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Continued: Temporary jobs becoming a permanent fixture in US as more employers seek 'just-in-time' labor

  • Article by: CHRISTOPHER S. RUGABER , AP Economics Writer
  • Last update: July 7, 2013 - 9:50 AM

"You have your just-in-time workforce," Houseman says. "You only pay them when you need them."

This marks a shift from what economists used to call "labor hoarding": Companies typically retained most of their staff throughout recessions, hoping to ride out the downturn.

"We clearly don't have that anymore," says Sylvia Allegretto, an economist at the University of California, Berkeley.

The result is that temps and contract workers have become fixtures at large companies. Business executives say they help their companies stay competitive. They also argue that temp work can provide valuable experience.

"It opens more doors for people to enter the labor market," says Jeff Joerres, CEO of ManpowerGroup, a workplace staffing firm.

But Houseman's research has found that even when jobs are classified as "temp to permanent," only 27 percent of such assignments lead to permanent positions.

About one-third of temporary workers work in manufacturing. Temps can be found on production lines, repairing machinery and stocking goods in warehouses. About a fifth are administrative.

Shortages of doctors and nurses have led some hospitals to turn to temp agencies. Staffing Industry Analysts forecasts that spending on temporary doctors will grow 10 percent this year and next.

Some school districts now turn to temp firms for substitute teachers. This lets them avoid providing retirement benefits, which union contracts might otherwise require.

Manufacturing unions have pushed back against the trend, with limited success.

"We run into this across all the various industries where we represent people," says Tony Montana, a spokesman for the USW, which represents workers in the steel, paper, and energy industries.

Todd Miller, CEO of software company Gwabbit in Carmel Valley, Calif., says about a third of his 20 employees are temporary. An additional one-third are contractors.

He says he's had no trouble filling such positions. People are "willing to entertain employment possibilities that they would not have six or seven years ago," Miller says.

If the economy were to accelerate, Miller says he might hire more permanent staff. But "I don't have tremendous confidence in this economy."

Only the health care and leisure and hospitality sectors have added more jobs during the recovery. But each is roughly five times as large as the temp industry. The proportion of all jobs in the temp industry is about 2 percent, just below a record set in 2000.

Temp hiring has accelerated even though the economy has 2.4 million fewer jobs than it did five years ago. Temp jobs made up about 10 percent of jobs lost to the recession. Yet they've made up nearly 20 percent of the jobs gained since the recession ended.

A survey of companies with more than 1,000 employees by Staffing Industry Analysts found they expect 18 percent of their workforces to be made up of temps, freelancers or contract workers this year, up from 16 percent in 2012.

Shane Watson, who in November lost a job providing tech support for Blackberry maker Research In Motion, says contract work has helped him recover. He's on his third such position. Still, Watson, 36, misses the security of a permanent job.

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