Temp hiring has become more common

Pasadena Star News

By: Cynthia Kurtz

Posted: 10/15/2014 

Often we think of temporary employees as the folks who operate a cash register or answer the phone. But that's not the case any longer. Today, 42 percent of temporary workers are in light manufacturing and warehousing. 

Temporary hiring has become a significant part of sectors where it was seldom used in the past. A recent study released by the U.S. Bureau of Labor Statistics stated that 233,000 of the 285,000 jobs created in business and professional services in the last year were temporary positions. This includes lawyers, engineers, computer programmers, and marketing professionals.

School districts are using temporary staffing agencies for substitute teachers.  Even hospitals have turned to temp agencies for doctors and nurses.

The number of temporary workers is higher than it has been in decades. According to the American Staffing Association (ASA), a non-profit organization representing staffing and recruiting firms, there were 2.92 million temporary employees in September 2014, an increase of 8.61 percent from just a year ago.

In 2013, industry experts estimated that temporary jobs made up 10 percent of the positions lost during the recession and 20 percent of the positions added since.

High levels of temporary employee hiring are not unusual following periods of business contractions. When businesses are forced to reduce their workforces, contract and temporary employees are the first to be let go.  When the recovery begins, though, businesses are often still hesitant to commit to permanent hiring. Temporary employees provide more flexibility should a recovery begin to lag.

The cost of permanent long-term employees has increased as retirement, healthcare, and other benefit costs have gone up. Many businesses believe they cannot compete in today's global economy unless they carefully control the size of both inventories and workforce. Upjohn Institute of Employment economist Susan Houseman explains, "You have your just-in-time workforce. You only pay them when you need them."

Getting people back to work and reducing the unemployment rate is paramount on everyone's mind. Temporary jobs can be the way to learn new skills and transition into permanent employment. A survey done by ASA showed that 90 percent of temporary employees think the positions make them more employable and 49 percent think it is an entry to a permanent position.

But the dramatic increase in temporary positions does have downsides.  Wages are often lower. Temporary employees typically get less training which studies show increases the likelihood of accidents. Most temporary positions don't have benefits.

There is no way to be certain if the increase in temporary employment is a long-term trend or a reaction to the slow recovery. But many CEOs agree that it will take a much more robust economy and confidence in its ability to sustain growth before they will consider more permanent hiring.