Article published November 12, 2009
Rise in hiring temps may signal a rebound in Toledo-area job market
By LARRY P. VELLEQUETTE
BLADE BUSINESS WRITER
For measuring the job market, temporary employment agencies are the proverbial canary in the coal mine: the first to know when economic dangers loom, and the first to know when that danger has passed.
Now, job placement agencies say they are starting to smell the first whiffs of fresh air returning to the local employment market after years of stagnation, but they point out there are still lots of applicants for every open job available.
"We're seeing a tick up in [placement] activity," said Bruce Rumpf, chief executive officer of Toledo's Job1USA, which has offices nationwide. "We have a little bit of optimism."
Nationally, temporary-worker payrolls rose by 34,000 in October, the third consecutive monthly increase and the biggest gain in two years, the Labor Department reported this month.
All payrolls fell by 190,000 workers, and the unemployment rate jumped to a 26-year high of 10.2 percent.
Toledo's jobless rate stood at 12.1 percent in September, the most recent month available, with 16,700 people officially on the jobless rolls.Lucas County's unemployment rate was 11.3 percent, with 24,400 people looking for work.
Both figures are down significantly from June, when the county and city jobless rates stood at 14.6 and 15.6 percent, respectively.
Temporary workers are "a way for companies to dip their toes in the water," Neal Soss, chief economist at Credit Suisse in New York, said. "If firms are willing to do that, it tells you that they're feeling a little better about their business prospects, and that's the beginning of something."
Overall employment typically increases three to six months after gains in temporary staffing, Steve Berchem, vice president of the American Staffing Association, said, drawing on more than 30 years of research.
George Sabback, who works locally for the Adecco Group, said the local offices of the global contract employment giant have experienced "an uptick in the sheer number of people going out on assignments."
Anecdotally, manufacturing seems to be experiencing some slight rebounding, as are requests for placements in small office settings, he said.
"Some customers did away with all of their contract labor for the early part of this year, then 30 or 45 days ago, they started dangling their toes back in the water for us," Mr. Sabback said.
"We're starting to see an increase in some activity," said Michael Veh, work force development manager at The Source, Lucas County's one-stop center to help the unemployed. "It's not time to go out and celebrate, but we are starting to see little bits of positive activity."
His office has received an increasing number of calls from small businesses using the county's free service who "are afraid of getting swamped" by applications and resumes if they posted jobs commercially, he said. Still, he said, job seekers still far outpace available openings.
One study, by Juju.com, a Web site which tracks job openings, shows the Toledo area has about 12 job-seekers for every opening, a ratio high enough to be equivalent to the Top 50 large metro areas nationally.
"If someone has [an open] job paying $25 an hour, they're going to get a million applicants," Mr. Veh said. "Things don't sit for very long."
Rebounding businesses often will use temporary personnel during the first stages of a recovery to keep their cost exposure down in case the recovery isn't sustained, Mr. Rumpf explained.
He said that placements in this quarter at his company could rise as much as 20 percent over the same period a year ago, and if that happens, it would be the first quarter in almost three years to show an increase.
"Not a big start; just a small start. But I do feel we have hit bottom and are starting to recover," he said.
The Blade's news services contributed to this report.
Contact Larry P. Vellequette at: lvellequette@theblade.com or 419-724-6091.
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