Forecast: Staffing Jobs to Grow By 135k This Quarter

Palmer 2015Industry consultant G.Palmer & Associates has a bold, and aggressive  forecast for the staffing industry: temp help in this first quarter will surge by 10.5%.

“Our forecast for the 2015 first quarter follows recent trends demonstrating growth and indicating another increase in demand for temporary workers, marking the 20th consecutive quarter of year-over-year increases,” said Greg Palmer, founder and managing director of of the staffing industry consultancy.

The predicted year-over-year growth is a big percentage, even for as fast a growing jobs sector as staffing. But it’s not the first big forecast the Newport Beach, Calif. firm has made. In 2010 Palmer predicted demand for temp workers would increase 20.9% in the last quarter of the year. The prediction was off, but only some. Temp growth that quarter grew 19.2%.

What makes this quarter’s forecast so audacious is that temp agencies have added jobs so rapidly that to achieve the predicted growth rate the industry will have to add about 135,000 jobs during the quarter. That’s an astonishing number; twice what the industry adds in a typical quarter. In the best quarter of the last four years — the fourth quarter of 2013 — staffing grew by 70,700 jobs.

The temptation is to believe the forecast is just too aggressive. A number of factors suggest it could be right.

First, the Palmer firm’s track record over the last several years has been almost spot on. There have been misses of course. Generally, though, the forecast falls within a 5-10% — and often less — range of being on the money.

Then there’s the forthcoming adjustment to the government’s data. Each month the Bureau of Labor Statistics, which reports the official employment counts, adjusts its initial counts for the previous two months. Once a year the BLS recomputes all its previously reported number for the previous year. That will occur with the report to be issued on February 6th.

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Consequently, the number of new jobs predicted by the Palmer Forecast might be less (or possibly more) than the projected 135,000. Much depends on what the BLS temp numbers turn out to be.

No matter what the final number turns out to be, there’s no denying temp sector hiring has been a critical driver of the nation’s overall job growth.

“It is important to remember that temp help created approximately 10.0% of all new jobs reported since the economic recovery began, while representing only about 2.0% of the total labor market,” Palmer said.

“One of the most revealing indicators to watch during this uneven recovery relative to temp help growth,” he went on to say, “Is the temp help penetration rate, which is significant because it measures temp help as a percentage of total employment.  In December, the penetration rate remained at an all-time high of 2.10% of the total labor market from a low of 1.34% in June 2009.”

John Zappe is the editor of and a contributing editor of John was a newspaper reporter and editor until his geek gene lead him to launch his first website in 1994. He developed and managed online newspaper employment sites and sold advertising services to recruiters and employers. Before joining ERE Media in 2006, John was a senior consultant and analyst with Advanced Interactive Media and previously was Vice President of Digital Media for the Los Angeles Newspaper Group.

Besides writing for ERE, John consults with staffing firms and employment agencies, providing content and managing their social media programs. He also works with organizations and businesses to assist with audience development and marketing. In his spare time  he can be found hiking in the California mountains or competing in canine agility and obedience competitions.

You can contact him here.