Demand for temp workers far out-paces the growth of full-time jobs

Note to job hunters who feel unloved: These days, lots of employers are looking to start dating — they're just not ready for commitment.

The demand for temporary labor is far out-pacing the growth of full-time jobs in the private sector. Since April 2009, the month that temp jobs started to grow, the number of people employed through staffing agencies has grown in Georgia by 21 percent. That was while the number of jobs in Georgia was shrinking by 2 percent, according to the U.S. Bureau of Labor Statistics.

Nationally, private sector jobs grew 1 percent from November 2009 to November 2010, while temporary labor skyrocketed 15 percent.

Temporary labor is enticing to employers testing out the need for more workers, because temp employees, who don't get benefits, cost less and can be cut at a moment's notice. Workers may regard temp jobs as less than ideal, but growth in the temporary labor market is a good sign, economists say, because it indicates companies are seeing increased demand for services.

Keith Ordan, partner of Intersect Group, an Atlanta-based staffing company that places workers in temporary information technology, accounting and finance jobs, said he's seen a surge in requests for temporary labor in recent months.

“Companies are more cautious, which is a good thing for us,” Ordan said.

Staffing companies like Intersect perform a service for both employers and workers. They take the burden of finding, screening and hiring qualified candidates off employers' shoulders. And they offer workers ready access to positions unavailable through other avenues.  The employer pays the staffing firm, and the staffing firm pays the employee some lesser amount, keeping the rest as compensation for its services.

Edna Baldwin, of Douglasville, turned to temporary work after losing her real estate position in July 2009. She was eventually hired after four months of temp work, only to be let go after her project ended, she said. Months later, she snagged another temporary position in property accounting at half the pay she once made.

She worries she may not be hired full-time because she's more affordable to the company as a temporary worker.

"They said I was like getting a Porsche for a VW price," said Baldwin, 40. "They pay a higher rate to the temp company than I would make as a permanent employee, but that's still cheaper than making me theirs."

But there are advantages for her, too: She's first in line to hear of any full-time positions that may become available in the company, and she now has time to go back to school to get a masters degree, she said.

"In my mind, it [is] better than unemployment, and I can feel useful," she said.

Ordan doesn't see the demand for temporary labor slowing anytime soon.

“We are accelerating into the New Year,” he said. “We’ve seen a tremendous demand for contract labor and consulting services and I expect that to continue.”

The surge of temp placements makes financial sense to companies during the long, uneasy transition from recession to recovery, said economist Adrian Cronje, a partner at Balentine, an Atlanta-based wealth management firm.

“Corporate treasurers are sitting on piles of cash,” he said. “But companies have worries about the certainty of demand, and they have kept their options open by hiring temps rather than investing in permanent staff.

“Permanent staff means benefits and other commitments, and you can’t reverse course very quickly,” Cronje said.

The question is, will increased reliance on temp workers be temporary, as it was in past business cycles, or will it become a permanent fixture of the employment landscape?

Ordan, for one, thinks firms still spooked by the swiftness and severity of the financial meltdown may cling to temps longer than they did in years past. "People are more nervous about the fragility of the economy and the possibility that any recovery might not be long-lived." he said.  “I think a lot of people in this recovery have seen the benefits of a flexible workforce and being able to turn off that labor spigot.”

The costs associated with complying with new health care legislation may also discourage firms from making permanent hires, he said.

Scott Kriscovich, president of Atlanta-based TrueBridge Resources, said he's also seen an increase in demand for contract placements, primarily in the technology, accounting and finance, human resources and marketing fields. Some positions are project-based, while others continue indefinitely, all the while remaining on TrueBridge's payroll.

Quite recently, though, he said, he's seen a slight shift toward hiring for full-time positions.

“It’s not going gangbusters, but there’s a steady pick-up," he said.

Amanda Miller is among the few whose time in temporary positions paid off, though not at first. After graduating from University of Georgia in 2009, the Snellville woman sought placement through a staffing agency when her public relations internship didn't turn into a full-time gig.

Miller, 23, worked as a receptionist for various local businesses, including a four-month stint with an Atlanta-based apparel company.

"Working as a receptionist isn’t exactly where I’d want to be the rest of my life, but it’s a great company and I needed a job," she said. "But they never offered [a full-time position] when I was there."

She was then hired at a Decatur marketing firm full-time, only to be let go a month later. Miller returned to the staffing agency, which sent her back to the receptionist position with the fashion company. And just before Christmas, Miller said, she learned the company was offering her a full-time sourcing position.