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Research Report

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As the national economy inches toward recovery, risk-averse employers are increasingly turning to temporary workers to fill their hiring gaps. In fact, the temporary staffing industry has been a fixture of the US economy for decades. But the industry added a striking 557,000 jobs from June 2009 to November 2011 — more than half of the jobs created during that period. Growth is likely to continue: A 2011 McKinsey survey of 2,000 firms of differing sizes and across various sectors found that more than a third foresaw their companies increasing their use of temporary workers over the next five years.

The bulk of these temporary workers are employed by for-profit temporary staffing firms that recruit and screen candidates for assignments, as well as handle payroll and a few supervisory duties. These firms supply workers for a sizable share of the low- and semi-skilled, entry-level job openings across many diverse sectors, including blue-collar manufacturing, office/clerical, healthcare and IT.

Workforce development practitioners — who aim to help those with barriers to employment get and keep jobs — have been struggling to make sense of what this growth in the temporary sector means for their clients. While research examining the effects of temporary jobs on subsequent employment and long-term earnings is mixed, such jobs are likely here to stay.

It seems clear that temporary staffing firms will play an increasingly large role in filling the type of job openings that workforce programs often target for their participants. How can program staff navigate this labor market phenomenon? This brief describes the work of “alternative staffing organizations” (ASOs), which seek to mitigate some of the more troubling shortcomings of the temporary employment industry (see “Opportunities, Risks and Dangers of Temporary Jobs” on the next page) with the goal of improving the employment prospects of the most vulnerable job seekers.



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