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Temporary Agencies See Signs of Recovering Demand

Labor: Requests from defense, finance firms are especially strong as more skilled workers take short-term jobs.

June 25, 2002|KELLY YAMANOUCHI | TIMES STAFF WRITER

Employers wary about the nation's weak economic recovery are understandably reluctant to add many permanent workers.

The answer: Add temporary workers.

Staffing firms say they've seen demand for temps begin to pick up in recent weeks, after slumping from late 2000 through early this year during the recession.

Demand has been particularly strong in finance and defense, said Colin Bennett, an economist with the Employment Policy Foundation.

"[Employers] let people go because of how poor the economy was. They bring our people on first because they're not sure if it's stable," said Jeffrey Joerres, chief executive of Manpower Inc., one of the nation's largest temporary-employment companies.

The recent pickup in demand for temps could contribute to the longer-term growth of temporary work and the broadening of such work beyond traditional clerical fields, temp agency officials say.

More workers in such areas as computer programming and engineering have been turning to temporary work to earn a paycheck, said Alec Levenson, a professor at the Center for Effective Organizations at USC's Marshall School of Business.

But getting a temp job can be difficult because though demand for temp workers recently began rising, staffing agencies have not yet started to hire more workers.

The number of temps and contractors employed at staffing firms had declined since late 2000 during the recession, although the cuts have slowed, according to the American Staffing Assn.'s most recent survey.

"We've certainly got a big pool to draw from nowadays," said Sue Foigelman, manager for Manpower in Orange County.

A few years ago, Foigelman said, her office would do a series of skills tests for anyone who came in. Now, there is so much competition that many people seeking temporary work are not even given an application.

The large pool of applicants means that employers have a more highly skilled group of temps to choose from, including older and more experienced workers.

Brian Reilly, 39, lost his job as an office manager in September "and just struggled to find work" for months, he said.

He has temped between jobs for more than 10 years and found a temporary position in Irvine at Jostra-Bentley Corp. three months ago. That recently led to a permanent job as accounts receivable coordinator.

"You can shop around until you find something that you like," Reilly said. "That's what's always lured me toward going to a temporary agency."

More accounting and information technology professionals also are going the temp route than in the past, Levenson said. Most are seeking a permanent job, but others have no intention of finding one.

"You love the freedom, the independence," said Steven Pfrenzinger, who left a job as a computer programmer with dreams of becoming a writer and a public speaker on the side--which he did, while doing temporary work for three years. He later started a staffing and consulting firm.

Rowland Heights resident Jimmy Moore has done consulting and temporary work for 22 years for 45 companies--by choice--in the Los Angeles area. He thinks as much as 40% of people who try temping stay with it, and he calls permanent workers "captive employees."

But Jeff Davis, an Oceanside, Calif., resident who left middle management at a pharmaceutical company to work in three- to six-month spurts as a computer programmer and developer, warned that temping isn't for everybody.

In his field, "when you come into a contract position, often it's a situation where they're having a real problem. They're looking for someone to come in and clean up the mess," Davis said.

And though a couple of years ago he could fetch $80 an hour, now it's closer to $50 as demand for his talents has waned.

Many experts believe that the longer-term trend toward more use of temp workers will continue.

The number of temporary workers employed by staffing agencies has increased steadily from 907,000 on an average day nationwide in early 1992 to 2.6 million in the third quarter of 2000, according to the American Staffing Assn.

"You're finding more and more use of temps on a regular basis ... with the increase in companies trying to minimize how much they spend, to try to limit their head count to only the people they actually need on hand," Levenson said.

Some labor groups object to the trend because temps sometimes receive less pay, benefits, job stability and control in the workplace.

But David Lewin, a professor of management and human resources at the Anderson School of Management at UCLA, said much of the growth in temporary work was fueled by people who do it by choice.

"The use of temporary work is actually going to increase because both sides want it," Lewin said.

Temporary agencies are optimistic that business will continue to improve in the coming months. Until recently, gloomy expectations meant companies were reluctant to spend even on temporary workers, Foigelman said.

"It's really only the last month or two that I've really seen some stronger indications," she said.

But in certain niche areas, the demand for temporary workers has remained strong.

Aerospace is a bright spot. More government spending on defense and intelligence has helped boost the outlook for defense contractors, economist Bennett said.

Fred Schimmel, human resources manager for defense contractor Cartwright Electronics in Fullerton, is using more temps because contracts have kept the company busy.

"There's been no drop-offs," Schimmel said.

Burbank-based employment agency OnStaff has seen dramatic increases in demand in some areas, President Jeffrey Evans said. OnStaff saw requests for debt collectors quadruple last quarter, compared with a year earlier, and also had a pickup in requests for accountants and financial analysts.

One thing has remained consistent in the last year, however.

In information technology, "jobs are still scarce, very scarce," temp worker Moore said. "But the ones that are opening up are for temps."

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