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Lingering temp hires create mystery

July 2, 2008
If this were a normal economic slowdown, companies would have eliminated temporary workers in droves beginning last year.

But that hasn't happened this time.

Indiana companies continued adding temp workers right up until February, according to figures from the Indiana Department of Workforce Development. Indianapolis-area companies hired for another month, until March, and then began cutting back.

The state had 87,400 temp workers in May, the most recent month for which figures are available. That was down 900 positions from the same month last year.

The Indianapolis area had 39,600 of the workers, down 500 from a year earlier.

Figures on temporary workers are best compared year-over-year because they are not adjusted for seasonal fluctuations.

The phenomenon has one of the state's foremost experts on temporary services stumped.

Gary Hentschel, who was president of Personnel Management Inc. for 12 years before being named CEO of KeyBank of Central Indiana in November, said temp workers historically have been harbingers of economic trends. They are among the first laid off when economies soften and some of the first hired when conditions improve.

"That is kind of perplexing," Hentschel said.

Based on his background in temporary services, Hentschel said he would have expected companies to curtail hiring last fall.

Strong exports might have kept temp workers on the job longer than would be anticipated in an otherwise sluggish economy, he said.

The low value of the dollar has made American goods inexpensive in other countries. As a result, exporters have enjoyed strong markets overseas.

Warehouses and logistics firms - which distribute, label and repackage goods - are big employers of temp workers. Those companies might have experienced good times longer than housing and other industries, he said.

Temporary employment will begin to pick up this fall, Hentschel predicted. The economy will turn a corner late this year, and the 2009 will be better than 2008, he said.

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