Record reliance on temporary employees in the U.S. will be a help for the companies that provide them, according to Mark S. Marcon, a Robert W. Baird & Co. analyst.
As the CHART OF THE DAY illustrates, last month’s employment report showed interim help represented the largest proportion of the workforce since at least the 1980s, according to data compiled by the Labor Department.
Staffing companies accounted for 2.06 percent of nonfarm payrolls, or 2.86 million workers, in May. The percentage rose for the 19th time in the past 20 months, with last October as the lone exception, and set a fourth straight monthly record.
“Temp help services growth continues to materially outpace overall employment growth,” Marcon wrote in a report three days ago. The number of employees increased 8.5 percent last month from a year earlier.
The percentage, or penetration rate, was among more than a dozen indicators that the Milwaukee-based analyst cited in his research. As a group, they pointed to “continued solid growth for temp and recruiting services,” he wrote.
Marcon recommends buying shares of ManpowerGroup Inc. and Robert Half International Inc., the two largest U.S. staffing companies by market value. He also has the equivalent of buy ratings on Kforce Inc., Korn/Ferry International and On Assignment Inc.