Staffing and recruiting trends show that temporary hiring is here to stay as the economy slowly improves.

In an article from Recruter.com, a Manpower study reveals that between 2010 and 2012, the use of contingency workersincreased from 1.47% of the US workforce to 1.88% this year,adding over 625,000 workers to the workforce. That’s only part of the picture — research also indicates that 58% of companies plan to use more temporary employees over the next five years. (Temp Trends around the World)

“Bureau of Labor Statistics (BLS) reported that the Temporary Help Services accounted for 25,000 jobs being added to the US economy during June. This represents about 31% of all job growth last month” – Wanted Analytics.

Temp Labor: A Crucial Solution to a Turbulent Labor Market

Temporary labor brings clear benefits to employers. Wary businesses can bring in staff in anticipation of growth or to suit fluctuating demand. It allows for companies to have more flexibility in this unstable economy; providing room to onboard more employees for project based assignments,  fluctuating project flow more easily and quickly.

Temporary workers can be idyllic compared to outside consulting firms for companies who have projects that demand a specific skill set. Current staff is able to quickly and effectively communicate to a worker who is in-house, streamlining the project communication and processes.

According to Wanted Analytics, office and support, healthcare, technical, and engineering are among the fields with the highest demand by temporary services companies. Interestingly, production occupations, such as Machinists, are in high-demand by temporary services as well. The number of ads for within production has increased 31% compared to June 2011.

Staffing Agency’s Revenue Increases

As the demand for temporary work increases, so does the need for third party staffing agencies. Even in this grim economic environment, staffing agencies across the country are experiencing a raise in revenue and profits.

“Total revenue from continuing operations at Kforce will rise about 1 percent to $276.6 million in the period ended June 30 from a year ago, based on the consensus estimate of analysts surveyed by Bloomberg.” – Bloomberg.

Staffing Industry Analysts announced that second-quarter revenue at P2P Staffing Corp. was $19.8 million. “Second-quarter revenue at P2P Staffing Corp. rose approximately 46 percent to $19.8 million from revenue of $13.6 million in the second quarter of the previous year. P2P forecast revenue of $75 million to $80 million in 2012, up from $56 million in 2011. Revenue growth is all organic.”

Signs of an Economic Recovery

Often a pickup in temp jobs is a positive sign that employers are cautiously optimistic. When business initially improves, companies may add short-term staff. When firms are confident that the labor market will strengthen, those short-term positions will ultimately become permanent.

According to the BLS, there are now 2.491 million temp workers. That’s an 8.5% increase over May 2011. Usually, in times of a recession, temporary positions are the first to go.

It’s not safe to presume that temporary will become new permanent, but it is a trend that should be noted. While the economy remains dim, companies are steering towards the cautious side. They are re-shifting their hiring tactics to temporary work to reduce overhead costs, as well as prevent negative corporate morale they face if the company has to implement major lay-offs to make ends meet.  In return, staffing agencies nationally are benefitting from this trend, increasing revenue and making placements. The job market may not look as optimistic as we all hope; temporary positions may serve as a light at the end of a long, dark tunnel.

Megan Curth is the Marketing Coordinator of Automated Business Designs, Inc., software developer of Ultra-Staff software for the staffing and direct hire industry. Ultra-Staff is a staffing software business solution with components for front office, back office and the web. Megan’s email address is megan.curth@abd.net or for more information on Ultra-Staff go to www.abd.net