Temporary Help Services Reach Record High ...
 

It was bound to happen. Temporary Help Services reached a new high in terms of employment in May surpassing the previous high just more than 13 years ago in April 2000.

[Note: clicking on the chart will open it in a new browser window.]

As the chart shows, the sector has flirted with making new highs throughout much of 2006, but never surpassing that previous high of April 2000 until last month when it finally did.

But, is it really a development to celebrate? After all, temporary help services portion of all nonfarm employment -- i.e. its market share -- is lower, albeit incrementally, now than in April 2000. Why?

The world is a much different place today than 13 years ago. Jobs are quite different today than it was back then. Let's briefly -- very briefly -- explore how the nature of jobs has changed in the past 13 years.

Two sectors that were fairly important customers to many temporary help services back in 2000 were manufacturing and construction. In April 2000, those two sectors represented a total of 21.1 percent of all nonfarm employment. By 2006, they were only about 16 percent and last month those two sectors were only 13.1 percent of all nonfarm employment. And speaking of manufacturing -- it could again become a major force for the staffing sector -- there is speculation that the "energy revolution" could again make the United States a manufacturing powerhouse. For example, the cost of energy is about six times more expensive in Europe than in the U.S. so German carmaker BMW built a new factory in accordance to state-of-the-art sustainability principles in the U.S. to produce carbon fibers, which is a very energy intensive process. [We explored the apparent return of U.S. manufacturing in this space back in February.]

Temporary help services sector has been able to exceed its previous high 13 years ago despite significant shrinkage in two major customers sectors by servicing more sectors and / or broadening their array of services. But, they were not able to grow in terms of their share of the job market since the market share of temporary help services is slightly lower now (1.98 percent) than back in 2000 (2.03 percent).

Today, we -- along with a number of staffing industry consultants that we regularly work with -- are seeing that staffing executives are have come to the realization that in order to grow their business, they are not depending upon just temporary help services sector growth but are expanding into new markets, either, geographically or by discipline / service sector, or both.

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"The most important employment report in a long time" as announced by some pundits was relatively strong despite an economy on somewhat shaky ground and a stock market that did not do very well this past week.

The number of jobs in the private Goods-producing sector declined by only 1,000 in May, which is in improvement from April's drop of 15,000 but still contrasts to March's increase of 14,000.