Temp Job Surge Is Fueling Optimism

After two years of false starts, California temporary staffing agencies are seeing a surge in hiring. And economists say that could bode well for the state’s overall job picture.

In past business cycles, the temporary help industry has been a bellwether of the economy and the labor market. Temps were the first fired when things got tough and the first hired in an expansion when employers saw an uptick in orders.

The state’s jobs report Friday showed that the industry accounted for a big chunk of the net 8,800 jobs added statewide last month. Employment agency payrolls in February were up 52,100 from a year earlier, an increase of nearly 13%.

“It’s a good sign,” said Howard Roth, chief economist at the California Department of Finance.

Joe Mackey, president of XL Staffing in San Diego, said his business was up about 40% from last year, with much of the increase in hospitality and tourism. Manufacturing demand has picked up as well, he said.

Mackey, who has been in the business since 1981, said the recovery had been “herky-jerky” for the last two years.

“In the past, once we turned the corner, it was a straight shot up for the next few quarters,” he said. “That hasn’t been the case with this recovery. It’s been stop-and-go until just recently.”

That’s putting it mildly. The industry has been in the doldrums since the recession began three years ago, driving about 60% of staffing agencies in the state out of business, said Jeff Hindman, president of California Staffing Professionals, a trade association.

Moreover, some economists caution that during this recovery, temp jobs have been slow to turn into permanent positions.

At this point in other economic cycles, “we saw much more rebound in our business,” said Rich Cutshall, Western region vice president for Manpower Inc. “We have not seen that profound kind of jump this time.”

“It’s a changed economy,” he said. “In the ‘90s, you did not have the Internet or the global competition.

“Many of our client companies now have their backs to the wall in terms of the competition they face,” he added. “It seems as though there is much more of a push to defer the reintroduction of people into their organizations.”

Agencies that place a range of temporary workers, from factory hands to doctors’ receptionists, agreed that a real jobs recovery may be underway. But executives are still nervous.

“We’re ahead of last year in billable hours. We seem to be doing very well, picking up new customers,” said Sue Foigelman, who handles Manpower’s operations in Los Angeles. “Of course, I’m touching wood as I say this. It is still a little patchy.”

Foigelman said she had seen growing demand for production workers in apparel and food manufacturing, health services and financial services. The technology sector is still hobbled, she said.

Diane Skullr, president of DEC Healthcare Personnel in Fullerton, said hiring was up about 20% from last year.

“2004 is definitely looking much better than last year,” said Skullr, who places administrative workers in private medical practices. “Until now, it’s been a jobless recovery.”