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Are temporary employees the workforce answer?

August 5, 2013 | Posted at 10:25 am

Contract or temporary workers have always had a significant role to play in the American economy, but as the job marketplace becomes ever more competitive, it seems that some companies would prefer to take the transient rather than permanent route.

According to The Associated Press, the number of part-time workers employed in the U.S. workspace has risen by over 50 percent since the end of the economic downturn, with government data indicating that as many as 2.7 people nationwide fall into that job category. Once seen as the backbone of the small-to-medium business sector, temporary workers are now being feted by larger multi-nationals, many of whom see a huge financial benefit in bringing in non-permanent staff on a short-term basis.

Freedom and flexibility
While the use of contract workers has always been present across numerous industry sectors, temps have usually been required by the retail sector and other seasonally-affected companies. While it doesn’t provide the security or the benefits of a permanent position, it does allow for a certain amount of freedom or flexibility in terms of finding work, with many people finding that the temp role can transition into a more full-time placement – although research has shown that this only happens in around 27 percent of assignments.

However, there is evidence that the use of temps is now becoming more prevalent in industries that have previously required a long-term commitment from staff. Professional services companies have, according to the news source, been more active in the temporary market especially as doubts over the ongoing economic recovery continue to linger in the minds of hiring managers and human resources departments.

“Companies want to avoid having too many employees during a downturn, just as manufacturers want to avoid having too much inventory if demand slows,” notes Susan Houseman, an economist at the Upjohn Institute of Employment Research. “You have your just-in-time workforce. You only pay them when you need them.”

While the economic downturn in 2008 was especially brutal for many firms, it marked a strategic shift in the way that industry sector approached their staffing requirements, In previous times of financial difficulty, companies would engage in what was known as “labor hoarding,” with staff retained as the firm attempted to ride out any downturn in economic activity.

This is no longer the case and it appears that temporary workers are now becoming the norm within various workplace environments. According to the AP around 33 percent of temps are in manufacturing, while 20 percent are on the administrative or office-based side of the workforce. Non-permanent hiring has accelerated in the last five years, with a recent survey of companies with more than 1,000 employees revealing that 18 percent of their staff were either temps, contract workers or freelancers.

Eye on the economy
Todd Miller, the CEO of a 20-person software company in California, told the news source that around 33 percent of his staff members are temps while another 33 percent are contractors. Miller claims that he has had no real problem in operating his business with temporary staff, although he admitted to the AP that he would consider hiring permanent software engineers in a more robust economy.

In 2012, companies spent over $1 billion on non-permanent staff – or “flexible associates” as Wal-Mart has begun calling them – which represented a rise of 67 percent on similar employment practices in the previous year. There has even been a notable increase in the amount of online services that provide temporary workers for tiny periods of time, with placements of less than an hour not uncommon in some business sectors.

In the long run, however, the temporary worker will always be a quick fix. As the economy continues it’s steady growth upward, companies may find that permanent staff are a more financially prudent decision.