Uptick in temp hiring still signals job recovery

It’s been a difficult job market for 4 years and running, but there’s a trend that has intensified since the fall — hiring by temporary help firms.

Historically, hiring of temps has been the first indicator that permanent positions are coming back. We hit a real employment trough in 2009 and things started getting better for temps last year. Now there’s been a further uptick in temp hiring in many parts of the country.

But here’s a distinction that’s been raised by articles I’ve seen in both The Los Angeles Times and The Wall Street Journal.  Hiring of temps is normally just a pass-through phase after a trough. This time, though, there’s a belief that employers will hire more temps in lieu of permanent employees. We’ll have to wait and see later in the year how it all pans out.

Our nation’s recent economic downturn was so severe that I believe there’s a more human factor at work in the hiring of temps. The reality is it’s so painful in human terms to lay people off that many companies don’t want to do it again. That’s what’s led to a surge in the hiring of temps.

Temporary jobs come with an understanding that they’re of finite duration. By contrast, there’s a whole different psychology when you start hiring permanent employees…especially if things get ugly again at businesses and you have to start with the pink slips all over again.

Even if temp hiring becomes a larger part of overall hiring, it will still be very small. Historically, temp jobs have accounted for about 1.5% of all positions in the United States. Let’s say that number goes sky high to 3% or 4%. Well, that still means well over 90 percent of jobs are permanent jobs. For my money, I still believe the numbers about temp hiring bode well for a job recovery going forward.