After a tumultuous two years of pandemic conditions, business shutdowns, government interventions, supply chain disruptions and lingering uncertainty, it is certainly a welcome sight to see a host of data points that indicate strong hiring and momentum in the light industrial staffing segment. This article takes stock of current conditions and examine some key measures of how things are going in industrial staffing.
One of the most prominent bellwethers of the health of industrial staffing is the monthly estimate of temporary help employment reported by the US Bureau of Labor Statistics. This figure stood at 3.146 million in February, which is 240,000 jobs higher (+8.3%) than in February 2020 before the pandemic hit. This figure is a useful bellwether because blue-collar jobs have historically accounted for more than half of the total. According to our analysis, temporary help employment rose 282,000 jobs over the past six months, with jobs gains consistently above 30,000 in each of the past three months.
Aside from government statistics, industrial staffing firms themselves have indicated strong revenue growth, according to our Pulse Survey and public company reports. Our January Pulse Survey showed 15% aggregate and 10% median year-over-year revenue growth in December. A net 66% of industrial staffing firms reported an increasing trend in orders both over the past three months and projected over the next six months. Regarding fourth-quarter 2021 results, TrueBlue reported that revenue in its PeopleReady staffing division was up 22% year over year and had essentially returned to pre-pandemic levels (down 1% compared to the fourth quarter of 2019.) TrueBlue said that growth drivers were improved worker supply and strong demand from clients in the retail vertical.
Strong demand for industrial temporary workers is also evidenced by substantial levels of wage inflation. In the fourth quarter of 2021, TrueBlue noted that pay rates were up 11.4% year over year and bill rates were up 12.4%. Similarly, in the same quarter, Kelly Services noted wage inflation of 11% year over year in its professional and industrial staffing division. In our January Pulse Survey, a net 74% of industrial staffing firms reported that bill rates increased over the past three months, and a net 57% of firms projected further growth over the next six months.
To break down where the growth has been coming from in industrial staffing, an analysis of client industry sectors is useful for understanding and benchmarking how demand levels may vary across the customer base. The table below shows total employment levels in some key client industry sectors, including manufacturing and logistics. We can see that employment has recovered in nondurable manufacturing sectors such as food and chemicals, but that jobs have not fully recovered in the durable manufacturing sectors such as machinery and transportation equipment (including automotive). Challenges in durable goods manufacturing likely stem from greater exposure to disruptions in the global supply chain. In areas where job recovery has been slower, the silver lining is that there may be a higher volume of hiring ahead. Aside from manufacturing, we note that the jobs in the warehousing & storage and couriers & messengers industries have risen by 31.8% and 27.4%, respectfully, since the pandemic began. This accounts for a boom of 660,000 new jobs.
Total employment levels in key client industries that use industrial staffing, February 2022 vs. pre-pandemic February 2020 (click on chart to enlarge)
In summary, the above data suggests that recent months have been a busy time for US industrial staffing firms, and that employment levels are returning to pre-pandemic levels overall — and even far exceeding prior levels in some niches. Industrial staffing firms that are able to navigate the current dynamic environment and deliver quality candidates in a very competitive environment will likely find many rewarding opportunities as the US economy continues to grow.
