Temp Jobs Dip In August, But Still Growing Fast

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Sep 7, 2012

No matter how you look at it, the number of temps on payrolls across the country is rising.

Job numbers from the Bureau of Labor Statistics this morning show a slight dip in the temp workforce in August; it was down 4,900 on a seasonally adjusted basis. Without the adjustments, the number of working temps rose 49,000. Either way, though, the size of the temp workforce grew at a faster rate in the last year than did all other employment.

Between August 2011 and last month, the number of employed persons in the U.S. grew by 1.4%. The temp workforce grew by 8.9%. Both numbers are seasonally adjusted.

In the broader  “employment services” category, which includes staffing, placement agencies, executive search, and PEOs, employment increased by6,700 jobs. The category now counts 3.2 million workers, of which 2.5 million are employed by temp services.

Overall, the economy added 96,000 jobs in August; far fewer jobs than the 120,000 to 140,000 economists on average were expecting. The unemployment rate declines to 8.1% from 8.3% due entirely to the number of people who simply gave up trying to find a job.

“Staffing and recruiting firms generally continued to report moderate growth as we moved into September,” says Richard Wahlquist, president and CEO of the American Staffing Association. “However, clients continue to be extremely cautious about adding personnel.”

That may be true for adding permanent staff, but temp hiring accelerated significantly this year over last. For the first eight months of this year, the temp workforce grew by an average of 16,000 workers a month. Last year, the average was 11,000.

What’s driving this growth is certainly the cautiousness of employers. While they may be reluctant to bring on permanent staff, sales and workloads are increasing, so they bring on temps. As the economy continues to improve, even if slowly, some of the temporary workers will convert to full-time, permanent. That’s been the historic pattern.

Now, Staffing Industry Analysts says that while that’s still true, new corporate thinking has caused a strategic shift in workforce makeup that will persist even after the economy shifts into a higher gear.

“The contingent workforce is now included in core strategic planning and utilized in a critical way to flex talent muscle,” writes Adrianne Nelson, director of SIA’s global services. “The recession made visible all the advantages of contingent labor. And today there is a recognition that talent comes in different packages, flexible and traditional.”

That explains why a SIA survey of buyers of contingent staffing found their workforce composition to be 16% temp, a one point rise from last year’s 15%, and a big jump from the 11% in 2005.

Nolan advises HR professionals and others to expect a future workforce mix that will include a substantial number of contingent workers.  The time isn’t far off where “contingent workforce management (CWM) and strategic workforce planning (SWP) (will) merge to form a total talent management solution.”

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