American Staffing Association - Staffing Success Special Issue

The administrations of both presidents Bill Clinton57 and George W. Bush58 cited the staffing industry as an important contributing factor in creating jobs and reducing unemployment in the past two decades.

Economists Lawrence Katz of Harvard University and Alan Krueger of Princeton University studied the dramatic drop in the unemployment rate in the 1990s. They concluded that the growth of the staffing industry had the greatest impact—up to 40%—in reducing the unemployment rate. They argued that staffing firms, as labor market intermediaries, improve the efficiency of matching workers to jobs.59

On a smaller scale, staffing firms provide immediate employment—and (taxable) real income—for workers and, for those seeking permanent jobs, a bridge to that end. In the ASA survey of more than 13,000 staffing employees, six in 10 respondents said they took a temporary or contract job as a way to get a permanent job. And a majority said temporary or contract work made them more employable because they could develop new or improve existing work skills, gain on-the-job experience, and strengthen their résumés.60

The expanded use of temporary and contract workers may also have enhanced U.S. productivity, according to Chris Varvares, a Macroeconomic Advisers economist, by making it easier for businesses to adjust their work forces as the economy changes. U.S. productivity trends have changed dramatically in the past decade. A productivity boom in the late 1990s has proven to be unexpectedly enduring. On a year-to-year basis, productivity has not declined since 1995. In the 1970s and 1980s, it contracted for long periods around recessions.61

Jobs, flexibility, bridge to perma-
nent employment, choice of alterna-
tive employment arrangements, and
training—these are the benefits staffing
firms offer to today’s workers. Flexibility
and access to talent—these are the bene-
fits staffing firms bring to business clients.
And jobs, labor market flexibility, efficient
bridging to permanent jobs, training,
lower unemployment rates, and enhanced
productivity—these are the benefits
staffing firms bring to the economy.

Industry Outlook

The U.S. staffing industry is expected to grow faster and add more new jobs over the next decade than just about any other industry, even taking into account the Great Recession.

The employment services industry— which is primarily staffing—will be the ninth largest job-growth industry in the U.S. from 2008 through 2018, according to the most recent BLS projections, released in November 2009 (see Figure 23).62

While BLS foresees total employment
growth of 10% in that period, it projects
nearly twice that rate of job growth—more
than 19%—in the employment services
industry. “The demand for temporary help
services is expected to generate much of the
growth,” BLS said. “These services include
the placement of temporary workers and
those with specialized skills, such as health
care staff needed to meet the needs of
aging baby boomers.”
BLS developed the projections during
the recession and before the nonfarm
employment trough hit bottom. The
agency notes that its assumption of
a full-employment recovery accounts
in part for its projected faster, above-
average growth rates.63