Temp, contract staffing jobs fell to 'Great Recession levels' in 2020, but are on the rebound, report finds

Dive Brief:

As a result of the coronavirus pandemic, temporary and contract staffing jobs fell to "Great Recession levels" in the second quarter of 2020, but rebounded in the second half of the year, according to American Staffing Association data released March 11. The dip followed "near record highs posted in 2019," the association found.
Staffing companies in the U.S. employed an average of 2.5 million temporary and contract workers per week throughout 2020, which was down 19.5% compared to 2019, according to the report. There was also a downturn in the total of annual staffing employment sales — $122.3 billion, 10.5% less than in 2019. As states began to shut down to prevent the spread of the coronavirus in the second quarter of 2020, staffing employment declined by more than 1 million jobs, the report found.
However, the industry soon experienced an upswing in the third quarter with average weekly staffing employment increasing to 2.3 million compared to 2.1 million in the second quarter. In the fourth quarter, it climbed to 2.8 million. Overall during the pandemic, staffing firms hired a total of 13.6 million contract and temporary employees, with "an average length of employment with a staffing agency at 9.6 weeks," according to the report.

Dive Insight:

Temporary employment was predicted to outpace wider job growth in the U.S prior to the pandemic. And the onset of the pandemic initially created demand for temp workers, but financial uncertainty caused a slowdown in hiring, according to the Palmer Forecast published Oct. 8.

The report, published by G. Palmer & Associates, found the slowdown pointed to factors such as the uncertainty of a second round of stimulus checks and the anticipation of an additional bailout for business impacted by the pandemic, Greg Palmer, founder and managing director of the firm, said in the report. However, gig workers in essential industries remained in high demand. For example, Instacart announced in March 2020 plans to hire 300,000 additional full-service shoppers. In April 2020, the company announced plans to hire 250,000 more shoppers.

But it appears that in 2021, staffing companies will receive more business, according to Richard Wahlquist, American Staffing Association president and CEO.

"While the pandemic took its toll on the economy in 2020, many staffing companies are reporting continued increases in demand for temporary and contract workers in the first quarter of 2021," Wahlquist said in a statement. "Workplace disruption caused by the COVID-19 pandemic has put an even higher premium on the need for more flexible and inclusive workforce solutions."