Contingent employment in California—employment outside of the traditional employer-employee relation—has been growing for more than two decades in California. This growth has included increases in independent contractors, self-employment, employment leasing, and most of all, in staffing employment, which regularly totaled over 420,000 payroll jobs in California until this Great Recession.
The chart below compiled with the assistance of Mr. Spencer Wong of EDD, shows the changes in staffing employment from October 2001 through October 2009. Staffing company employment in California—both jobs within the staffing companies and jobs in client companies—is included in the “Employment Services” sub-sector category of the EDD monthly labor reports. Since the sub-sector numbers are not seasonally adjusted, the chart below focuses on the same month, October, for each of the following 9 years.
During this time, staffing employment has followed the job growth and declines in the general state economy. Staffing employment grew until the dot.com bust of March 2003, and then again during the economic expansion in the state from 2003-mid 2007. Since early 2007, staffing employment has fallen, reaching a low of 304,4000 jobs in April 2009. Since that time, staffing employment has grown slowly reaching 323,.100 jobs in October 2009 and 331,600 jobs in December 2009.
Staffing employment is sometimes described as the canary in the coal mine, the harbinger of employment activity. Staffing employment has picked up slowly in the past months, but still remains far below job levels of late 2006 and early 2007.
Mainstay Business Solutions, headquarted in Folsom, California, is one of the main California-based staffing companies. Owned by the Blue Lake Rancheria tribe, Mainstay has offices throughout the state, from Eureka to Fresno to Riverside. Mainstay is headed by Mr. Eric Ramos, a member of the tribe. It has been employing an average of around 10,000 workers each month. Mainstay specializes in light industrial assignments.
When asked about the current condition of staffing, Mr. Ramos commented, “Over the past 30 days, we have seen surprising growth, mostly new clients who need more help, but use temporary staffing until they are confident about permanent internal hiring. That may indicate the recovery has started and we are headed in the right direction.” Mr. Ramos further commented, “We have seen a marked uptick in logistics and warehousing all over the state.”
In Southern California, including the Inland Empire, warehousing, distribution (especially food packaging) and health care placements are all on the rise, according to Mainstay management. Traditional core staffing occupations such as administration are flat, with one exception: call center positions and the healthcare industry, which continue to grow at a steady pace. Mr. Ramos added, “In the past few days, we have had a dozen or so requests from construction and demolition clients for a wide range of trades. This is a positive sign for a hard-hit industry.”