Manpower Sees Growth For Temp Workers Caused By Uncertainty
May 11, 2011 - Staffing company ManpowerGroup (MAN) said it was seeing a rise in demand for temporary workers because of uncertainty over the economic recovery. "Companies are changing the ways they are looking at their work models in this new, post-recession age," Chief Executive Jeff Joerres told Dow Jones Newswires. "Employers are seeing increased demand for their products and services but there is still a great deal of uncertainty around how sustainable their demand is, so they have been stretching their existing workforce and complementing that with temporary hires," he added. Normally, U.S.-based Manpower said it expected a shift from temporary to permanent staff approximately 12 months into a recovery, but after two years "contract and temporary workers are still gaining traction because of the uncertainty about the robustness of the demand," Joerres said.(WSJ)
Background and Implications
The downturn and fragile recovery have increased use of contingent workers in the United States. Historically, a flexible labor market meant contingent labor was less worthwhile in the U.S. than in other developed countries- for example, 4% of the United Kingdom's workforce is temporary compared to 1.7% in the United States. However, the downturn has reduced labor-flexibility in the United States since under-water mortgages prevent laid-off workers from moving in search of better job prospects. Meanwhile, risk-averse companies want to save on benefit costs and be able to sever the employment relationship if the recovery stalls. Staffing agencies offer these companies rapid recruiting lead times, a legal buffer for employment history and workers' compensation, and a non-obligatory employee relationship.
Purchasing’s role in managing the category is increasing, as companies search for savings opportunities in new areas. Traditional commercial levers such as benchmarking, consolidation, and cost modeling are proving effective in this category. In addition, third party solutions known as managed service providers (MSP) and vendor management software (VMS) are offering data management and risk mitigation. The extra attention is increasing competition and improving service delivery, to the benefit of many customers.
Other Recent News and Information
U.S. employers shift to temp workers: As companies remain wary about hiring in this tough economy, more are turning to temp worker. (Market Watch. April 27 2011)
