The return of temp jobs and other flexible employment arrangements might augur better news.
By Michael Beygelman
The continuing rise in temporary employment since last summer is perhaps the single best indicator in today’s economic landscape that an improvement to the jobs crisis is on the way. For six straight months, temporary jobs have increased, and this growing trend points to a new reality: Companies are looking for more resources and adding capacity back into their workforces. And that’s good news for the larger job market. As temporary and contract jobs pick up, more and more of them will last for a month—or a few months, or a year—and finally more and more of them will become permanent. At that point, the shift in the employment picture that we’re all so impatiently awaiting will truly lock in.
There is, of course, a long way to go. To gain back the number of jobs already lost, the U.S. economy will have to create hundreds of thousands of full-time jobs every month.
That, clearly, is still a mere glimmer on the horizon. In January, the economy lost 20,000 jobs, but that represented progress, as it brought the unemployment rate down to 9.7 percent. As the job market begins to recover, we should also expect the unemployment number to fluctuate. This will be the result of previously discouraged job seekers reentering the labor market, likely causing some bumps on the road to a more stable unemployment rate.
Small firms, in particular, still remain reluctant to hire people—be it temporarily or permanently. Nevertheless, month by month, week by week, workers are now being hired, even if for a limited period of time.
That’s good news in the near term and a harbinger of better days in the long term. Temporary hiring typically happens first by employers seeking industrial skills—in manufacturing, logistics, and transportation. That is followed by an uptick in demand for retail, and in the professional sector, finance, IT, engineering, and other scientific skills. All of that, to varying degrees, is happening right now.
Many employers say they might have cut too deeply at the height of the crisis. Still, as they are re-hiring now, amid continuing uncertainty, employers are cautious, frequently preferring flexible, temporary, or contract employees as an alternative to the onboarding of fulltime workers.
Employers never thought they’d have to reduce their staffing levels so dramatically in the first place—by 25 percent or more in many cases. Now, of course, they don’t want to have to do it all over again. That’s what drives home the appeal of temporary and contract workers—not only for the short-term, but also as longer term “flexible” arrangements that will last until the full economic recovery takes hold.
What we’re seeing from as many as 145,000 hiring organizations around the world is that this time around they are committed to learning from the lessons forced upon them during this most recent economic recession. Never again do they want to be faced with the same costly and inefficient cycle that swings from staff reductions to rehiring efforts.
Instead, they are looking for the sort of on-demand workforce model that flexes with their business requirements, rather than with the economic cycles. This marks a real shift in perspective. We have moved from the mindset that a healthy economy is one where permanent jobs are at a premium, to a new way of thinking. Under this construct, a healthy organization is one where both the employer and the employee have the flexibility to grow and evolve with their business needs or career objectives.
Temporary employment isn’t just about creating opportunities to test the waters for permanent jobs anymore. Instead, it’s about building an organization in a more flexible way, or building a career path that provides workers with desired autonomy and flexibility to be successful in the long-term.
In the end, a large component of any economic recovery depends on both the hard data and the less quantifiable psychology of employers and employees. It is about how people are feeling and how much they trust the recovery.
Coming back from an economic shock as severe as the one that we’ve been experiencing is a complex process. But at the heart of that process is simply a need for companies to feel sufficiently confident that they’re willing to get back into the hiring market. Today, we are seeing that process play out in the temporary jobs market and that’s great news! There’s reason to be hopeful that permanent employment job market gains are right around the corner.
Michael Beygelman is SVP, business development, with Adecco Group North America. He can be reached at email@example.com.