OLMIS

by Martin Kraal
Published May-22-2012

What is Temporary Help? Occupational Trends High Growth Rate Projected

The temporary help industry offers myriad benefits for businesses and job seekers. Temporary help firms can provide flexible, short-term staffing solutions that afford client companies a degree of certainty during uncertain business climates. The industry also presents employment opportunities for job seekers looking for temporary work for personal or economic reasons, such as brief respites during periods of unemployment.

In Oregon, 742 temporary help firms employed 28,952 workers in 2011 (Graph 1). Employment in the industry tends to be rather seasonal with employment peaks around August and September. The industry accounted for 1.8 percent of the total workforce covered by unemployment insurance. However, the industry accounted for approximately 7 percent of the increase in total covered employment in Oregon in 2011. Nationally, the temporary help industry accounted for approximately 2 percent of the total covered workforce.

Industry payroll in Oregon was $783 million in 2011. Though this was an 8 percent increase from 2010, industry payroll is still down from a pre-recession high of approximately $840 million in 2007. The average annual pay per worker in the industry was $27,063, below the all-industry average of $41,669.

Temporary help businesses act as intermediaries supplying clients' businesses with workers for limited periods of time. Temporary help workers receive their paychecks from the temporary help company, even though they work and are supervised at the clients' worksites.

Some temporary help companies specialize in a specific industry or occupational group, such as administrative services. Others cover a variety of fields, such as medical workers, IT technicians, accountants, and productions workers, as well as various skill levels from entry level to professional positions.

A number of temporary help companies provide more than staffing services and participate in workforce development activities. For instance, some temporary help companies provide computer classes, first aid and CPR training, and on-site training for workers as well as services for employers, such as safety evaluations and human resources services.

Like other industries, the temporary help industry was not immune to the Great Recession. In fact, temporary help employment tends to be sensitive to business cycles (Graph 2). Temporary workers are likely the first to be laid off during recessions and first to be hired in the early stages of an economic expansion when orders and customer demand picks up. Thus the temporary help industry is viewed by some as a leading economic indicator, as increasing employment in the temporary help industry could signal an increase in overall employment to come. Dean Craig of the Personnel Source staffing agency in Salem stated that he "saw the downfall a year and a half before announced and saw the increase coming."

During the Great Recession, which lasted from December 2007 to June 2009 as defined by the National Bureau of Economic Research (NBER), employment in the temporary help industry decreased by 30 percent. During the same period, total covered employment decreased by 6 percent. On the other hand, employment in the temporary help industry grew 28 percent from July 2009 to December 2011, whereas total covered employment increased by only 2 percent. Time will tell if the increase in temporary help employment translates into an increase in overall employment.

Employees of the temporary help industry fall into a few different categories. Some are permanent employees of a temporary help company. Other employees are true temps, who work either full-time or part-time for a client company for a limited duration. Finally, some employees are temp-to-hires; they work temporary positions for a company with the possibility of being offered a permanent position. This allows both companies and workers the opportunity to determine if the position is a good fit.

Several statistics produced by the Oregon Employment Department are for the broader employment services industry of which temporary help services comprised approximately 90 percent of the jobs in 2011. Table 1 lists the top 20 occupations in 2010 in the employment services industry.

The largest occupations are found in the production and office environment. Production workers had the higher level of employment in the industry in 2010 with an estimated 1,580 workers. Of the occupations listed in Table 1, only two have a higher median hourly wage than the statewide median for all occupations of $16.90 in 2011. Registered nurses had the highest median hourly wage at $36.88. It is also likely that temporary workers make less than their occupation's median wage, as many temporary positions fall into the entry-level category and thus do not pay at the higher end of the wage range.

The temporary help industry has become more diversified over the past years, providing help for all types of occupations. The industry has expanded to include more professional occupations. Dean Craig states that he has seen "a larger number of more professional jobs and more that require education." These include a lot of positions in the accounting and medical fields.

Whether from seasonal trends or uncertainty over business activity as the economy recovers from the Great Recession, it is likely that companies will continue to utilize temporary help workers to satisfy workforce needs. According to the Oregon Employment Department's employment projections from 2010 to 2020, the employment services industry is projected to increase by 37 percent, or 11,400 jobs, which is a higher rate than the total payroll employment projection of 18 percent. This high growth rate reflects the growing trend for some companies to use temporary help firms to fill their vacancies.