Volume 8, No. 3
Fall 2002

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The Economy is Growing But The Labor Market Has Yet To Rebound

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Personnel Supply Industry Suffers After Years of Prosperity

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Personnel Supply Industry Suffers After Years of Prosperity

By Yolanda Y. Harris

After experiencing several years of growth and prosperity, the temporary help industry - one of the nation’s leading indicators of economic growth - has suffered a great loss in the latest economic downturn.

When the recession started last March, employment in the personnel supply industry, including jobs from employment agencies and temporary staffing firms, totaled 181,000 jobs in Illinois. As of August of this year, employment in the industry totaled 169,800 jobs.

“It’s definitely been a challenging two years,” said Lana Johnson, president of the Illinois Staffing Association, which represents about 100 staffing agencies in Illinois. “As companies have sought to cut their costs, they’ve looked at temp staffing as a place to start,” said Johnson, who is also senior vice president of Advanced Personnel, Inc.

Nationwide, the staffing industry lost 360,000 jobs in 2001, according to a quarterly survey conducted by the American Staffing Association. Because temporary jobs have permeated a variety of industries, job losses within these industries directly impact job decline in the staffing industry.

Advanced Personnel, ranked by Crain’s Chicago Business in March as Chicago’s fourth largest staffing firm, provides temporary and permanent placement in accounting, finance, medical and clinical research and information technology. Johnson said that her firm’s placements in the health sector remained steady, while placements in information technology were affected by the recession. Nevertheless, Johnson said, “…we had enough flexibility to adjust our strategy and remain profitable.” “While we definitely felt the impact, we’re able to focus on the future.”

The temporary help industry is a leading economic indicator because it tends to be the first pool from which employers hire during a recovery as they test the viability of the economy and their business. Though no immediate signs of a turnaround in the temporary help sector are in sight in Illinois, Johnson said she expects a gradual upswing. “As the economy turns around and as companies have more money to spend, they look to temporary staffing to fill in the gap,” Johnson said.

In the long term, the Bureau of Labor Statistics projects that the personnel supply industry will be the nation’s largest source of numerical employment growth. The industry is projected to grow 49 percent, by adding 1.9 million new jobs by the year 2010, bringing total employment in the industry to 5.8 million jobs.