As more companies shy away from committing to permanent employees, several have turned to temporary staffing agencies to fill their workforce needs, Bloomberg reports.
According to the news source, Create-A-Pack Foods Inc. recently benefited from the services of a temporary staffing agency. The company used it to bring on workers temporarily to determine if they were a strong fit, which in turn saved the company money. Also, it helped the Wisconsin-based company search out potential employees who were located beyond its territories.
"You can build good crews with temp services," he said, adding that the packaging company is currently looking to fill 28 open positions.
Create-A-Pack is just one example of the many businesses that are turning to staffing agencies for temporary help, which demonstrates a broader view of companies' sentiments toward permanent hiring. Data from the Bureau of Labor Statistics show that last month, the number of people working as temporary employees jumped by 10.7 percent compared with the same period last year to 2.5 million - the largest monthly increase since May 2011.
This trend is expected to pick up even more as companies realize the many benefits of temporary work, such as more flexible staffing arrangements, even if the shift originally began out of necessity, Tobey Sommer, director of equity research at SunTrust Robinson Humphrey Inc., told the Tennessean.
"Most businesses had to cut their permanent workforces deeply in the last recession," Sommer explained. "It was a traumatic experience they do not want to relive."
The current hiring environment shows how cautiously businesses are approaching their hiring plans, especially in the face of higher costs associated with the healthcare law and other future tax regulatory policies that will soon go into effect.
Bloomberg reports that normally, this jump in temporary staffing employment precedes a surge in overall hiring, however many experts believe that this time it could be different, with companies keeping temps for longer periods of time.
Overall, employment has been growing at an anemic pace for the last few months. In June, employment increased by 80,000, a gain that was largely supported by professional and business services.