A DAY & ZIMMERMANN COMPANY

February BLS indicates continued growth of temporary employment

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Posted by Joel Capperella

March 5, 2010

Our readers should be accustomed to the analysis we afford the Bureau of Labor Statistics' monthly Unemployment Report. Generally speaking, we take a long-view and a pragmatic approach to dissecting the numbers. For those new to The Seamless Workforce, understand the following perspectives:

  1. Recovery will be plodding and slow.

  2. Temporary employment figures are a leading indicator of employment trends.

  3. Examining unemployment numbers in isolation is meaningless -- it's critical to factor in other economic indicators.





So, basically, we view the analysis and measurement of potential recovery not as a derivative of job numbers, but by playing closer attention to how Ben Bernanke and the Federal Reserve are acting. Reading an all-encompassing set of tea leaves tells us far more about the difficulties of navigating our way out of the current economic malaise than counting jobs gained or lost. Ultimately, jobs are a lagging indicator of how the U.S. economic engine is running.

We'll return in a moment to some of the aforementioned factors, but let's put the focus back on today's BLS numbers, and consider the following:



  • Number of net jobs lost is 35,000 (There's always the temptation to trumpet this number as a positive because many economists predicted it to be larger -- but I bet it doesn't feel so positive if you're one of the 35,000...)

  • Number of temporary jobs gained is 48,000

  • Unemployment rate holds steady at 9.7 percent





The number that's most interesting to us is the 48,000 temporary jobs added. This brings the total of temporary jobs added since September 2009 to 284,000, and continues to be record growth for the temporary employment sector. And the February number is even more impressive if you were to consider the winter storms that hammered the Northeast throughout the month.

The continued dependency on temporary jobs indicates that there is still trepidation over how an organization should increase the size of its workforce. While historically, such increases in the temporary workforce would be a strong indicator of eventual growth, we believe it is more indicative of ongoing uncertainty.

We believe that this can be validated by evaluating the sectors where these temporary jobs have appeared. For instance, the BLS reports that the information industry lost 18,000 jobs in February. This same sector added temporary jobs. A net loss of full-time employment and a net gain in temporary employment in the same sector frequently is a result of an unwillingness to invest in long-term projects that require a deep bench.

Healthcare also continues to add temporary jobs. This is telling because this sector has generally remained steady throughout the recession where temporary jobs are concerned. This could be more of an indication of the demand for healthcare needs, rather than of the health of the economy.

The bottom line for the February BLS numbers is that while generally positive, they do not seem to indicate the cusp of any immediate or rapid growth.

Factoring in some of the other economic factors would appear to validate the complexities that this current recession has ushered in for today's business leaders. Consider the Federal Reserve's ongoing balancing act of holding down interest rates in the face of near-certain inflation. However, what could be even more telling is this article from Forbes published earlier in the week. Ben Bernanke continues to walk a tight rope of fiscal peril, placing bets on the necessity of holding rates low in order to avoid elements that prolonged the Great Depression. Doing so, of course, introduces the risk of creating yet another artificial bubble of some sort.

What would our recommendations be in response to this month's numbers and some of the current economic indicators?

  1. Invest in increasing the satisfaction of your workforce. Your workforce is probably feeling a little beat up. They have to take on more responsibilities without the benefit of pay increases or bonuses. There could be a general fear over losing their employment, and employees are likely weary of harboring such fears. It is critical to make investments that allow workers to increase their skill sets, feel connected to the objectives of the organization, and maintain solid communication to keep workers informed about the health and current status of the employer.

  2. Segmentation evaluation. We have been discussing more aggressive management of the workforce, and given the ongoing economic realities it is essential to continuously re-evaluate the workforce make-up and positively leverage the non-employee segment. Obviously, there are cost efficiencies to be gained, but equally as important is establishing a process that will enable the business to embrace leveraging non-employees, not as a way around head count, but as a viable strategy to extend the staff.

  3. Process maturity. We will be writing more about overall workforce maturity in coming months, but for now, an appropriate and immediate step is to evaluate and identify your most remedial workforce processes. Much can be gained from introducing minor improvements to mature the process. Job satisfaction numbers can increase, cost containment will gain traction, and a more aligned ecosystem of external partners will be better nurtured to execute against your strategic workforce plans.

























Topics: Staff Management, HR Strategies

Hiring Managers Guide to IT Staffing

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