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March 6, 2012

ASA: Staffing Employment Grew 8% in 2011


U.S. staffing companies employed an average of 2.8 million temporary and contract workers per day in 2011, up 8% from 2010, according to data released today by the American Staffing Association. In 2011, U.S. staffing firms hired 12.9 million temporary and contract employees over the course of the year.

“Although the staffing industry employs only two of every 100 nonfarm workers on any given day, it has provided income for millions of American families—about one of every 10 nonfarm workers held a job with a staffing company at some point in 2011,” says Richard Wahlquist, American Staffing Association president and chief executive officer.

In the fourth quarter of 2011, average daily staffing employment totaled 2.98 million workers, up 5.2% from the third quarter and up 5.8% from the fourth quarter of 2010. The October through December period marked eight consecutive quarters of year-to-year staffing job growth since the recession ended in 2009.

“As the economy continued to slowly improve, staffing and recruiting companies played an important role in putting America back to work in 2011, helping close to 13 million people find temporary, contract, or permanent jobs,” says Wahlquist. “Through career counseling, training, employment, and job placement, staffing and recruiting companies add value to peoples’ lives across every sector and occupation.”

Temporary and contract sales totaled $98.3 billion in 2011, 12.4% higher than in 2010. Fourth quarter sales totaled $26.2 billion, up 10.0% from the same quarter last year.
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Headline News


Cross Country Healthcare Reports Fourth Quarter and Year-End 2011 Results
Business Wire (03/05/2012)

Cross Country Healthcare Inc. reported revenue March 5 of $124.7 million in the fourth quarter ended Dec. 31, 2011, a 10% increase from revenue of $113.7 million in the prior year quarter and a 5% decrease from the third quarter of 2011. Net income was $0.5 million, compared with revenue of $113.7 million and a net loss of $6.0 million in the same quarter of the prior year that included $6.6 million of after-tax trademark impairment charges related to the acquisition of Medical Doctor Associates.

For the year ended Dec. 31, 2011, the company generated revenue of $504.0 million and net income of $4.1 million after the aforementioned tax-related matters. This compares with revenue of $468.6 million in the prior year that included the aforementioned impairment charges.

Randstad Employee Confidence Index Rises for Second Consecutive Month
Sacramento Bee (03/05/12)

The Randstad Employee Confidence Index climbed 1.5 points to 53.9 in February, marking its highest level since May 2011. The survey of 1,453 employed adults reveals that 30% believe the economy is improving, and 19% of respondents think more jobs are available. Another 43% of those polled are confident about finding employment, 59% are confident in the future of their employers, and 69% do not expect to lose their jobs. Around 34% of respondents think they probably will seek a new job during the next 12 months, but 53% do not plan to look for a new job during that time.

February Service Sector Highest Level in a Year: ISM Survey
Reuters (03/05/12)

Companies in the U.S. service sector, which employs most of the nation’s work force, expanded at a faster pace in February, according to the Institute for Supply Management. The research firm’s nonmanufacturing index rose to 57.3% from 56.8% in January. The reading topped economists’ forecasts of 56.1%, according to a Reuters survey. New orders climbed to 61.2% from 59.4%. Yet the employment index slipped to 55.7% from 57.4% and the price index, which measures inflation, jumped to 68.4% from 63.5% in the prior month. Any reading over 50% indicates expansion instead of contraction.


Legal Watch


Governor Signs New Mexico Unemployment Insurance Bill
Las Cruces Sun-News (New Mexico) (03/05/12) Milan Simonich

New Mexico Gov. Susana Martinez signed legislation into law on March 5 that reduces taxes on unemployment insurance in 2012. Although the measure will boost unemployment insurance premiums next year, rates are still less than those set forth by a prior bill. The bill’s sponsors, Sen. John Arthur Smith (D-Deming) and Stuart Ingle (R-Portales), say the aim was to ensure the unemployment fund remained solvent and reduce expenses for businesses. According to Martinez, “As New Mexico job creators are working to get our economy back on track and hire new workers, it’s vital that we provide this temporary tax relief to ensure that we’re not putting barriers in the way of job creation.”

Firm That Fired Woman Who’d Just Given Birth Fined $148,000
Associated Press (03/03/12)

The U.S. Equal Employment Opportunity Commission, which had accused HCS Medical Staffing Inc. of firing a woman who had just given birth, says the company will have to pay $148,000. The EEOC says HCS’s owner made offensive comments about the woman’s pregnancy, and then fired her because she needed to take maternity leave. A federal judge ordered HCS’s owner to pay the woman back pay plus interest, compensatory damages, and punitive damages. According to prosecutors, the owner accused the employee of using prenatal appointments as an excuse for time off, and he fired her through the mail while she was in the hospital.

Is Using Credit Reports to Screen Job Applicants Fair?
USA Today (03/05/12) Trevor Hughes

State lawmakers are increasingly concerned about employers using credit reports to screen job applicants, especially since the economic downturn has caused many people to lose their jobs and fall behind in their bills. The practice has been limited by new laws in California, Connecticut, Hawaii, Illinois, Maryland, Oregon, and Washington, and Colorado may soon follow suit. Sen. Morgan Carroll (D-Aurora), the sponsor of the Colorado bill, says there is no connection between work ethic and creditworthiness, and she is concerned that such a practice will create a permanently unemployable class of people.

Chris Ball, operations manager of the staffing firm Express Employment Professionals in Jackson, MS, says hiring managers do not want workers who have filed bankruptcy within the last five years. However, he says some are more willing to hire people with bad credit as temporary employees to allow them to prove their skills and trustworthiness.

Enforcing Non-Solicitation Agreements
Lexology (02/21/12) Roy A. Ginsburg

Suppose a company in a highly competitive industry requires its sales staff to sign a noncompete or nonsolicitation agreement. Several of the company’s sales staff have joined another company that is not a competitor. However, this other company seems to be recruiting the first company’s staff. Does the first company have a legitimate claim based on the restrictions in the nonsolicitation agreement? The short answer is “maybe.”

First, a legitimate claim would be based on several factors, such as state law. Some states would side with the employer, but California and North Dakota, for example, likely would not. Second, the governing state law may be determined by the contract, provided there is a choice-of-law component in the agreement. But even if there is, some courts may decide against enforcing it.

Third, the language of the agreement itself may be a factor. Some courts take the language of nonsolicitation agreements quite literally, so prohibitions on “soliciting,” “inducing,” “convincing,” or “persuading” may be interpreted differently. Other nonsolicitation agreements may be so broadly worded that the company seemingly is prohibiting any interaction, even social interaction between two people who may have known each other for a long time. This kind of language may provide the former employee with an opportunity to contest the validity of the agreement.

Pre I-9 Audit Planning: Prepare for the Worst and Hope for the Best (Part 1)
The I-9 and E-Verify Blog (02/21/12) Valentine Brown

Regardless of the reason for a voluntary audit, employers need to think through the entire process and all of the attendant results and consequences before conducting a voluntary Form I-9 audit. Employers must determine ahead of time what policies and procedures will be followed to respond to the results of the audit. The first task is to identify the worst possible outcomes of an audit based upon the employer’s individual company characteristics, preferably by working with experienced audit counsel who can assist in developing the worst case scenario list considered in the article.

The most common worst-case scenario that employers encounter during an audit is when Forms I-9 contain errors and the human resource department has to request assistance and possibly documents from employees to make corrections. Another troubling result of an internal audit is when fraudulent I-9 documents are identified. The final worst-case scenario cited in the article is when undocumented employees are identified during the I-9 audit.


Trends and Research


Yoh Index Finds Disconnect Between Recent Unemployment Statistics and Real-World Demand for Skilled Temporary Workers
Yoh News Release (03/05/12)

Recent reported employment gains should be great news for the American economy. But findings by the Yoh Index, which measures real-wage growth among skilled temporary workers, shows continued stagnation in salary rates among the most dynamic sector of the U.S. employment market. The Yoh Index barely budged for the fourth quarter of 2011, ending the year at 114.26, just a 1.15% increase over the same quarter for 2010.

Much of the disconnect between reports of employment gains and the real-world demand for skilled temporary workers has to do with the employment participation rate, which now stands at 63.7%, the lowest since the early 1980s. An artificially low employment participation rate decreases the unemployment rate by reducing the total number of people looking for work. A recent survey, commissioned by Yoh and conducted by Amplitude Research, found that systemic uncertainty over the economy and structural inefficiencies within the hiring process continue to suppress U.S. employment, and threaten to do so well into the future. In the survey of companies with revenues greater than $750 million and work forces over 1,500 employees, 61% of respondents reported that economic uncertainty represents the greatest obstacle to increased hiring this year.

Recruiter Sees Hires Picking Up
Washington Business Journal (03/05/12) Jeff Clabaugh

More companies are hiring and the professional job market has swung to the job seeker’s favor, according to Philadelphia-based recruiting firm MRINetwork. The company’s survey of its recruiters found 56% of them characterize today’s talent market as candidate-driven, while 44% say it’s still an employer-driven market. Among those same recruiters, 49% say newly created positions are the primary reason for the job openings they are seeing.

“As companies gain more confidence in the economy, many are ready to add headcount and back fill positions that have been left unfilled,” says Rob Romaine, president of MRINetwork. “We are seeing clients reinvesting in their teams, expanding their operations, and striving to gain market share as business improves.” Recruiters report nearly half of their placements took fewer than five weeks from the first interview until an offer was made.

Tech Hiring Helping Spur Revival in Jobs Market
San Francisco Chronicle (03/06/12) Rich Miller

Technology-industry hiring is on an upswing, with vacancies outnumbering job seekers by more than three to one, according to the Conference Board. Online help-wanted advertisements for people with computer and math skills rose 2.1% in February from a month earlier to the second- highest level since the Conference Board began tracking the data seven years ago. Job openings for people skilled in mobile applications are up more than 100%.

A study released in January by economists Robert Shapiro and Kevin Hassett found that more than 1.5 million jobs were created from April 2007 to June 2011 by the shift from 2G to 3G Internet and wireless network technologies. Going forward, the U.S. will need about 490,000 people with “deep analytical skills” and another 1.5 million data-savvy managers, according to a report by McKinsey Global Institute.


ASA for You


Find Out Where the Best Candidates Come From—ASAPro Webinar Thursday

Measuring the return on investment of recruitment advertising should be a major priority for every staffing firm owner and recruiting professional. Get tips for maximizing the ROI of your online recruitment advertising this Thursday, March 8, 3–4 p.m. Eastern time, in the ASAPro Webinar “Source-Tracking: Maximize Your Online Recruitment Budget.”

Shane O’Donnell, senior director of sales at Indeed.com, will help you identify inefficiencies in your company’s candidate source-tracking processes and make measurable improvements to your recruitment strategies.

ASAPro Webinars are free for ASA members ($295 for nonmembers) and qualify for continuing education hours toward ASA certification renewal. Register online at americanstaffing.net.
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Protect Your Business—Go to the 2012 ASA Staffing Law Conference

If your staffing firm has insufficient insurance coverage, you might not find out until a substantial loss occurs. Protect your business by attending the 2012 ASA Staffing Law Conference, April 17–18 in Washington DC—one of the sessions features insurance experts who will provide a primer on types of coverage common to the staffing industry and explain how to avoid common traps.

This annual conference is the only program devoted to legal and regulatory issues facing staffing firms. To register, visit americanstaffing.net.
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