We started with a grim look at the sheer impact of the recent recession in comparison to the previous recessions. Basically, they described it as " the worst recession since World War II; some say worst since Great Depression". Wow. We survived a cumulative decline of 5.1% in GDP. The previous worst decline was -3.7% in 1957. The charts and graphs to illustrate this story really put things into perspective to me. 8.7 million jobs disappeared and 44% of unemployed people have been without work for more than 6 months. I was happy to still have a job, my car, my house….many others did not fare so well.
So, are we out of it? Hard to tell. The American Staffing Association reports that "at the pace of job growth in the first half of 2011, nonfarm employment will return to its 2007 prerecession peak at the end of 2016". They also report that the Wall Street Journal estimates that – at the current pace of job growth and labor force expansion, the unemployment rate would still be near 9% in June 2012, 3 years into recovery and would remain above 5% until December 2024.
So, what is the current view of Staffing and the Economy? According to the ASA, the staffing and recruiting industry is "hyper cyclical" meaning its business cycle tends to be exaggerated during economic expansions and contractions. They also state that "Staffing employment is a conincident economic indicator and a leading employment indicator". What does all of this mean? Based on the extensive research and data collected by the ASA for their reporting, the trends show that changes in temporary help employment precede changes in nonfarm employment by one to two quarters and overall, is a solid indicator 3 to 6 months forward of where the economy is headed.
Now the good news. The Staffing industry is currently demonstrating and projecting steady growth through 2012. Not huge growth, but at least it is not a decline. As a leading indicator, this is much better news than looking at the graph with a line that continues to decline. Does this mean we are out of the grip of the recession? Not yet. There are many realizations that employees and employers need to stay focused on to ensure that as jobs grow, we are ready with the right skills and education required to fill these needs. Currently, job growth is concentrating in high-skill, high-wage jobs and low-skill, low-wage jobs. Those with college degrees are earning 95% more than high school graduates. Middle-skill white and blue collar jobs were hit the hardest. The sectors with the greatest potential for job creation appear to be consulting and business services, constructions, health care, leisure and hospitality, manufacturing and retail.
Staffing companies will play a key role in the future of economic growth by helping businesses identify and secure talent when needed in an efficient and economical way. Good information to have and important information to consider as companies develop their long term strategies on where and how to get the skills they need when they need them. Read more about this topic on the ASA website here.