Although temporary workers are typically the first to go when a recession hits, they are also the first to find jobs when the economic recovery begins, a trend that is currently playing out before the eyes of staffing agencies across the country, a new report from IBISWorld suggests.
According to the report, the current recovery is in such a state that the demand for temp work remains, while companies are generating more money, driving confidence to take on new workers. But despite this favorable climate for the staffing industry, it still faces several hurdles, such as the disheartening construction staffing numbers and the continued offshoring that is affecting manufacturing staffing.
Although the labor market has been shaky in recent months, the growing demand for temporary services has led business leaders' confidence to swell, as it could signal improved hiring in the coming five years. The report also noted that industry consolidation has picked up slightly, however it will remain relatively low in the next five years.
According to Kevin Culbert, an IBISWorld industry analyst, although it is recovering, the recession took a toll on the temporary staffing industry.
"While the number of available workers rose alongside growing unemployment, demand for temp workers declined in line with faltering corporate profit, causing industry revenue to fall," he stated, adding that this likely caused revenue to fall at a 1.7 percent annual rate in the five years leading up to 2012.
In the last five years, the report says, temp employment fell by an average of 0.5 percent every year, settling at 2.9 million workers. However, Culbert added, "more people are joining the temporary workforce because of family or lifestyle choices, and because temp agencies supply workers across many industry sectors and occupations."
Administrative and industrial workers are currently the most in-demand temp workers, however there has been a higher demand for temp workers in professional and business services positions in recent months, according to the report.
Although hiring got off to a great start in early 2012, employment gains have slowed in recent months, potentially due to the unexpected high employment numbers over the winter. According to the latest data from the Bureau of Labor Statistics, the U.S. added 69,000 new jobs in May, while the unemployment rate edged up slightly to 8.2 percent.