Mr. Jones has been drafting new drawings of the piping at an Atlanta-area factory on a contract for the last 10 months. When this job ends, he says it will be easy to find another.
The Texas native is part of a groundswell of temporary workers at staffing companies. The number of temps and their share of the U.S. workforce are both headed for records this year, according to forecasts by research firm Staffing Industry Analysts and others.
Increased consumer demand, a greater need for flexibility and new health-care requirements are prompting businesses to turn to staffing firms. Companies’ reluctance to hire amid concerns the economic expansion may slacken has also been a boon for staffing companies, its peers, and their shareholders. Many stocks in the industry are outpacing the Standard & Poor’s 500 Index, and analysts see more gains: Almost two-thirds of ratings for eight among the largest staffing companies are buy.
Automakers, retailers including Wal-Mart Stores Inc. and pharmaceutical companies such as AbbVie Inc. all use temporary staff. Those workers, full-time or part-time, handle everything from manning factories and warehouses to working in information technology or sales.
Ford (F), based in Dearborn, Michigan, has increased temporary workers by 11 percent over the past year amid rising sales and car redesigns. The positions include product design, purchasing, marketing and IT.
Close to Record
The U.S. has added 913,200 temporary workers since the end of the recession in June 2009 — about 19 percent of all new jobs. Their number rose to 2.66 million in April, about 11,300 shy of the April 2000 record, according to U.S. Bureau of Labor Statistics figures released May 3.
Staffing industry revenue will increase 6 percent annually the next two years to $139.4 billion in 2014, based on an April 9 estimate.
What’s different in the current economic expansion compared with past recoveries is that companies are reticent to hire even as their business is growing and they need more staff.
The preliminary April tally shows temporary workers represent 1.97 percent of the labor force, close to the record of 2.03 percent set in April 2000, in data that go back to 1990.
Investors noticed. Staffing companies stocks have risen overall an average of 34 percent.
In one instance, a drugmaker hired Quintiles workers to handle field sales and marketing support for older drugs while its own staff focused on selling a new one.
While the number of temporary workers is rebounding from declines in the recession, profits haven’t fully recovered. The industry’s profit margins will remain below the 20 percent performance of the 1990s.
There’s a darker side to levels approaching record highs. Some companies rely on staffing companies to supply immigrant workers for industrial and warehousing jobs where permanent employees tend to complain about unpaid hours and transportation costs.
The transition started after the Sept. 11 terrorist attacks when the U.S. cracked down on undocumented workers and it’s been picking up in the economic recovery. Since temporary companies are responsible for verifying eligibility, some businesses staff warehouse and factory operations almost entirely with employees from temporary firms, avoiding the hassle of checking documents.
Most analysts covering the staffing industry are confident in its outlook. Out of 74 recommendations on eight of the sector’s largest companies, 64 percent are buy, 31 percent are hold, and 5 percent are sell, according to data compiled by Bloomberg.
The demand is so fierce right now that 39-year-old Atlanta temp Jones, who is paid $25 to $30 an hour, has standing requests from several companies offering a finder’s fee for referrals. It’s good news, because after working for staffing companies in at least half a dozen states, he’s not looking for permanent work.
“I’m the kind of guy who can leave one job on Thursday and show up on Monday in another state, ready to go,” Jones said. “There are jobs everywhere for me.”