August marked the third straight month that temporary U.S. employment declined, falling by 6.1% year-over-year. This is the largest year-over-year decline in the past eight years, excluding April 2020 to December 2020, which was the height of the pandemic.
Total employment increased 2% year-over-year in August, signaling that companies are moving away from temporary employees and focusing more on permanent hires.
It’s no wonder some publicly traded firms that are heavily focused on temporary U.S. staffing reported recent revenue losses, according to Bloomberg.
These firms and others with a similar business strategy could see some reprieve in the short term as we approach the holiday season. Temporary employment during the holiday season has historically outpaced total employment, as shown above.
Some observers say inflationary pressures and high interest rates may cause Americans to spend less than usual during the holiday season this year. But that certainly wasn’t the case during one of the country’s most uncertain times in recent history: the pandemic. Therefore, expect companies—particularly retail companies—to bolster their temporary workforces for the next few months.
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While the holiday season may allow firms to recover their recent financial losses, we expect the increased focus on permanent hires to persist in the long term, given the rise of artificial intelligence and attempts to pair it with workers to maximize efficiencies and margins. Companies that adopt this strategy aren’t looking for temporary workers to supplement the sophisticated technologies being put into place.
