Temp agency hires at an all-time high
Temporary agencies service employment is at an all-time high for the eighth consecutive month, but the industry has also doubled since 1995, said Mark Marcon, senior research analyst with Milwaukee-based wealth management firmRobert W. Baird & Co. Inc.
The staffing industry in the U.S. has grown from $55 billion in 1995 to $120 billion in 2013. In June, temporary help services added 10,100 jobs in June in the U.S., an 8.1 percent increase year over year, according to Baird.
“Having a job through a temporary agency was viewed as a sub-optimal type of work, but broadly speaking&hellip it’s increasing in recognition as a social good rather than social negative and it’s a good way to get people from a state of unemployment to employment,” Marcon said.
Companies prefer hiring through temporary agencies because it gives them more flexibility, and helps them deal with “uncertain times and uncertain regulations,” Marcon said.
“Part of the drive behind this increased usage is that companies are facing more regulatory burdens, like the Affordable Care Act – it’s not the only example – but the ACA is one area where there is uncertainty in what employers are responsible for,” Marcon said. “By hiring through temporary agencies, they are offloading that responsibility and putting it onto the temp agency.”
And with just about any job, there is a temporary staffing agency service – from doctors and lawyers to assembly workers.
Amazon uses temporary workers to fill its seasonal surge at Christmas time. Milwaukee-based Harley-Davidson Inc. uses a flexible workforce in its plants to get motorcycles made faster and just in time to the consumer. Quad/Graphics Inc. in Sussex uses temporary workers to fill their production level jobs.
“It gives them the flexibility to adjust their staffing levels to keep up with demand,” Marcon said. “Most companies are trying to become as lean as possible, so they are bringing in workers on as they need them.”
But the fastest growing segment is in information technology, Marcon said.
To put it into perspective, IT staffing made up about 19 percent of the placements made in 2013 where it had been at 5 percent in 1995. However, some direct hire employees have taken issue with this hiring trend.
Case in point, several former Harley-Davidson Inc. employees have filed a discrimination lawsuit in federal court against Infosys, a staffing firm Harley contracted with to staff its delivery center, according to a story in USAToday.
Employees allege that the firm discriminated against American workers by replacing them with temporary workers from South Asia, who had H-1B visas. Infosys, which is based out of India, has disputed the claims saying that the company faced a talent shortage in the U.S.
While Marcon wasn’t specifically talking about Harley, he knows that a number of companies see the benefit of hiring IT professionals on a project basis rather than hiring them full-time.
“Then it makes more sense to & lsquo;rent’ a large portion of talent as flexible staff that can help with the project,” Marcon said. “It’s been steadily increasing for decades.”
But there is also a tremendous amount of variance in the length of time people are employed and the amount of money they gain from the work. Often times, people with higher skills get paid more than if they worked for a company, but the lower-skilled worker often receives less pay than if they worked for a company directly.
“One of the largest segments though, is light industrial work and an example of that would be working on a pick and pack line – like Amazon uses during their big seasonal push so the flow of jobs during that time is high when orders pick up, once the holidays are over they are done,” Marcon said.