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On The Rebound: Temp and Staffing Agencies

November 8, 2011 by Joshua Wright

If it’s true that an uptick in temporary hiring means good things down the road for the labor market, the US could soon be in better shape than most people think. For now, the latest employment data makes it clear: many businesses are sticking with the “try-before-you-buy mentality,” as a staffing agency executive in Indianapolis put it, rather than investing in full-time workers.

Since the recession ended in 2009, the growth in temporary help services (an industry that comprises staffing and temp agencies) has been striking: more than 443,000 estimated new jobs nationally — a 24% expansion. No other industry comes close in terms of new job growth in the last two years; in fact, temp help services has added more than four times as many jobs than home health care services, which rank second on the most-growth list.

Put another way, the US has added just over 981,000 estimated jobs on net since 2009, and an astounding 45% of these new jobs have come in temp help services.

NAICS CodeDescription2009-11 Change% Change2011 Earnings
561320Temporary Help Services443,55224%$31,924
621610Home Health Care Services108,0948%$30,365
911000Federal government, civilian, except postal service100,5635%$112,121
722110Full-Service Restaurants95,0632%$20,150
211111Crude Petroleum and Natural Gas Extraction88,97316%$74,492
561720Janitorial Services80,1364%$16,851
621111Offices of Physicians (except Mental Health Specialists)74,0693%$95,526
624120Services for the Elderly and Persons with Disabilities69,30410%$22,222
TOTAL981,5611%$52,217
Source: EMSI Complete Employment - 2011.4

But some perspective is necessary here. The industry has a long way to go before reaching its pre-recession peak employment in 2006, when it accounted for 2.6-plus million jobs. As of EMSI’s most recent dataset (2011.4), temp help services account for less than 2.3 million jobs. (From 2007-09, the industry took a 30% dive–a loss of nearly 750,000 jobs.)

A Lot of Low-Paying Jobs

Another reality to face here is that most firms pay low wages when they choose short-term workers through staffing agencies. The average earnings per job for temporary help services sector is $31,924, and it’s easy to see why when we look at the top occupations staffed in the industry. The most common occupations are laborers ($11.06 median wages per hour at the national level), team assemblers ($13.04 per hour), and office clerks ($12.46 per hour).

OccupationEmployeed in Temp Help Services (2011)% of the Total Jobs in Industry (2011)
Laborers and freight, stock, and material movers, hand261,34911.40%
Team assemblers120,8375.30%
Office clerks, general115,9555.10%
Packers and packagers, hand91,6324.00%
Helpers--Production workers89,6683.90%
Construction laborers80,7953.50%
Customer service representatives71,9603.10%
Registered nurses70,6563.10%
Employment, recruitment, and placement specialists61,5462.70%
Production workers, all other44,8502.00%
Executive secretaries and administrative assistants40,8641.80%
Assemblers and fabricators, all other37,9491.70%
Stock clerks and order fillers36,3051.60%
Packaging and filling machine operators and tenders34,8651.50%
Secretaries, except legal, medical, and executive34,3241.50%
Licensed practical and licensed vocational nurses32,3721.40%
Receptionists and information clerks31,3111.40%
Shipping, receiving, and traffic clerks30,2441.30%
Data entry keyers28,9281.30%
Nursing aides, orderlies, and attendants26,7651.20%
Industrial truck and tractor operators26,7451.20%
Janitors and cleaners, except maids and housekeeping cleaners26,5181.20%
Bookkeeping, accounting, and auditing clerks25,1081.10%
Truck drivers, heavy and tractor-trailer24,6241.10%
Inspectors, testers, sorters, samplers, and weighers23,3281.00%
Machinists22,8451.00%
Source: EMSI Complete Employment - 2011.4

Top States For Temp Workers

All but two states — Delaware and Alaska — have added jobs in temporary help services in the last two years. And quite a few states have added a huge percentage of new workers in this sector, led by South Dakota (55%), South Carolina (53%), and Indiana (50%).

The states with the highest concentration of temp help services jobs are South Carolina, Michigan, Illinois, and Tennessee — all of which have at least 43% more temp workers per capita than the national average. The following map and table show concentration, or location quotient, by state. (South Carolina is at the top at 1.56; Alaska, not shown, is at the bottom at 0.18.)

State2009-11 Growth% Growth2011 Avg. Earnings2011 Concentration (LQ)
South Carolina (SC)17,36453%$31,573 1.56
Michigan (MI)25,35435%$30,549 1.46
Illinois (IL)27,96726%$28,772 1.43
Tennessee (TN)13,74226%$26,096 1.43
Indiana (IN)21,26750%$25,907 1.39
Kentucky (KY)12,31441%$24,051 1.38
Georgia (GA)16,26321%$32,211 1.35
Alabama (AL)10,80135%$26,269 1.29
Minnesota (MN)11,66130%$29,484 1.12
New Jersey (NJ)10,10316%$33,442 1.12
Ohio (OH)20,79428%$25,645 1.12
Wisconsin (WI)14,03038%$25,756 1.12
Mississippi (MS)7,03349%$24,585 1.1
North Carolina (NC)19,75436%$31,401 1.1
Rhode Island (RI)1,63624%$32,014 1.08
Texas (TX)33,48420%$32,258 1.08
Oregon (OR)5,34722%$32,326 1.02
California (CA)38,41217%$35,782 1.01
Arkansas (AR)4,05925%$23,822 1
Pennsylvania (PA)19,61027%$31,688 0.98
Iowa (IA)7,93149%$27,611 0.94
Massachusetts (MA)9,52223%$39,958 0.92
Nevada (NV)3,52525%$26,119 0.92
Connecticut (CT)5,26626%$37,372 0.89
Missouri (MO)8,14725%$29,386 0.89
Delaware (DE)-46-1%$37,041 0.86
Virginia (VA)9,63922%$34,657 0.85
Florida (FL)15,58117%$30,199 0.84
Kansas (KS)3,46621%$28,219 0.84
New Hampshire (NH)2,83646%$35,620 0.83
Oklahoma (OK)5,00727%$27,299 0.83
Idaho (ID)87310%$24,539 0.81
Utah (UT)3,87428%$25,912 0.81
Maryland (MD)1,7655%$42,667 0.79
Colorado (CO)5,46420%$34,773 0.78
Arizona (AZ)2,91010%$36,156 0.77
District of Columbia (DC)1,17217%$50,764 0.74
Washington (WA)4,77115%$45,150 0.74
Louisiana (LA)1991%$35,952 0.71
Nebraska (NE)2,67134%$27,798 0.65
New York (NY)12,37616%$42,878 0.63
West Virginia (WV)1,56531%$30,828 0.56
Maine (ME)86519%$29,172 0.51
New Mexico (NM)2865%$33,476 0.44
North Dakota (ND)48721%$28,759 0.41
Montana (MT)54120%$23,750 0.39
Hawaii (HI)3189%$26,749 0.36
Vermont (VT)47831%$26,646 0.36
Wyoming (WY)27518%$33,952 0.35
South Dakota (SD)80855%$23,446 0.31
Alaska (AK)-15-1%$49,466 0.18
Source: EMSI Complete Employment - 2011.4

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lllustration by Mark Beauchamp.

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