Temporary staffing agencies are playing an important role in providing temporary workers/employees for companies who experience seasonal work demands and unexpected workloads. By hiring the services of temporary staffing agencies companies are getting benefits such as cutting down on the need to pay overtime to permanent employees along with indirect costs such as recruiting costs to be incurred for placing advertisements, cost of conducting interviews, skill assessment tests and opportunity cost of sorting through numerous resumes and applications. Companies are also able to save costs on the training of new employees as temporary staffing agencies provides ready made flexible work force.
The employment in temporary help services as per the data of Bureau of Labor Statistics (BLS) grew by 40,000 in December-2013. Overall, in 2013 the temporary staffing industry added 248,000 jobs compared to 174,000 jobs added in 2012. The U.S. temporary jobs penetration rate has now reached 2.06% and this rate is higher than the previous all time mark of 2.03% set in April-2000. The temporary staffing utilization is up by over 8% in 2013 with that number expected to be exceeded in 2014 with more and more small and mid-market companies getting in the mood of hiring contract work force.
With the present Gross Domestic Product or GDP numbers being strong, the sales growth of temporary staffing agencies is expected to rise by at least 18%. For instance, leading staffing agency – Robert Half International has earnings per share quarterly growth rate of 17.01%. In addition, the rolling out of Affordable Care Act or Obama care has resulted in more business taking the help of the temporary staffing agencies. The staffing companies are expected to prosper with Obama care having new insurance requirements for companies with more than 50 employees. Under this act, companies under which employees who work 30 hours a week have to be provided with health insurance that would result in expensive health insurance mandate that has forced firms backing off hiring full time employees.
Obama care has been an absolute boon for temporary staffing agencies with some of them showing a growth of about 8% during 2013. Firms are not inclined to hire full time workers and therefore are taking the help of temporary staffing agencies. It is expected that the temporary staffing industry would continue to reward their shareholders irrespective of the size of the economic recovery in the United States.