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Staffing employment up nationally a sign of growth and uncertainty

Springfield-area manufacturers add temp workers.

A national organization reported a 2.4 percent increase in temporary hiring in March over a year ago, a sign of a growing economy.

But local staffing agencies and experts say the recent recovery from the recession is different from those of the past. Staffing agencies such as Express Employment Professionals report up to a 20 percent decrease in staffing work.

“Historically, temporary work has grown most rapidly in the first stages of recovery,” said Steven Berchem, American Staffing Agency chief operating officer and author of the ASA Staffing Economic Analysis.

He said businesses uncertain about the economy lack confidence to hire people permanently.

“This recovery seems to be different,” Berchem said. “The growth in staffing employment has outpaced previous recoveries and lasted longer.”

The American Staffing Association has reported temporary hiring numbers since 2006 using an index that applies the weekly percentage change in employment to a reference value set in 2006. Berchem said that the index is a leading indicator for nonfarm employment and that it gives a snapshot of what the economy is doing at the time.

“Usually, (temporary hiring) is the first indicator. When you start seeing an increase in staffing agencies, it means there’s a production increase,” said Lehan Peters, deputy director of Job and Family Services of Clark and Champaign County and WorkPlus One Stop Center.

Peters said JFS tracks staffing agencies and that hiring there was trending up last quarter and this quarter. She cited an increase in temporary hiring at places such as Navistar and Honda.

In March, the staffing index was 91, 1.7 percent higher than in February and 2.4 percent higher than a year prior.

Express Employment, a national staffing agency with 16 offices in Ohio, saw a slowdown in the fourth quarter of 2012 that has continued into the spring. Local franchise owner Kristina Downing said that was unusual.

“Because we are a leading economic indicator, that concerns me a little bit,” Downing said.

She said typically, the first quarter of the year is the slowest and the builds throughout the year, and is highest at the end of the year.

“It’s been the same pattern for 20 years,” she said.

Berchem of ASA confirmed this pattern in staffing employment.

Downing said 65 percent of her business is manufacturers, many of which are international companies concerned with economic issues here and abroad, which may make those companies hesitant to hire. Others lost contracts, and many were concerned about the Affordable Care Act, she said.

“We are actually working harder than ever to keep our lobby full of candidates,” Downing said.

Another major staffing agency, Staffmark, has reported the opposite trend. General manager Jay Miller said he could not give statistics, but that temporary hiring is up at the Upper Valley Pike office.

The trend Miller sees is a good sign the economy is improving, he said. He said employers are doing temp-to-hire employment, meaning company’s are looking to grow but want to test out employees.

Typically, temporary work is for short-term projects and employers move on, Miller added.

According to ASA, staffing agencies hired 786,000 people since 2009 but only account for 2 percent of jobs in the U.S.

Berchem, Downing and Peters all said companies have been cautious about the economy, and are not confident in the ability to hire.

“Until we see greater or stronger economic growth, businesses will continue to be reluctant to hire,” Berchem said. “The economy has been growing on average less than 2 percent annual growth since the recovery started. The economy needs to grow faster than 2 percent to create the volume of jobs to replace all those that have been lost.”

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