The move toward hiring temps for permanent positions
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Kai Ryssdal: What we have with today’s October unemployment report — almost three full years after the economy started losing jobs — is what you can safely call sustained, although modest, job growth at private companies. As I said, 151,000 new jobs in October, nearly all of them in the private sector.
The unemployment rate didn’t budge, though. It’s still 9.6 percent. That number might not go down for a while, because of the huge backlog of people out there still looking for work. Although job growth over the past several months has come in better than a lot of people were expecting, the story of this morning’s report is hiring and how companies are still kind of leery about it.
Here’s Marketplace’s Mitchell Hartman.
Mitchell Hartman: Since mid-summer, private companies have been hiring more than 100,000 new employees a month. Economist Gary Burtless at the Brookings Institution says that’s good, as far as it goes.
Gary Burtless: It’s still moderate job growth overall. It’s about what is needed to keep us from sinking into a deeper hole.
There are still millions of people laid off in the recession who aren’t finding their way back to work. And many of those who are, are coming back as temps. Last month, one out of five new jobs was temporary.
Matt Edgar: Well, we currently have three full-time employees, and the position we just hired was a driver.
Matt Edgar owns Liberty Fleet Services, a flatbed-rental company in Houston. He hired that worker as a temp when business started to pick up this summer.
Edgar: He fit really well, and in October we thought we could add another person, so we did.
A full-time person. That’s just how the temp-to-permanent job model is supposed to work. Problem is, says Gary Burtless, it’s not working that way often enough.
Burtless: Hiring a temporary worker instead of a full-time permanent worker is usually a cheaper alternative that doesn’t commit you to as much future cost.
Some employers are ready to commit, though, especially in fields like health care and technology, where growth has been strong.
Jeff Gale: I kind of have a feeling it’s now or never for my company.
Jeff Gale has 20 employees at his Birmingham, Ala., company that handles online ticket sales. He’ll hire eight more by early next year. Competitors are growing and snapping up talent, so Gale says he has to do so as well.
Sam Blackman of Elemental Technologies, a video software company in Portland, Ore., feels the same way.
Sam Blackman: We can hire tremendous people that we may not have access to in a normal, strong economy. And at very reasonable compensation.
And at least for a while, they shouldn’t be too hard to find.
I’m Mitchell Hartman for Marketplace.
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