Rise in temp workers seen as positive
By Liz Enochs
Bloomberg News Service
BROOKLYN PARK, Minn. — Sales of Brady Corp.'s label and bar-coding systems have improved and, like other companies shaking off the U.S. recession, Brady is taking on temporary help.
The Milwaukee-based company has hired 26 employees at its plant here in the last four months. Sixteen are temporary workers.
Companies that supply contract workers added 136,000 jobs from February through April after 16 months of declines, Labor Department statistics show.
The economy expanded in the first quarter at the fastest pace in two years. As a result, healthcare providers, real estate companies and small manufacturers have dipped into the pool of contract workers — a harbinger of permanent hiring to come. Businesses typically hire temporary help before taking on full-time employees when it's clear that a recovery has taken hold.
"When things speed up, the first thing that we're going to see is an increase in temporary employees," said Caryn Addante, human resources manager at Brady's plant in Brooklyn Park. Once "we're certain that we're going to have a long-term need, we're going to convert them to full-time."
That's good news for unemployed workers. The jobless rate rose last month to 6 percent, the highest in 7 1/2 years, as people entered the work force faster than companies created jobs. Hiring of temporary help is "a leading indicator of permanent employment," said Paul Kasriel, chief economist at Northern Trust Co. in Chicago.
In the 12 months that followed the end of the last recession in March 1991, payrolls of companies that supply temporary help rose by 100,000, Labor Department data show. It was then that hiring began to pick up in earnest.
From April through June 1992, companies added 422,000 workers to their payrolls. Of those, 61,000 were at businesses supplying temporary workers.
Because the most recent recession was probably one of the mildest since the end of World War II, businesses may be quicker to take on permanent employees. "When we begin to have a little turn-up, it's usually six months before there's kind of a boom," said Robert Stover, chairman of Westaff Inc., a staffing agency based in Walnut Creek, Calif.
The number of U.S. employers planning to add workers in the third quarter rose to the highest level in a year, according to Manpower Inc., the second-biggest supplier of temporary workers. Manpower's survey of 16,000 companies showed that 27 percent expect to increase payrolls, up from 21 percent that planned to hire in the second quarter.
Last month, total U.S. payrolls rose by 43,000, the first increase in eight months, including the addition of 66,000 employees at agencies that supply temporary workers, government figures show.
"We're seeing it more in the midsize manufacturers looking for five people or 20 people," said Jeff Joerres, chief executive officer of Manpower. "It looks like the trends are going in the right direction."
Employers say that with more unemployed workers fighting over fewer jobs, it's easier to find qualified temporary help.
During the economic boom that followed the 1990-91 recession, "there were people who were hired who could pass a mirror test," said David Dunkel, chief executive officer of Kforce Inc., a Tampa, Fla.-based staffing company. "If you could fog a mirror, you got the job."
Now, temporary agencies are able to pick and choose from workers like Yvette White, 26, an international trade analyst who was laid off from her job at a software company in Washington last June.
Since then, the 1998 graduate of Georgetown University has lowered her salary requirements to $35,000 from $55,000, applied for about 150 jobs and paid her bills by taking on temporary assignments doing administrative work.
