September 20, 2009 in Business

TEMP MARKET IS HEATING UP

In a sign the economy may be stabilizing, companies are bringing back temp workers
By The Spokesman-Review
 
Jesse Tinsley photo

Rodney Reese, left, a lead press operator at Century Publishing in Post Falls, stacks a brochure being run on the giant printing press Wednesday. Reese was laid off in a major reorganization at the company, but brought back as a temp employee when his skills were needed again. The temp route is called payrolling, keeping employees working on a temporary basis until the company decides to put them back on the regular payroll.
(Full-size photo)(All photos)

The economy may be teetering forward or still struggling, depending on the economist you consult. But one business indicator does show signs of positive growth — the number of temporary workers being hired by Spokane employers.

But like all things in the economy, even that number is not a positive indicator. And while Spokane County has seen an uptick in the number of temp workers getting jobs, that pattern isn’t occurring in Kootenai County.

Nonetheless, people tracking the ups and downs of economic data keep an eye on temporary workers — the people hired through staffing companies, which pay the worker and collect a fee from the employer as a small bonus.

“At the national level one of the first signs that a recession is ending is employment,” said Kathryn Tacke, a state labor analyst who tracks job totals for the northern 10 counties of Idaho.

“When times get better, the first thing a lot of employers do is offer more hours for (existing workers). And the next thing is to bring on temporary workers,” she said.

Spokane has seen temp hiring go from 2,450 in June up to 2,900 in August. In Kootenai County, it has dropped from 823 temp workers in the first quarter 2009 to 758 in the second quarter, Tacke said.

That decline, she added, “definitely is an illustration of the problems in the manufacturing sector.”

Kootenai County’s jobless rate last month was 10 percent, close to double what it was — 5.8 percent — one year ago.

Spokane County’s jobless rate in August was 8.5 percent.

The growth in hiring temp workers in Spokane is not a dead-sure indicator of recovery, noted Doug Tweedy, the state regional labor economist for Eastern Washington.

Job demand varies within different sectors. Even one or two new orders with two area manufacturers could spike the number of temporary workers needed, Tweedy said.

Management philosophy is also inconsistent about temp workers; some companies want to use them to deal with sudden increased orders. Others, especially if they require skilled labor, steer clear of temps, he said.

“And seasonality is a factor in how many temps come into the workplace,” said Tweedy.

Even so, it’s numerically clear that Spokane employers in the past three months have started taking on more temps.

Two Spokane staffing companies, Humanix and Robert Half International, are seeing clear increases locally in hiring of two types of workers: regular temps and the variant called temp-to-hire.

Those signs of recovery are in manufacturing, administrative support and finance/accounting, said Nancy Nelson, owner and president of Humanix.

Dee Kirklin, the Spokane director for Robert Half’s Spokane customer service employment division, said she’s seen a solid uptick in temp hiring locally.

“It’s a combination of companies getting back some business and hiring, and it’s companies also who cut back too much and they’re now using temps to handle their work,” Kirklin said.

Her division, and Robert Half’s professional staffing group, Accountemps, has seen a boost in the number of area employers using the temp-to-hire method to fill a need, division director Dianne La Valley said.

With temp-to-hire, a company intends to make the temp worker a full-timer eventually. “It’s a try-as-you-go method,” La Valley said. If the worker leaves or is let go, the staffing agency has to take care of unemployment, not the employer.

Nelson, at Humanix, said another variation on the temp-to-hire path is called payrolling. It involves a company asking an employee that it laid off to go through an employment agency. The plan is for the company to bring back the worker but use the agency as a transition step as it regains customers. Century Publishing, a Post Falls high-quality printer, used payrolling to bring back four of its workers that were laid off earlier this year.

The company relied heavily on printing real estate publications for Western U.S. real estate brokers. Once the housing market sank, much of that work dried up, said Craig Rogers, now the company president and chief operating officer.

The owner, Georgia-based Endurance Media, moved most of the remaining work to Florida. More layoffs followed, cutting Century’s work force from 75 to 25, Rogers said.

Among those cut in February was Matt Carpineta, one of two technology managers at the firm. He had worked for Century for 10 years.

By then, Rogers and David Risdon began the process of buying Century from Endurance Media and running it as an independent company. One of their first steps was to implement lower rates for customers to attract new business. It worked.

“We got a good deal of work and for a while we were a lean, hard-working operation,” Rogers said.

But the company didn’t want to hire full-time workers until business seemed solid.

Rogers decided to work with Humanix, which had done payrolling for Century several years ago. Four former workers, including Carpineta, were contacted and told they would likely get their jobs back – after they go through Humanix as temps, Carpineta said.

Two months ago, he was rehired full time in the same job he had before.

Nelson said many employers find payrolling a key part of managing spikes in workload. “They get a person they don’t have to train; the worker knows the job. And if (work sags) and they need to lay them off again, the company doesn’t have to pay the unemployment costs,” she said.

It’s also an appealing option for most workers, she said. “It’s not like they feel bad about being (sent back through an agency),” added Nelson. “Workers who get let go are not angry and blame the employer for that. They know no one wanted to have to do that.”

When Carpineta was told he would be brought back, it validated his worth and told him the company knew he was still the right person for that job, he said.

It didn’t bother him to have to move back to his job through a temp agency. “No, my only concern was the uncertainty of the future. In this case, I think Humanix was just a link in the chain to get me back in here.”

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