The modern temp industry began in a simple office in Detroit in 1946, where a businessman named William Kelly hit upon the idea to loan one of his typists for a day, billing a local company $6.75.
Today, Kelly Services has grown into a staffing giant that arranges employment for about 530,000 people a year. The industry, meanwhile, generates global revenue of $269-billion and hires out a range of workers that now includes nurses and accountants, oil workers and chief executive officers.
Weak business confidence coming out of the global credit crisis is playing a major part in keeping jobless rates at painful levels – U.S. unemployment is nine per cent while Canada is stuck above 7.5 per cent in large part because companies are wary of hiring long-term. As a result, more companies are turning for help from services such as Kelly’s, and the industry says the labour landscape is being permanently reshaped as employers streamline their operations to survive in a post-recession world.
The three largest in the industry – Adecco SA, Randstad Holding and Manpower Inc., along with Kelly Services – topped analysts’ forecasts in the first quarter of 2011. In Canada, Randstad, the country’s largest staffing firm, and rival Manpower say activity has picked up since the recession ended. Both are expanding their range of business services to meet demand.
“There’s a lot of potential here,” Randstad Canada president Jan Hein Bax said in an interview. “The companies that demand more flexibility in their work force, those companies will grow ... and you also see a lot of candidates who want more flexibility, so both are very compatible. We’d like to play a role in meshing the two.”
As a result, the industry is booming in Canada: Statistics Canada estimates that revenue has surged to $8.7-billion in 2009 from $1-billion in 1993. Companies such as Randstad are seeking a greater role in Canada in everything from advising governments on future work force planning to taking over corporate HR functions and negotiating with unions to create a more flexible work force.
“Our ambition is going further,” said Mr. Bax, who took over his post in Canada in January after running Randstad’s operations in Spain, where the company had regular contact with unions and government. “We’ve got a lot to bring to the market. Have we done that in the past enough? We should strive for more, and that’s on my agenda.”
Canada’s employment-services industry is mostly temporary staffing along with permanent placements and contract staffing, according to Statscan. Revenue has climbed steadily in the past decade, and employment in the sector has jumped six per cent in the past year alone, to 158,000 people.
But as the industry grows around the world – staffing firms are expanding in Europe and in emerging markets such as India and China – there’s an intensifying debate over the merits of an increasingly fluid work force. Proponents say it helps both employers and workers be nimble in globally competitive markets; opponents argue it’s part of a shift toward precarious, lower-pay work.
Temporary workers tend to earn less than permanent staff, they get little or no benefits and many can be fired without notice. The earnings gap between a permanent and a contract worker is about 13 per cent, while between a permanent and casual worker the gap is about 34 per cent, Statscan figures. The disparity persists even after the agency adjusts for demographic differences like education levels, immigrant status and gender.
Olga Cordeiro has seen a proliferation of contract jobs on offer, particularly since 2008. She has worked for six different temp agencies since the 1980s in accounting, administration and research, and some positions morphed into permanent placements. She loves the variety, training opportunities and sense of completing projects.
