Spike in temporary jobs could be positive sign for economy

By Nicole Lucht (contact), In Business reporter

Fri, Sep 11, 2009 (3 a.m.)

Temp jobs are increasing in Las Vegas, and economists say this could, perhaps, be an early indicator of an economic recovery.

Temp agency Manpower Las Vegas has seen a 20 percent increase in placements during July and August, said Evon Stevenson, director of business development for its professional division. The company is not releasing specific numbers because of client confidentiality, she said, but primary clients are in the retail and manufacturing sectors.

“They’re ordering more folks,” she said. “It’s a recovery, (but) it’s going to be slow but steady.”

Manpower and other major staffing agencies have had seven consecutive weeks of growth since the end of June, the longest stretch in 21 months, according to an analysis by the American Staffing Association.

Las Vegas’ jobless rate has nearly doubled in the past year, clocking in at 13.1 percent in July. There are few cities with higher unemployment.

In July the Las Vegas economy lost 11,900 jobs, state figures show.

In Las Vegas Manpower has divisions in traditional and professional services, such as administrative, industrial and light industrial. The company also hires out for convention work, she said.

“Staffing agencies are the first to feel (an economy) on the rebound, and the first to feel it on a decline,” Stevenson said.

Nationwide, employment growth at temp agencies has not changed much from the first quarter of this year to the second, the association said. Companies employed an average of 1.9 million temp workers per day from April through June, 3.5 percent lower than in the first quarter of this year and 30.2 percent lower than in the second quarter of 2008.

“These employment numbers are not surprising,” said Richard Wahlquist, the association’s CEO. “However, the recent performance of the index as well as anecdotal reports from (association) member staffing firms suggest that the industry may be seeing signs of stabilization.”

There are two factors potentially at play, said Brian Gordon, principal at Applied Analysis, an economic consulting firm.

One is that employers and businesses are starting to see increased demand and are seeking temporary workers as they feel out the market.

Another reason could be that when companies laid off employees, they let too many go and are now short-handed, forcing them to pick up temp workers on a full-time or part-time basis, he said.

Taking on temporary workers also has a fiscal advantage for businesses, he said. Those workers aren’t eligible for costly benefits, such as health insurance, that regular employees receive.

“(Temp workers) may be attractive during this unsteady economic time,” Gordon said.

As the economy picks up, there should be a rise in jobs going to temporary workers, said Keith Schwer, director of UNLV’s Business and Economic Research Center.

Historically, the increase of temp workers has been an indicator of economic recovery, but it is not always reliable, he said. It could either mean that businesses are, indeed, testing the waters and taking on these workers to decide whether a regular position is warranted, or it could mean that employers are still grappling with keeping costs low, Schwer said.

“It’s probably the former,” he said. “It’s a way for companies to handle the recession and stay afloat.”