A Publication of WTVP

It's generally accepted that the inception of temporary staffing occurred during World War II, when women left the home and entered the workforce-primarily America's factories-in droves. Actually, there are many previous examples of "day labor," but companies dedicated to the industry didn't form until the late 1940s. Conventional wisdom says this occurred after the war ended, when many of the women opted to stay in the workforce, though relegated to "fill-in" when someone was ill or on vacation.

This phenomena spawned several firms. In the late 1940s, Kelly and Manpower began supplying contingent white- and blue-collar labor needs, while Robert Half focused on contingent accounting labor needs. These firms responded to a need, and the resources they created provided U.S. corporations and workers with additional flexibility. Though most companies at that time only used temporary staffing as a reaction to need, the industry of temporary staffing was born.

During the 1950s and 1960s, additional players saw the concept working and entered the industry. This was also the time when franchising began to take hold. The main reason staffing firms turned to franchising was to fuel their national expansion. The model played a significant role in the development and success of many staffing companies through the 1970s. The trend, then, reversed itself in the 1980s and 1990s, when corporations decided to buy the franchises back.

Another major change from the 1980s occurred when businesses saw the staffing industry as an opportunity to build the resources into their strategies to improve competitive advantage and reduce cost. Couple that with the phenomenal growth of personal computer technology within U.S. corporations, and it's easy to see why the number of temporary staffing companies doubled in the 1980s. That's also why the industry was one of the defining features of the 1990s economic expansion.

From 1982 through 1998, the number of jobs in the temporary staffing industry rose by 577 percent, or approximately 25 percent of all new jobs created during that time period. Staffing firms responded quickly to fill demands in new areas. Niche services entered the staffing industry in droves, providing IT, engineering, full department outsourcing, independent contracting, nursing, on-call workers, etc. By 2000, 3.6 million workers were placed by the temporary staffing industry.

The industry was hurt when the and Y2K bubble hit. However, the concept behind staffing firms hasn't changed. After three years of economic turmoil, U.S. companies and institutions still demand a flexible workforce that can instantly react to economic whims and the cyclical nature of business. This labor flexibility is widely regarded as a hallmark of the new economy. Today, corporate America typically uses such workers to meet 12 to 20 percent of its manpower needs, from the mailroom to the CEO.

Recent signs show a recovery is taking hold, indicated by, among other things, the staffing industry. Temporary employment is a reliable leading economic indicator because temporary and contract workers are used across many industries and job categories. When business picks up, corporations rebuild the workforce utilizing temporary or contract workers until they're convinced demand will pick up enough to justify hiring full-timers. Hopefully, the signs are correct.

So, what does the future hold? That's another article altogether. IBI