Temp Jobs Gain as Uncertainty Reigns

By PAUL VIGNA And JOHN SHIPMAN
Despite rising profits, big businesses remain hesitant to hire permanent employees, a reluctance that is fueling demand and higher profits for the companies providing temporary staffing services.

Manpower, TrueBlue Inc. and Robert Half International reported second-quarter gains in their businesses as employers continue to prefer the flexibility that temporary workers provide while awaiting more tangible signs that the budding recovery won’t stall.

TrueBlue, a Tacoma, Wash., blue-collar temporary staffer that operates Labor Ready, Spartan Staffing and other staffing outfits, last week said profits more than doubled, aided by a 15% rise in revenue and an income tax benefit.

Manpower’s Jeffrey Joerres says firms are loath to hire permanent staff.

Chief Executive Steven Cooper said manufacturers are hiring more temps now than during similar points in prior economic recoveries. “It feels like they’re hiring back full shifts full of temps,” he said during an call with analysts. There may be a point when businesses become more comfortable with hiring permanent workers, “but we don’t see those conversions happening yet,” Mr. Cooper said.

In fact, he suggested businesses are quite happy with the flexibility offered by hiring temps, and aren’t in a hurry to give that up. “They don’t have to deal with the out-placing on the downside and so as we’ve gone through a couple recessions in the 2000s and this [last] one being a big one, lots of lessons learned,” he said.

So far this year, the private sector has added 593,000 jobs, according to the Bureau of Labor Statistics’ establishment survey; a little more than a third of them, 218,000, have been temporary jobs.

Bigger rivals Robert Half and Manpower each posted a doubling of second-quarter income; Robert Half, which had a 10% first quarter drop, posted a sales gain of 2% over a year ago. “We believe there is greater acceptance by companies of flexible staffing models that include a mix of both full-time and temporary workers,” Robert Half CEO Harold Messmer said last week.

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