How's Your Business Doing?

For the first time since 2007, we don’t have to dread answering that question!  Our summer peak season was a very good one historically speaking, and compared to the last two years it was spectacular.  If you’re wondering:  “Great, what’s that got to do with me and my business?” keep reading.
Intuitively, we all understand that temporary staffing is a bell-weather of coming economic trends.  As good times start to slow, the first to go are temporary employees.  Just as naturally, when slumps begin to turn employers are reluctant to commit to new hires.  It makes sense for them to carefully stick their toes into the employment waters by using temps as demand begins to increase.
Consequently, it makes sense that temporary staffing would increase in advance of the rest of the economy.
While it all makes sense from the seat of the pants, the brainiacs at the American Staffing Association (ASA) did an exhaustive evaluation of the current and previous recessions.  They make a persuasive case that not only do changes in the temporary staffing industry signal changes in the overall economy well in advance of their general recognition, but best of all, the staffing industry began to turn around in July 2009!
It’s important to keep in mind that they were looking at the national economy. Looking at our numbers for ’09, you’d never prove it.  That’s probably true for you, too.  That’s not surprising since California was particularly hard hit by the current recession.
However, if you’ve noticed an improvement in your business over last year, you’re not hallucinating:  let the ASA study give you a little confirmation.  True to form, our numbers this year are more in line with pre-recession years.
A few weeks ago, I went to the ASA annual convention in Las Vegas.  Attendance was way up from last year and attendees were uniformly upbeat.  It was a perfect crowd to hear the presentation about the economy.  After two hard years, we were all ready for good news.  The confirmation I got from my colleagues, bolstered by the ASA’s formal economic analysis was as welcome as an early spring morning.
In our business, the recovery this summer centered on the catering business.  Our two major clients both showed increased demand for event personnel.  Orders from one was up 44% and the other an amazing 325%!  High end events in the wine country bring revenue to all sorts of North Bay businesses.  Even better they provide capital for improvements that will hopefully help builders, contractors, and design businesses in coming months.
In addition to caterers, we are also getting orders from other businesses, reflecting an increase in activity across the local economy.  We’ve noticed the lower paying jobs in warehousing and distribution are increasing.  That’s a natural starting point for recovering other jobs.
The ASA’s analysis of the economy based on staffing trends over the past few years suggests the economy actually began turning July 2009.  Their study is powerful evidence that we might be in the early stages of a general recovery.  The data show staffing job growth started in the first week of July 2009, and has grown at a sustained rate ever since.
As our numbers show, the local economy was still in the doldrums in the summer of ’09, however this year’s results suggest we are catching up with the rest of the staffing industry and the economy.
While it’s possible that things are different this time around, the study cites the surge in staffing employment in previous recessions and the pattern seems to be repeating again.  They also cite various experts who claim that there hasn’t been a structural change in the economy that would mean employers are changing their business models away from traditional employment.
Rather, the evidence is that employers are being careful as demand begins to increase and are hedging their bets by using temps just as in previous recoveries.  Flexibility is the best way to meet uncertainty!
That doesn’t mean all is suddenly peaches and cream.  The study notes that in terms of employment, this was by far the worst recession since WWII.  There are also plenty of reasons for concern in the fundamentals throughout the economy.
Nevertheless, we are seeing the first of hopefully many more positive indications, and for now, that’s good enough!  If you’ve seen an increase in your business, take heart, it’s real!  If not, hang in there, it looks like it’s coming.
-Joanne Sanders
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