- The Washington Times - Thursday, September 19, 2002

The temporary-staffing industry, after a two-year downturn, is on the rebound, a trend some economists say points to a strengthening economy.
Contract sales and direct hiring of employees to clients rose for the temporary-staffing industry last month, according to a new report from the American Staffing Association (ASA).
"It's a pretty good rule of thumb that when the temporary-staffing industry is improving, the economy is getting back on track and toward recovery," said Rob Bird, chief economist for the Employment Policy Foundation, which monitors labor issues and trends.
According to the quarterly report last week from the ASA, which has about 14,500 employment agency members, contractual employment grew to 2 million workers last month, up 4.9 percent from 1.9 million in the first quarter of the year.
Sales in outsourcing workers also jumped to $13.7 billion for the industry, 9 percent more than the $12.5 billion in the first quarter.
ASA President and Chief Executive Officer Richard Wahlquist said temporary-employment businesses are often the first to show increased output and sales growth when the economy recovers.
"When the economy comes out of a recession, the first thing a business often looks at is increasing the use of existing employees and bringing back the temporary workers," Mr. Wahlquist said.
The Department of Labor also showed a rise in employment for the help supply services division, which includes contingent, contract and temporary workers, to 2.92 million workers for August, up from 2.87 million employees in July, but still lower than the 3.05 million a year earlier.
The earliest demand for workers came in industrial and hospital administrative jobs, Mr. Wahlquist said. While demand for technology workers continues to drop, the overall increase is a promising sign for employment firms, he added.
It's also a sign of new business in the private sector, said Susan Houseman, chief economist for the W.E. Upjohn Institute, which researches employment trends.
"When businesses start increasing their projects or workloads, they turn to the temporary-staffing companies to find often short-term relief," Ms. Houseman said. "You're seeing these companies show growth in their services, as well as reinvest in their company by adding on more personnel."
For Ajilon Inc., an international staffing company, top-line sales growth in the D.C. and Baltimore areas rose from 5 percent to 10 percent in the past four weeks. "We've seen very similar results to the [ASA] study, and it's amazing to see the increase in the number of people getting hired to full-time positions with our clients," said Susan Gallagher, Ajilon's regional vice president.
PoliTemp Inc. of the District primarily sends workers to government jobs, the only sector that grew in employee size during the recession. But company President Chris Jones said its private sector clients have boosted their orders by 15 percent in the past month.
"Associations, nonprofits, corporations that have a government division, and public relations firms, the crux of our clients, are psychologically getting over the events of September 11 and are moving forward, making a plan to invest in their company, in the economy by evaluating and adding on to their work force to meet their demands," Mr. Jones said.
Sales and client activity at NRI Staffing Inc., a D.C. firm that contracts finance, health care, legal, administration, and information technology personnel, have increased on a smaller scale, said company President Robb Mulberger.
But the increased productivity for employment agencies doesn't guarantee a recovery, said Alec Levenson, labor economist and professor at the University of Southern California. Mr. Levenson said other factors, such as the general output and growth from businesses, as well as the gross domestic product, have the same importance when determining an economic rebound.
"Increase in hirings of temporary workers is an indicator of recovery in some ends of the market," Mr. Levenson said. "However, it's one piece of the puzzle, so this increase doesn't guarantee that we are entering into a full-blown recovery, if any, but it does point in that direction."
While the growth in temporary employment gradually gains momentum, Mr. Bird said the ASA report and Department of Labor statistics are a confidence booster for the public after the recession and the corporate scandals.
"We obviously want it to be better, but the improvement we're seeing for the staffing industry is about what one would expect" in an economic recovery, he said. "It's a good sign for the economy as a whole."

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