Employment Outlook: Boost in temporary hiring could fortell a rebound

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The U.S. economy has lost 7.3 million jobs since the Great Recession began two years ago.

The nation’s economy gained 4,000 jobs in November, the first monthly job increase since the end of 2007, but lost another 85,000 jobs in December, according to the U.S. Labor Department.

At least the U.S. job market has stopped bleeding jobs as badly as it was in the first quarter of 2009, when about 700,000 jobs were lost a month.

Still, the nation’s unemployment rate is at 10 percent and although temporary hiring increased in December for the fifth month in a row, job-seekers will likely still have a difficult time in 2010.
“I want to be very cautious, I’m not an economist, but unemployment numbers are lagging indicators when it comes to coming out of a recession, so while the numbers are getting better it is still going to be tough getting a job this year,” said Melanie Holmes, vice president at Milwaukee-based Manpower Inc. “Companies are still going to be nervous, and while there is no indication of a double dip recession, I think companies will be hesitant to jump into hiring a lot of full time employees.”
The National Bureau of Labor Statistics (BLS) released a report recently that indicated that overall payroll employment declined by 4.2 million in 2009, although the decline lessened substantially over the course of the year.
The report also indicated that nationally, jobs in manufacturing, construction and wholesale retail continued to fall, while jobs in health care and federal government rose or held steady.
“The health care industry has added 630,000 jobs since the recession began,” Holmes said.
Manpower has seen a slight pick up in manufacturing jobs despite the decline in national numbers, she said.
Sue Sattler, president of Waukesha-based Talent Network Group, which specializes in C-level position placement jobs particularly in the financial services and banking industry, said she has seen a slight uptick in hiring recently.
“Even though our numbers for manufacturing and financial service positions are up slightly, I would say that our clients, and everyone, is still a little shy on hiring full-time,” Holmes said.
According to the BLS report, employment in the temporary help services sector continues to rise, which according to Sattler, is an historic indicator that a job market turnaround lies ahead.
“The data indicates we are at least moving in the right direction,” she said. “The key is deciding how long it is going to take. Locally, there really hasn’t been a lot of hiring, but the BLS indicates there is increased activity in education and the health services positions. I went back and looked at the data to see what was going to tell me my business was going to start improving. What the data showed in every recession was that the coincidental indicator of improvement was an increase in temporary employees.”
Many employers are still scared and aren’t sure whether they should hire more employees or try to do more with fewer workers, Sattler said.
Holmes agreed, saying recessions typically improve productivity, but until confidence in the economy is restored, companies probably will try to get by on temporary help.
“Historically, the data shows that an increase in temporary hiring happens six to twelve months before the permanent hiring really gets rolling again,” Sattler said. “According to the BLS data, temporary hiring has been in the positive since August of 2009, that’s a good indication for most companies.”
Sattler predicts that the first half of 2010 will be great for temporary work, and by the second half, there will be a definitive increase in permanent hiring.

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