More LI employers prefer to hire temps
On Long Island, as in the nation, there has been a surge in companies' use of temporary staff -- and a broadening of the types of workers being hired.
Temporary employment nationwide jumped 54 percent between July 2009 and July 2013, U.S. Bureau of Labor Statistics data show. By contrast, the overall job market edged up just 4.5 percent in the same time period.
Statistics for temporary employment aren't broken out on the local level, but Long Island temp companies say demand for temp staffers here has grown sharply. Barbara Gebhardt, president of Opus Staffing in Melville, estimates that her company's placements are up 41 percent since 2009 and revenue has risen 46 percent.
Moreover, the nature of temporary jobs is being redefined. The staffing industry is no longer regarded as just the go-to place for on-the-spot clerical help or light-manufacturing workers. Increasingly, companies look to hire workers on a contingency basis as a way to complement their professional staff.
"It used to be that firms would use temporary professionals for unexpected needs," said Chris Campisi, a Hauppauge-based branch manager for Robert Half International, a Menlo Park, Calif., staffing company. "That still goes on, but many more companies now are planning to supplement their core teams with temporary professionals."
All this change is disrupting the once reliable refrain that, as the temporary staffing industry goes, so goes the overall job market.
In the past, experts said, when the industry picked up steam, the overall job market generally did the same, both nationwide and on Long Island.
So when the national temp market began heating up four years ago, experts assumed the broader employment market would do the same. And yet the market for permanent jobs has stayed weak, locally and nationally.
The sharp contrast in employment between this bellwether sector and the overall job market can be explained, staffing industry experts said, by a single word: uncertainty.
Uncertainty about the economy and the cost of new health care laws is spurring employers to take on temps while companies put off hiring permanent employees. And, borrowing a page from inventory management's just-in-time principle, companies increasingly are using temps to ramp up or shrink their workforce more nimbly, in response to business conditions.
"Staffing growth has continued, but job growth has been weak, and the uncertainty has largely made the difference," said Steven Berchem, chief operating officer of the American Staffing Association in Alexandria, Va.
A Bureau of Labor Statistics report released earlier this month provided fresh evidence of employers' growing reluctance to hire. The number of U.S. job openings rose by 29,000 in June to 3.94 million, the highest since May 2008, Bloomberg News said. And yet hiring in the month declined from a year earlier.
"I think that companies are watching the cost of people much more closely and staying lean and then staffing up for whatever peak they have," said Gebhardt. "This was always the case, but it's more prevalent now because of what companies experienced during the downturn."
To be sure, another key reason for the industry's strong growth is its bounce-back from steep employment declines, said Heidi Shierholz, a labor-market economist at the Economic Policy Institute in Washington, D.C. Temp employment declined 34 percent from its peak in August 2006 to its lowest point in August 2009.
"The increase in temp help we have seen in the last four years has just been restoring what was lost as far as employment share," Shierholz said.
The sector's employment accounts for slightly less than 2 percent of total U.S. employment, a lower percentage than in 2000, she said.
For employers, the advantage now is that because of high unemployment they have access to more talent. And, as is customary, they don't have to bear permanent-employee costs such as payroll taxes, unemployment, disability and workers' comp insurance and benefits, if offered. The workers are employees of temp companies, which take on those costs.
"The contingency staffing firm does emerge as a very attractive way to control labor costs," said Lori Farley-Toth, a Melville-based vice president of sales at the staffing firm Adecco.
Persistent high unemployment nationwide and on Long Island has created a bigger pool of workers for temp agencies to choose from. Long Island had 92,200 unemployed residents in June, compared with 59,300 in June 2006, the year before the recession began, state Labor Department data show. Though the unemployment rate has been dropping, it was 6.1 percent in June, still up significantly from 3.9 percent in June 2006.
On Long Island, temp firms have seen stepped-up demand for more skilled workers such as chief information officers, senior accountants, assistant comptrollers, financial analysts, directors of operations and facilities managers in manufacturing, health care data managers, software developers and attorneys.
The demand for temps with backgrounds in STEM skills -- science, technology, engineering and math -- has been increasing in the New York metro area, including Long Island, said Tom Lawrence, Manhattan-based vice president for Troy, Mich.-based Kelly Services Inc.
"It just allows them to react more quickly to the dynamic of business," he said.
Bethpage Federal Credit Union hired a human-resources compensation and benefits manager and a mortgage supervisor after they began as temp-to-perm workers, said Melissa Feeney, vice president for human resources and learning. Those workers are often hired as permanent employees.
"We have made a tremendous amount of good fits going the temp-to-perm route," Feeney said.
Bethpage hired Smithtown resident Michelle Dyer LaTorre in April as a temp-to-perm executive administrator, working directly with chief executive Kirk Kordeleski. LaTorre, 33, became a permanent employee the next month.
She had used temp agencies between acting jobs and decided to try them again after a months-long job search turned up nothing. Lloyd Staffing placed her in the Bethpage job.
"I definitely knew [staffing companies] would be a big asset to my job search," LaTorre said.
Not everyone is sold on temporary employment.
Katthya Holsgrove, 43, a Williston Park resident, lost a six-figure job in the foreign-currency operations of a Manhattan bank in December 2011. Since then, she has found only temporary work that pays half that.
"You either take the temp job or you don't get any money from unemployment," she said. "Either way you are going to lose."
Stephanie Luce, an associate professor of labor studies at the City University of New York's Murphy Institute, sees the rise in temp jobs as another blow to workers facing diminished income because of a preponderance of part-time and lower-wage jobs.
"In general, there's just a lot more families that have unpredictable and precarious income they can't predict from week to week," she said.
Shierholz, the Economic Policy Institute economist, said given the unpredictable nature of temp work, she would be concerned if the industry grabbed a significantly higher share of the job market.
"That would be part of the erosion of job quality in this country," she said. "We just don't see evidence that it's a big piece of the story right now."
Keith Banks, president of Melville-based Lloyd Staffing, said such criticisms undersell temp jobs. "Our compensation rates are in line and competitive with what would be market-driven rates. We're not undermining an employee based on salaries."