Temporary Jobs are on the rise, but will permanent positions follow?

Ask anyone who's been unemployed during the past year, and they won't use the word recovery. Rather, you'll likely hear it's still tough out there. But there are signs of life, and staffing experts are cautiously optimistic about prospects in 2010.

First, the bad news - while the unemployment rate fell in November to 6.7 percent, the number of continued unemployment claims tripled between the fall of 2008 and 2009, meaning there are fewer jobs to be had. The manufacturing and hospitality sectors - the lifeblood of NH's economy - continued to lose jobs during the past year, and construction was also hard hit by the recession in 2009.

The good news is temporary positions and contract staffing are finally on the rise. "We're not willing to declare victory, but the trend we're seeing is in temp and consulting, nationally and locally, and those are the fields that come back first," says Barry Roy, a regional manager for Robert Half International, which has offices in Manchester, Nashua and Portsmouth. Staffing executives say accounting and financing positions are rebounding and information technology and health care are hot job markets.

Economists and staffing executives say while the staffing sector is improving and will continue to do so, a full economic recovery will take time. Between October 2008 and October 2009, the total number of people employed in NH fell 2.6 percent. Between the third quarter of 2008 and the third quarter of 2010, the number of people employed in NH is expected to fall by a lesser margin, just under 1 percent, according to data from the Economic and Labor Market Information Bureau at NH Employment Security.

Annette Nielsen, an economist with NH Employment Security, says caution is key. "Generally there was a lot of fear and a lot of layoffs. That's kind of stopped. But I think we need a longer time to see if that's temporary or long-term," she says.

Employers too are cautiously optimistic. A survey of 302 Granite State businesses by RKM Research and Communications in Portsmouth and the Business and Industry Association of NH found that 13 percent expect to increase their employee count in 2010 while 78 percent expect to add no new employees. That is up from 8 percent expecting to add employees in 2009.

Signs of Recovery?

While it's definitely an employer's market, job prospectors are finding more potential opportunities. The Adecco Group, a global provider of HR services with an office in Portsmouth, initially saw the job market fall even beyond their expectations, but they now see a comeback.

"The high point before this recession was in 2007, but we saw the cracks forming in 2008," says Patrick Carey, Adecco's area vice president. "We saw some businesses cut back to levels we had never seen before. But in April of 2009 we started to see signs of activity again."

The rise in temporary employment, says Carey, is a good sign. Still, uncertainty remains. "We have been trying to get companies to give us their projections, and some can, but most can't see what's going on six months out," he says.

Employment data gives more reason for caution. The state's jobless rate dropped to 6.7 percent in November, and between October and November, NH businesses added 2,070 jobs. While the drop in unemployment is good news, it's still well above the unemployment rate of 4.8 percent in November 2008.

And among the more pertinent statistics, says Dennis Delay of the NH Center for Public Policy

Studies in Concord, is the increase in unemployment claims. The number of initial claims for unemployment compensation jumped from 4,520 in September 2008 to 6,714 in September 2009. In that same period, the number of continued unemployment claims nearly tripled from 38,392 to 107,811.

"Compared to a year ago, the number of people without jobs is significantly worse, and that tells you that people are having more trouble finding a job than a year ago," Delay says. "The unemployment rate can come down and that's better news than it going up, but the number of jobs available is still down."

Paul Philbrick, head of Network for Work, a Southern NH group formed to help the unemployed find work through networking, knows too well the realities of the job market. Philbrick says his organization's members are getting mostly contracting jobs, predominantly in the areas of software engineering and health care. And the group's membership has been growing at a faster clip than those landing jobs. The group began with eight members in February of 2009, and now has about 1,000 members. In that time, about 180 members have landed positions.

Delay says NH is likely to see a stronger employment recovery by summer. He also notes that though the economic situation has been deemed as the worst since The Great Depression for the country as a whole, it's not the highest unemployment rate seen in NH. It was worse, he says, in the recession of the late 1980s and early 1990s, as the state lost big employers like Digital Equipment Corporation to other states.

One key figure state employment specialists note is average weekly hours worked, and that barometer suggests positive movement. The average weekly hours worked by production workers in manufacturing in NH was 42.5 in June of 2006, but that number dropped to 37.4 hours in December 2008, suggesting businesses were instituting furloughs and/or offering overtime. By October, the figure climbed to 39.4.

What's Hot, What's Not

So who is adding jobs? Staffing executives say the high-tech sector is the most active, but other hiring sectors include financial services, especially accounting, and health care. Those anecdotal stories are matched by state projections between the third quarters of 2008 and 2010, which call for a 1.7 percent increase in health care (the highest of any category) and a 1 percent increase in professional scientific and technical services, which includes computer and accounting jobs.

The Alexander Technology Group LLC, a technology staffing firm in Bedford, saw the firm's revenues and job placements double between the end of 2008 and the end of 2009 because high-tech employers in NH had an increasing demand for employees.

"We are seeing significant research and development increases and significant increase in software development and project management hiring," says Jason Alexander, principal and cofounder of Alexander Technology Group. "We've been very busy, and I am very optimistic for us as a company, as well as for the employment base. Employers are anticipating opening their budgets over the next two quarters for any number of things."

Carey of Adecco concurs. He says that overall his area of business - light industrial, production, warehouse help, distribution, clerical aid and administrative help - was up in the second half of 2009 over last year in both number of clients and number of placements. He says industries including medical products, electronic components and defense-related fields have also been adding jobs. But, he says, NH "lost a lot of small and medium companies - many moved overseas."

Roy of Robert Half says the state's service industries were among the worst hit by the recession. "The consistency has been with the loss in construction, and leisure and hospitality - people have been spending less money." But that may change as state projections for those sectors between the third quarter of 2008 and 2010 show a 1.1 percent increase, or 1,277, the second most projected additions behind health care.

Roy says there are "hot" fields emerging, such as accounting and finance as well as customer service, business development and credit and collections. "That's what you see when you come out of a recession," he says. "Companies go through recession, a lot of companies have cut too deep, and now they either have not enough people to keep going or business has picked up."

Given all that movement, Roy sees reason for optimism. "It's too early to say, we've certainly seen the movement on the hiring front, the job market is competitive, we see the trend of temp hiring," he says. "We're pretty optimistic. We're hopeful in 2010 this will continue."

Economists are more wary. "So far there's no sign, no clear picture that any field is showing growth," says Nielsen of NH Employment Security, adding that the only field seeing steady growth in recent years has been health care, which grew the most of any industry supersector, adding 900 jobs between October 2008 and October 2009, or a 0.8 percent increase. Looking ahead, the state projects health care and social assistance will add another 2,894 jobs between the third quarters of 2008 and 2010, once again the largest increase.

"There is uncertainty, but there is optimism," says Carey of Adecco, in summing up the feelings of many economists and staffing executives. "Businesses are seeing good things happening."