Temporary Help Employment in Recession and Recovery

Upjohn Institute Working Paper No. 15-227

58 Pages Posted: 13 May 2015 Last revised: 12 Jun 2015

See all articles by Susan N. Houseman

Susan N. Houseman

W.E. Upjohn Institute for Employment Research

Carolyn Heinrich

Vanderbilt University; University of Texas at Austin

Date Written: May 12, 2015

Abstract

The temporary help industry, although small, plays a significant role in the macro economy, reflecting employers’ growing reliance on temporary help agencies to provide flexibility in meeting staffing needs. Drawing on detailed temporary-help order data between 2007 and 2011 from a large, nationally representative staffing company, we provide insights into the characteristics of temporary help work, employers’ use of temporary agencies to screen workers for permanent positions, and the industry’s role in labor market adjustment over the business cycle. We estimate that the temporary help industry accounted for a large share of gross job losses and job gains over this period, as well as for a sizable share of net separations and hires. Nearly a third of assignments were observed to end prematurely due to worker performance problems (largely soft skills deficiencies) or quits, and hire rates of workers in temp-to-hire contracts were low. Although most temporary help assignments are short-lived, during the recession, companies lengthened temporary help assignments and reduced hiring from their pool of temps, possibly in response to economic uncertainty. Nominal wage growth among new temporary hires was weak over the five-year period and failed to keep pace with inflation.

Keywords: temporary help employment, business cycle

JEL Classification: J23, J21, J49

Suggested Citation

Houseman, Susan N. and Heinrich, Carolyn, Temporary Help Employment in Recession and Recovery (May 12, 2015). Upjohn Institute Working Paper No. 15-227, Available at SSRN: https://ssrn.com/abstract=2605512 or http://dx.doi.org/10.2139/ssrn.2605512

Susan N. Houseman (Contact Author)

W.E. Upjohn Institute for Employment Research ( email )

300 South Westnedge Avenue
Kalamazoo, MI 49007-4686
United States

Carolyn Heinrich

Vanderbilt University ( email )

2301 Vanderbilt Place
Nashville, TN 37240
United States
615-322-1169 (Phone)

HOME PAGE: http://peabody.vanderbilt.edu/bio/carolyn-heinrich

University of Texas at Austin ( email )

2315 Red River St.
Austin, TX 78713
United States
512-471-3200 (Phone)

HOME PAGE: http://www.utexas.edu/lbj/directory/faculty/carolyn-heinrich

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