Beyond the Great Recession

Temp work fueling a slow jobs recovery in Minnesota

  • Article by: DEE DEPASS , Star Tribune
  • Updated: March 8, 2011 - 10:16 AM

"It's starting to really pick up," said a worker at a Minneapolis temp agency as more temporary gigs become permanent jobs. Still, the pace of gains concerns economists.

Millie Eidsvaag has weathered three layoffs and a host of hard times since 2007.

Temp jobs lasted only two or three weeks. State computer glitches delayed her unemployment checks. Desperate, she sold her blood plasma to buy groceries for her kids.

Eidsvaag needed a job that would last. Now she's found one. In August, OfficeTeam found her temporary work at the Talmud Torah of Minneapolis. In January, the center asked her to stay on. As a project assistant in the after-school program, she makes $14.50 an hour, up from $11 as a temp. And she gets benefits.

"It just feels good,'' she said.

Eidsvaag's journey from temp to permanent hire -- called a "conversion'' in the staffing industry -- is becoming increasingly common, another sign that the nation's long-suffering jobs economy is recovering.

"It's starting to really pick up," said Vicki Brown, a saleswoman for Jeane Thorne Inc. in Minneapolis. "If you talk to anybody in the temporary staffing business, they would all say that. Companies are starting to realize that they have done without for so long that they can't go on like this."

Officials at Robert Half International agree. As the owner of Accounttemps and the OfficeTeam agency that placed Eidsvaag, Robert Half's "temp hiring numbers are up ... and our permanent placement hires are up. But our conversion numbers are through the roof," said Robert Half district director Jim Kwapick. "We believe we will see a doubling of temp-to-hire [fees] in 2011."

Temporary gigs offer a taste of hope. And lately, there's a little more hope to go around.

Home Depot just announced it's hiring 60,000 "seasonal part-time associates" for its spring season, including 700 in the Twin Cities. Bremer Bank in St. Paul recently hired a slew of consultants to oversee information technology updates. Wells Fargo Bank ushered temps into its mortgage division. And manufacturers statewide are calling back former workers for short stays to boost low inventories.

According to new data from the Minnesota Department of Employment and Economic Development, temporary jobs in the state rose to an average 53,837 in the third quarter of 2010, up from 43,262 positions in the first quarter and 42,829 in 2009. Temp hiring in Minnesota most recently peaked in 2007 at 57,414 before plunging as the recession took hold.

Nationally, temporary employment peaked in December 2006 at 2.6 million positions. It plummeted to 1.7 million in 2009, but is now rebounding sharply.

Economic research firm IHS Global Insight predicts that temp jobs will spike to 3.1 million workers by the end of 2011. It's already on its way. It rose to 2.89 million in February, according to the most recent report from the U.S. Bureau of Labor Statistics.

The nation saw total employment swell by 192,000 jobs last month and temporary employment contributed 15 percent of the gains. While welcome, the bump in temporary hiring barely dents long-term jobless situations. On Friday the Labor Department reported that in February there were still 5.993 million workers nationwide who have been unemployed for more than 27 weeks and still want a job.

Still, the uptick in temp hiring is an indicator that the economic recovery may be firming, said Minnesota Labor Market economist Steve Hine.

Edward Nyanwleh certainly hopes so. Nyanwleh struggled to find work after getting laid off from his computer assembly job 19 months ago. "It was tough. I sent applications all around. I thought I would get a job immediately ... but the economy really had an impact," said the father of three. Five months ago, temp agency Vision Staffing hired him and sent him to Lundell Manufacturing in Plymouth, where he makes $10 an hour making foam and insulation products.

"It's helping me, but it's not able to cover everything,'' he said.

Wan Tansatit was laid off from Verizon a little over a year ago and moved in with a friend last summer because she could no longer afford her rent. She's been surviving on unemployment and temp jobs ever since.

Her current assignment through the Jeane Thorne agency is at St. Paul College, where she works as an administrative assistant. The job pays $18 an hour and is helping to pay her COBRA health insurance bill. She's covering for a worker out on maternity leave, but Tansatit hopes to be able to stay. Officials at Jeane Thorne said they know that's her goal and will help make that a reality if possible.

Minnesota's auto dealers are bracing for the "Auto Show bounce ... and are hiring," said Scott Lambert, spokesman for the Minnesota Auto Dealers Association. With new workers on board, "dealers will be ready for March and April, our big season." Dealers hope car sales will be robust enough to keep the new talent. If not, some will be let go or see hours chopped, Lambert said. That uncertainty means not everyone is declaring victory on the job front.

"Coming out of a recession, temporary jobs appear first," said University of Maryland economics professor Peter Morici. "Some 19 months into the expansion, the pace of permanent, non-government subsidized jobs creation should be accelerating," he said. Instead it's creeping.

Weary job seekers such as Helen Kirschstein know the feeling.. "I put out easily 700 applications over the last two years. I worked at it hard," but no one was hiring managers, said the Eden Prairie resident. Kirschstein lost her vice president's post in 2008 at the manufacturing firm where she'd worked for 20 years.

Severance and unemployment carried her for two years, along with self-employment stints making blankets or freelance writing. In November, Kirschstein's luck changed. She was hired as a project manager for an insurance administration firm. The contract was to expire in February. It was recently extended through March.

"Now, I don't feel as constrained to watch every single thing that I do [moneywise]," she said. "I just have a more positive outlook about things in general. Waking up and going to work is great. I love to be busy."

In the Twin Cities, "hot industries" seeing a burst in contract job placements include financial services, health care, retailers, nonprofits and professional services.

Just ask Joan Buchanan, talent management manager for Plymouth-based Trusight (formerly Employers Association of Minn). Trusight, a human resources and training consulting firm, places temporary HR staffers in 1,200 member companies. Right now, retailers and service companies are leading the call for temporary HR workers, with some paying wages of $50,000 to $100,000 on an annualized basis.

"HR people are starting to get hired back," Buchanan said. "We are trying to be cautiously optimistic rather than just saying, 'Woo hoo!'''

Dee DePass • 612-673-7725

  • about this series

  • This occasional Star Tribune series focuses on how Minnesotans are adapting to a vastly changed economic landscape, even as the recession fades into the past.
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