Advisers at the Oakland Career Center in Northern California knew the economy was in trouble when not one of their temp clients could get a single call from an employer.
“The well is completely dry,” said career counselor Ingrid Nyberg. “I’m speculating, but it makes sense because in a recession, employers aren’t going to pay an agency to find a worker when they can use their own network for free.”
Not too long ago, companies were so desperate for help that applicants could walk into a temporary staffing agency and have their pick of assignments. The tight labor market in recent years meant employers competed for the best and brightest temporary workers.
No more. Today, if job seekers can find an employer hiring temps, they will do whatever it takes to get the job, including commute longer distances and work for lower pay, said Tyrone Tan, vice president of Accel Employment Services in Oakland. He said the employers, not the applicants, can afford to be choosy.
“At the time, a lot of staffing firms were not able to provide that higher quality,” Tan said. “You would get people there, but they may not have the skill set. In today’s market, there are a lot of people with great skills.”
Officials at Adecco, an international staffing agency, said far fewer temporary workers have been needed by clients in the past 18 months. However, the company has been able to maintain a steady client base, said Lydia Wilson, senior regional vice president of the Northern Peninsula and San Francisco region.
Employers are still looking for qualified people, especially in the biotech and finance industries, Wilson said.
“What we find is that companies are still using temporary help as part of their hiring process,” she said.
The temporary workforce serves as a kind of economic barometer, said Steve Berchem, vice president of the American Staffing Association. When the economy picks up, more firms scramble for temporary workers to keep up with an increasing workload. As companies prepare to downsize, they hire fewer temps.
While there has been a decline in temporary and contract work, there are signs that the worst may be over, Berchem said.
The $77 billion staffing industry has been growing steadily since 1992, he said. According to the association, average daily employment for temporary help services has increased at an average rate of 10 percent a year over the past seven years.
The fastest growth has been among professional occupations, the association said.
That growth leveled off in the late 1990s because of the tight labor market. The association’s members had plenty of job orders, but few qualified candidates to fill those positions, he said.
In October 2000, before the recession hit, the staffing industry started declining. But there was no decline from December to January, he said.
“We may have bottomed out,” Berchem said. “But it may be too early to tell. We’re hopeful that growth will resume very shortly.”
In fact, a Bear Stearns survey of 104 original equipment manufacturers in electronics found that 85 percent plan to increase outsourcing this year — and 40 percent of those said they expect to contract out at least 90 percent of their final product.
Although many companies have cut back on temporary employees, some firms are hiring workers to plug holes left by downsizing.
Anna Johnson, an Oakland woman laid off from a software company in April, turned to temping rather than deplete her savings account. She was registered with a temp agency for nearly two months before she was assigned to her first temporary job in August.
After a series of temporary assignments, she landed a six-month gig at a Pleasanton, Calif., software company in October. The job is a permanent position that has been open for about a year, said Johnson, who worked temporary jobs after graduating from college 10 years ago.
More Top Picks Best Large Water Filters Pitchers Under 25
So far, the new temp experience has been a humbling one, she said. Johnson said she and her temp colleagues are overqualified for their positions and are paid significantly less than the job is worth.
“If they were to place professional, permanent people in this assignment, it would be a $50,000 to $65,000 a year job,” she said. “But they’re paying about $30,000 to $35,000,” she said.
Helene Jorgensen, an independent consultant and research associate at the Center for Economic and Policy Research, said more companies have used temporary workers as a strategy to increase flexibility and cut labor costs. Many temporary workers have no health benefits, vacation or pension plan.
Some agencies have begun to offer coverage, but it’s often costly for the temporary employee, she said.
Still, many people choose temporary work because they think it will lead to a full-time, permanent job, she said.
“It can be a way to get into the labor market if you don’t have a lot of work experience,” Jorgensen said. “You go and prove yourself for a month or two. The problem is that an employer might be looking for a permanent person, but it might take two years before they hire because they’re looking for the perfect person.”
Not everyone is betting on temporary work. John Zugel, a software engineer who was laid off from his contract job at Cisco Systems last spring, said he’d take a permanent job any day. The San Jose man has been a contract worker since the mid-1970s.
“I’d be perfectly happy working full time right now,” said Zugel, who’s taking classes at a local community college. “I say, if you have a job, hang on to it. If you have a job and you hate it, hang on to your job.”