Temporary Help Employment in Recession and Recovery

Abstract

The temporary help industry, although small, plays a significant role in the macro economy, reflecting employers' growing reliance on temporary help agencies to provide flexibility in meeting staffing needs. Drawing on detailed temporary-help order data between 2007 and 2011 from a large, nationally representative staffing company, we provide insights into the characteristics of temporary help work, employers' use of temporary agencies to screen workers for permanent positions, and the industry's role in labor market adjustment over the business cycle. We estimate that the temporary help industry accounted for a large share of gross job losses and job gains over this period, as well as for a sizable share of net separations and hires. Nearly a third of assignments were observed to end prematurely due to worker performance problems (largely soft skills deficiencies) or quits, and hire rates of workers in temp-to-hire contracts were low. Although most temporary help assignments are short-lived, during the recession, companies lengthened temporary help assignments and reduced hiring from their pool of temps, possibly in response to economic uncertainty. Nominal wage growth among new temporary hires was weak over the five-year period and failed to keep pace with inflation.

The Potential Effects of Federal Health Insurance Reforms on Employment Arrangements and Compensation

“…For instance, recent trends among public school systems to hire substitute teachers through temporary help agencies enable them to shed retirement benefit costs for these workers (Houseman and Heinrich 2015).…”

“…Using data from a large national staffing firm, Houseman and Heinrich (2015) find that only a small minority of temporary help workers averaged more than 30 hours per week over the course of the year. Consistent with this finding, staffing firms report that the employer mandate is expected to have little impact on their costs (Hancock 2013a).…”

Examining the Antecedents and Consequences of Employee Engagement on Temporary Agency Workers in a Partner-led Environment

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