August 01, 2012

Why is the Rise in Temps Not Bringing Cheer?

Temporary workforce numbers have been rising steadily. Of 80,000 jobs added in June 2012, nearly 25,000 were in the temporary help services category. This is seen clearly from the graph, from 2009-2012, where temporary help services grew at a steeper pace compared to overall growth in employment. (Ref graph: Temporary workforce: Sharp rise, slow conversion). In July the number was much lower at 14,100 of total 163,000 new job additions. But the conversion from temporary jobholders to permanent jobs has slowed down from 45% last year to 30% this year as per the CEO of Manpower, Jeff Joerres.

What does it mean?

Traditionally, hiring of temporary workers has been the driving force for rise in permanent staff, but the economy is in wait and watch mode. Note from the graph that temporary workforce is a leading indicator of trends in the overall job market, as the rise and fall of the Temporary Help services curve are nearly a quarter ahead of overall employment re?ecting same trend. Despite nearly a third of new jobs added in June being temporary jobs, the cheer is missing, as conversion to permanent staff is much slower. Temporary staf?ng is up nearly 20% since June 2010 but total payroll merely 2.3%