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Workzone: Temp jobs not leading way to permanent ones
Monday, March 15, 2010

Just a few months ago, the first data that showed growing demand for temporary workers prompted optimism that at least some of those temp jobs would convert into permanent placements. That's how it's happened in previous recessions.

We're not so sure anymore.

The U.S. Department of Labor has reported five straight months of increased temporary employment, a trend that's also been apparent locally, where the unemployment rate has been about a full percent below the national number.

Sean Henderson, district manager for Kelly Services, says business was up 20 percent in January compared with January 2009, and the company recently recorded its eighth consecutive month of increased demand.

But will it translate to permanent employment anytime soon?

Mr. Henderson, while cautioning that "we're still in the middle of it," said employers have told his company they may be looking at full-time hires in the next 120 days or so.

Nationally, the picture may not be so bright.

"There are a lot of other measures that really show that [the job market] is on pause," said Christine Riordan, policy analyst for the National Employment Law Project in New York City. "It really looks like large-scale hiring is a ways off."

A recent story by Jeannine Aversa of The Associated Press raised the question of whether temporary hires are still a precursor to permanent positions in this historic recession, citing a lack of confidence by employers that the economy is really on the mend.

Tonika Hammonds, regional manager for Ajilon Professional Staffing, said her company has seen recent spikes in demand for both the Pittsburgh and Cleveland markets for temporary financial and accounting professionals.

"A lot of times they'll go temporary then take on people permanently. Obviously, I don't know if that's necessarily going to be an indicator coming out of this period," she said.

Ms. Riordan said there were tangible reasons why it's different this time.

With whole industries being hit in some cases, "people may have to retrain and gain new skills," she said. "Or they may have to relocate, which could be constrained by the credit and housing market."

Rather than looking at increased temporary hiring, Ms. Riordan suggests a better indicator might be the average number of hours worked per week. "Usually what happens after a recession is that that number will go up," as demand for products grow, she said. "We really haven't seen that kind of increase that we would expect to see before we move into long-term hiring."

Right now, it's taking an average of 30 weeks for a newly unemployed worker to find a new job, she said. During the 1983 recession, the average topped out at 21 weeks.

"We quite literally haven't seen this level of unemployment before in any prior recession" going back to the first records kept in the late 1940s, Ms. Riordan said.

In her estimation, "We are still looking at high unemployment rates over the next year or two."

Some companies are making adjustments to meet their needs.

Eleanor Arnold, practice manager for Hudson Professional Services' information technology division on the North Side, said she'd noticed a rise in temporary-to-permanent contracts, in which a company takes on an IT professional they want, often with the understanding that the job could become permanent six to 12 months down the road.

"The companies would like to take them on immediately but, based on the fact that there's still some uncertainty, the contract is obviously the less risky way to go," she said.

Steve Twedt: stwedt@post-gazette.com or 412-263-1963.
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First published on March 15, 2010 at 12:00 am