R. A. Cohen Consulting Newsletter

According to many industry experts Staffing is both a growth industry and a cyclical industry. Looking over the last several decades from its beginnings (some say the early 1900's, others say the 1940's) however, certainly virtually since its maturation in the 1970's, it has been a consistently utilized business tool by employers to:

·      Balance staff needs to workload fluctuations;

·      Deal with employee absences:  illness, vacation, maternity,     disability leave or sudden departure;

·      Handle unexpected or temporary demands:  special projects, seasonal or peak periods, employee shortages;

·      Maintain staffing flexibility;

·      Fill in until a Direct Hire is made;

·      Locate specialized skills that are needed for new technology;

·      Save time and money.

If one examines the performance of the industry over these decades, one would notice in almost each ten year period, there have been approximately 6 strong years of growth, 1½ years of no growth, or more likely losses from previous periods, and 2½ years of recovery, (with low growth or small losses) although not exactly in the order above.

For instance in a ten year period, one may have 3 growth years followed by a 1 slowdown year with losses and 1½ years of recovery followed by another 3 years of growth and a ½ year down followed by a year of recovery.

This pattern while it varies specifically within each decade will show approximately 6 years of growth and 4 years of cyclicality in every ten year period. Indicating why staffing is both a growth and a cyclical industry. The key is to recognize the cycles and prepare to make the best of what is coming ahead. Fortunately we now seem ready to embark on 3 years or so of fairly solid growth.

Some Key Indicators

·      Employment in manufacturing in February 2011 was at the highest level since March 1973;

·      Growth was also higher in non-manufacturing areas such as services;

·      Initial unemployment claims have shrunk to about 400,000, a level many experts consider ideal for full employment. Plus  these lower numbers were created by job growth, not unemployed people giving up;

·      These signs bode well for moderate economic growth, employment numbers are not booming yet, but moving upward, in the right direction;

·      Unemployment levels are down to 8.8%, lowest in 3 years;

·      Poor weather around the country hurt Q1 employment levels, however growth was still good;

·      In March 2011 over 200,000 jobs were created and the good news was the private sector was up over 230,000 jobs and the public (government) sector was a negative contributor to the new jobs level;

·      Overtime levels were up in March which often responds to a temporary staffing solution to lower overtime costs;

·      The temporary employment penetration rate was up to 1.73 but still behind historical highs, leaving room to grow;

·      Hiring of college grads is up adding to the overall labor force growth;

·      According to Staffing Industry Analysts (SIA) recruiting is equally as challenging as obtaining new sales, which could be an ideal scenario for the industry since there is still a strong need for our services;

·      Temporary employment up more than 50,000 jobs since January; most economic indicators are up for our industry.

Projected growth in 2011 and 2012 by SIA

          *(Healthcare IT expected to be a big driver of growth)

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