Growth in temporary employment surges

Minnesota State Roundup

Published April 1, 1993  | April 1993 issue

Minnesota's employment in the personnel supply services, which temporary help agencies dominate, rose 18.1 percent or by 5,000 workers, between December 1991 and December 1992. The state's non-farm employment rose 2.7 percent, or by 58,400 workers during the same period. Hence, temporary workers, often called contingent workers, flexible workers or assignment workers, have accounted for a significant share of Minnesota's recent job growth, and employers' reliance on them is expected to accelerate.

As the economy improved last year, the use of temporary employees increased. "Business picked up in the second half of 1992, and was very strong in the fourth quarter with the demand for light industrial workers being somewhat stronger than for office workers," says Richard L. Cutshall, Upper Midwest Regional Manager, Manpower Temporary Services. "Employers were uncertain about the recovery's staying power, so they were reluctant to add permanent workers."

But the increase in the use of temporary employees cannot be solely attributed to an improving economy. Between December 1991 and December 1992, employment in personnel supply services rose 15.2 percent in the nation, close to Minnesota's 18.1 percent increase, but non-farm employment in the nation grew only 0.5 percent, less than one-fifth of Minnesota's gain.

"Employers are more sophisticated in their use of contingency staffing," Cutshall says. Employers keep a core of managers and valued workers, and they add and drop contingent workers as commerce expands and contracts. The increased flexibility in staffing and avoidance of high fringe-benefit costs results in increased profits.

The current trends are expected to continue. "Companies are not going to back to their former reliance on permanent workers, the trend toward contingency staffing will accelerate," Cutshall says. He is looking for strong business in 1993.

Besides using temporary workers, Minnesota employers are apparently contracting out other business services to reduce permanent staffing. In December computer and data processing services employment was up 6.8 percent, or 1,100 workers from year ago. And building maintenance services employment was up 7.6 percent, or 1,000 workers.

David Dahl