Temp jobs have been disappearing. That’s actually good news for workers and companies.
Temp jobs have been disappearing. That’s actually good news for workers and companies.
The Labor Department is dropping two big sets of data this week. The Job Openings and Labor Turnover Survey for November will come out Wednesday, and the jobs report for December will be out Friday. One sector we’ll be keeping an eye on is temporary help services — the industry that helps place workers in temp jobs. The sector lost 13,600 jobs in November, down 5.7% from the year before.
When the labor market was red hot in recent years, the temporary staffing industry was too.
“Every staffing company I talked to back in ’21, ’22 was like, ‘We have expansion plans, we’re exploding’ and everything. Well, that party kind of ended,” said Ron Hetrick, a senior labor economist at the research firm Lightcast.
He said one reason there was a party to begin is that certain industries — think warehousing — saw a big increase in demand and needed a lot of temporary workers to meet it.
“And now demand has stabilized,” Hetrick said. “So that has kind of cooled off need for light industrial staffing.”
Hetrick said another reason the party’s over is that private-equity firms often fund projects that require companies they work with to bring on a lot of temporary tech workers.
But thanks to high interest rates, that private-equity funding has dried up.
“They went from record highs in ’21 and the beginning of ’22 to recent historical lows,” he said.
Also, a lot of companies have converted temporary roles into permanent ones because they wanted to hold on to their workers in a tight labor market.
And workers were happy to take those permanent jobs, said Susan Houseman, an economist with the Upjohn Institute for Employment Research.
“Most people who work for temp agencies don’t want to be working in a temp job,” she said. “They want to use the temp agency to find permanent jobs.”
Turns out, permanent employees can be better for companies as well.
Erin Hatton, author of the book “The Temp Economy,” said that not only are permanent workers more committed, they tend to be better trained.
“Oftentimes, you’ll see temporary employees thrown into jobs,” she said. “They don’t maybe even know what they’re supposed to do until they arrive. So that doesn’t make for great outcomes for productivity.”
Hatton said having workers in permanent jobs also gives them more economic stability, which makes them more comfortable spending.
So maybe they can just throw the party themselves.
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