“In this paper, [the authors] draw on detailed data from a large, nationally representative staffing company on its temporary help orders between 2007 and 2011, a time period that spans the year prior to the start of the recession through the initial years of recovery” to analyze temporary employment, or employment that is expected to be time-limited (p.1-2). “[The] data yield a number of insights into the characteristics of temporary help work, including the distribution of wages and assignment lengths, number of assignments individuals hold, the likelihood of securing a permanent job with the client company, and the incidence of and reasons for termination prior to assignment completion” (p.2).
The data drawn “include information on all orders (temporary work assignments) with private and public sector organizations [in the United States]….These order-level data include information on more than 800 job classifications organized into 13 broader occupational categories, the start and end date of each order, pay and hours for each calendar year in which an individual worked on an order, individual identification number and birth date, location…of the branch placing each order, detailed classification of outcomes of the order…, and the type of order….The data set used in the analyses…includes more than 1.8 million orders” (p.7-8).
Even though “the temporary help industry accounts for about 2 percent of average daily employment in the U.S. economy…[it] plays an outsized role in workforce adjustment during recessions and recoveries. During the last recession…employment in the temporary help industry contracted by 30 percent and accounted for 11 percent of net employment losses economy-wide. Correspondingly, the temporary help industry has accounted for over 13 percent of net employment gains since the official end of the recession in June 2009. The large role that this small industry plays in the macro economy reflects the fact that, over the past two decades, employers have increasingly relied on temporary help agencies to provide greater flexibility in meeting their staffing needs. During this time, the industry…has expanded the types of workers it supplies to companies” (p.1). The authors explain that their research offers “insights into the dynamics of temporary help employment in recession and recovery” as well as a better understanding of temporary help work in general (p.2).(Abstractor: Author and Website Staff)
Major Findings & Recommendations
Key temporary employment characteristics from the data include the following: • “The largest occupational category…is light industry, which accounts for 44.5 percent of hours worked in [the] data, followed by office occupations (24.7 percent), contact center (8.1 percent), and electronic assembly (6.5 percent)” (p.9). • “Hourly wages for temporary help jobs are relatively low. The median hourly wage in [the] sample is $10, those in the ninetieth percentile earn $15” (p.10). • “[A]lthough assignments lasting more than a year represent a small share of all temporary help assignments, they are prevalent in certain professional occupations. Moreover, in all occupations these long assignments account for a sizable share of the hours worked in the temporary help industry” (p.12). • The authors find a “high rate at which temporary help workers are terminated for performance problems, particularly in the manual, low-paying occupations.…Moreover, about two-thirds of terminations for performance problems are the result of soft skills deficiencies—largely absenteeism and tardiness. These findings suggest that soft, not hard, skills are the most important barrier to employment for low-paid, low-skilled workers” (p.15). • “Across all orders, a small share, 6.6 percent, end in a hire by the client company” (p.16). “Despite its relatively small size, the temporary help industry plays an important role in adjusting labor during recession and recovery.…[The data] suggest that the temporary help industry accounted for a sizable share not only of net employment changes but also of gross hires and separations during the downturn and initial recovery years. In addition, [the] data reveal significant changes in the composition of the temporary help workforce and in employer behavior over the time period studied. As the economy entered a deep recession, the quality of the temporary workforce improved, as evidenced by a decline in terminations for performance problems and quits in all occupations. At the same time, employers generally lengthened assignments and reduced hiring from the pool of temporary workers, in spite of an improvement in the quality of workers…Finally, [the authors] present new evidence in the paper on the responsiveness of wages to economic conditions. In almost all occupations, nominal wage growth was weak during the recession and, over the five-year period, failed to keep pace with inflation” (p.34). (Abstractor: Author and Website Staff)