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Is the Temporary Workforce Becoming the New Normal in Employment?

By all indications, one might believe that the temporary workforce can easily become the new normal in U.S employment opportunities. During the Great Recession, the U.S. lost 7.9 million jobs across different industries. According to the Bureau of Labor Statistics, the staffing and recruiting industry had the highest level of job creation than any other industry.

However, the temporary workforce accounts for less than two percent of employment with over 786,000 jobs added to payrolls between June 2009 and July 2012. At the same time, the “robust” job growth of many U.S. businesses that do not use staffing agencies is due to the hiring of part-time workers. So far this year, three-fourths of the one million new hires work part-time for low wages.

Technically, temporary workers work for different companies but are actually employed by a staffing agency. They are not classified as part-time workers because they usually have a 40-hour work week, which is considered full-time employment. The downside is that the “temporary” position could end sooner than part-time employment.

Nevertheless, most companies look to temporary staffing agencies to fill quick needs. They do not absorb the cost of recruiting, payroll taxes and other expenses of having full-time workers. So, does this really mean that a temporary workforce has become the new normal in U.S. employment?

Growth in the Temporary Staffing Industry

The U.S. staffing industry has a history of growth after the 1991 and 2001 recessions, but has experienced the most growth after the Great Recession. According to BLS, there was a 45 percent increase in the temporary help services industry since 2009. Further, the industry continues to see growth numbers.

In March 2013, temporary employment increased 20,300 jobs, with 22,000 jobs added for the previous month. Even as temporary staffing experiences some job growth, the industry has yet to fully recover from huge job losses.

What the New Normal Employment Landscape Looks Like

In most cases, the staffing industry has led the way towards job growth. Employers are slow to transition temporary help to permanent employment, in part due to a slow recovery. Generally, employers look to fill positions with temporary employees at the end of a recession before hiring a full-time staff.

While most employers are hiring part-time workers, the staffing industry began adding jobs in September 2009, three months after the recession officially ended. Nearly 2.7 million temporary employees are working for companies across all economic sectors.

Six months after the staffing industry began to rebound, private sector employers started hiring full-time workers. However, since 2010, the overall job growth has been anemic for permanent workers.

What is Driving the Trend?

Caution is keeping temporary help in demand as the fastest sector in the labor market. For many employers, a temporary workforce is the best risk-management strategy until the economy becomes stable. With a flexible workforce, they can avoid the expense of full-time employee layoffs when the economy slows.

The lingering air of uncertainty in the economy is extending to sectors that rarely used temporary services in the past. Professional services in the medical field and information technology are among the sectors trending toward more temporary workers.

Some economists believe that economic issues are not the only reasons for the permanent fixture of a temporary workforce. The lack of a committed relationship between the employee and employer is contributing to this trend. Both sides appreciate to flexibility of a temporary work schedule.

This can easily become a longstanding trend as more employers look to temporary staffing agencies to fill employment needs.