The hiring of temporary workers is a leading indicator of future job growth, and new employment numbers suggest the U.S. economy may be on the road to recovery.
Last month, temporary employment rose 2.5%, seasonally adjusted, according to the Labor Department’s employment report. “As employers feel more secure, they bring back furloughed workers, lengthen the hours for existing workers and then bring on temporary staffers,” says Richard Wahlquist, president and chief executive officer of the Alexandria, Va.-based American Staffing Association. “These are the classic early stage of recovery.” Interim job creation typically precedes standard job growth by three to six months, says Mr. Wahlquist.
It’s also common for employers to convert temporary hires into staff employees, says Brett Good, district president of Robert Half International, a staffing company based in Menlo Park, Calif.
“Six to nine months ago, the jobs available were truly temporary,” Mr. Good says. “Now people are being brought in on a project basis, and employers are indicating that these positions will be rolled over into permanent payroll once the economy stabilizes.”
After cutting so deeply into infrastructure during the recession, companies are at a breaking point, adds Mr. Good. They simply can’t increase productivity without adding to the head count, he says.
Growing sectors include financial services, manufacturing and information technology, says William Grubbs, executive vice president and chief operating officer of Spherion, a staffing firm based in Fort Lauderdale, Fl. “Moving forward, we’re also going to see even more growth in the more high-end professional sectors,” he adds.
Meanwhile, with 15 million people out of work, competition for even temporary positions will be stiff, warns Mr. Wahlquist. “Companies will see talent pools as deep and rich as they’ve ever been,” he says. “But the job market will continue to seem brutal.”