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Reluctance to Make Temps Permanent Speaks to Ongoing Uncertainty

December 20, 2010

A New York Times article looks at the increase in temporary employment and how many employers are still reluctant to make any of those temporary workers more permanent. The article asks the question: Will temporary workers become a larger part of the work force going forward? While some economists say that growth in temp employment is a sign we are moving toward growth in full-time employment, some in the article say they like the flexibility that hiring temporary workers provides.

What's next? 2011 Economic Forecast for Manufacturing and Construction

The author of the article says another factor may be an increase in short- to medium-term projects that can easily be given to temporary or contract workers. It cites the experience of a machine tool manufacturer, Makino, in Ohio. The CEO of the firm plans to raise Makino's temporary work force from 10 to 15 percent of the total to about 25 percent in the future. He tells the New York Times that he can appoint a full-time supervisor to oversee less skilled short-term workers for smaller projects.

The share of new jobs taken by temporary workers is higher than in the previous two recoveries, according to the NYT.

This report speaks to the ongoing uncertainty many are feeling as we move into 2011. While distributors in many sectors are telling MDM that they have seen double-digit sales growth over the past year, many are still reluctant to hire not knowing what's next. Indeed, another report from the Wall Street Journal says demand for recruiters is up ... which may indicate plans to increase hiring over the next year but also conflicts with other reports that show employment gains remain "spotty."

Take care when making hiring decisions – as George Herrman, EVP of Right Management (part of Manpower), told The Salt Lake Tribune recently, employees are at risk of burnout. He said: "Even though employees may have a job while so many people are out of work, they're disgruntled – weary of heavy workloads, cost-cutting, scant opportunity for advancement and skimpy raises or bonuses, if any. … it's no longer good enough for the boss to say, 'You're lucky to have a job.' What we're entering is new territory, where old assurances or excuses don't work."

What are you doing to make sure your employees continue to be engaged and productive in this recovery?

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