Temps permanent part of landscape
Demand for temporary workers has grown significantly this decade and is expected to continue, despite the nation's slumping economy.
"Because of the uncertainty of the economy, it is an incentive for businesses to use temporary workers," said Paul Grimes, head of the finance and economics department at Mississippi State University's business school.
Companies can add or deduct workers as needed. Plus they can save money by limiting benefits, such as health insurance, associated with hiring full-time employees, Grimes said.
The American Staffing Association, a trade group for employment agencies, reported 2.96 million temporary and contract workers were employed daily in 2006, the latest data available. The number was a record for the industry, but the growth rate was the lowest in 15 years, ASA reports.
"There's a nationwide slowing down of the growth rate in the staffing industry that parallels the general economy," said Jeff Burnett, president and CEO of Labor Finders International, a leading job-placement service based in Palm Beach Gardens, Fla.
Burnett said the national downturn in the construction industry has slowed his business. Construction, he said, represents "a fair piece of our business," especially in Labor Finders' home state. The Sunshine State symbolizes mortgage fallout, with one of the highest foreclosures rates in the country.
Burnett isn't sure if the country is in a recession, but he's certain Labor Finders has to shift its strategy to stay competitive.
The company has begun emphasizing placements in warehousing, manufacturing and assembly sectors to allow the company to diversify while still maintaining its connection to the blue-collar trades Labor Finders specializes in, Burnett said.
In contrast, Capitol Staffing, a Jackson, Miss., job placement agency, reports a 118 percent increase in placements in January compared with the previous year. The agency focuses on placements in administrative, sales, accounting, information technology and medical fields.
"We were in and out of recessions before we ever realized we were in one," said Carolyn Harrison, Capitol Staffing's president. "The truth is, companies are still hiring."
Temporary work may attract people with family obligations who do not want a full-time position, or people who hold multiple jobs, Grimes said.
The insurance and benefits that employment agencies offer their temporary workers in the current economic climate varies.
Harrison said some businesses are being choked by the cost of insurance and are limiting what they'll offer new hires, while others remain willing to provide their traditional coverage plans.
Other companies have been able to keep business steady as the economy around them shifts.
Elite Staffing USA's business has been status quo in recent months because the Chicago-based company has traditionally shied away from placing workers in construction jobs due to the high liability risk in that accident-prone field, said its chief financial officer, Ted Rigas.
Also, Elite has diversified where it sends its workers, Rigas said: "We're doing a lot more work in food, contract packaging ... and less in manufacturing."
Burnett advised job-placement companies that are negatively impacted by the economy to look for opportunity amid the overall landscape.
Along with diversification, he said, staffing companies should emphasize their capabilities to employers unwilling to make the investment of hiring more full-time workers.
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