As companies remain wary about hiring in this tough economy, more are turning to temp workers. Using temps and other so-called “contingent workers” can help risk-averse firms save on benefit costs, and it’s easier to sever the employment relationship.
Temporary-help services employment increased to about 2.3 million in March from a recent trough of about 1.7 million in mid-2009, according to the Labor Department.
“We have large clients that have laid off hundreds, thousands of employees. They are now using a large chunk of temp workers, managing their labor needs in real time. It’s cost containment,” said Neil Alexander, co-chair of the contingent worker practice group at labor law firm Littler Mendelson.
“This is the new face of labor,” he said.
There could also be a longer-term trend at work, with increasing use of the Internet and the globalization of the labor market leading to a larger slice of the employment pie available to alternative workers, said Barry Asin, president of Staffing Industry Analysts, a research and consulting firm.
“This sort of labor used to be more about office work and industrial work,” Asin said, “but more and more of what’s getting done is in professional skills, information technology, finance, accounting, health care.”
Meanwhile, entrepreneurship is at a relatively high level, according to a March report from the Ewing Marion Kauffman Foundation, which promotes entrepreneurship. According to the report, 0.34% of adults created a new business per month in 2010, about 565,000 new businesses each month, matching 2009 for the highest percentage in more than 10 years.
Nevada, Georgia and California — all with high unemployment rates in 2010 — had the highest entrepreneurial activity rates.