full-time employment. "I've been full-time for almost five of the 16 years at different stints, and each time I go back to consulting," Karnoff says. The 39-year-old IT management consultant is currently employed through staffing firm
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Larger Temporary Workforce Could Be New Normal
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Larger Temporary Workforce Could Be New Normal