Bloomberg (03/28/12) Anna-Louise Jackson; Anthony Feld; Alex Kowalski
After nearly nine months of underperformance, the new Bloomberg U.S. Employment Services Index, featuring such staffing companies as Robert Half International Inc., Kelly Services Inc., and Insperity Inc., has climbed 48% since Sept. 22, 2011, while the Russell 2000 Index of small company stocks rose just 31%. With 734,000 temporary and permanent jobs added between December and February, according to the U.S. Department of Labor, Carl Camden, president and chief executive of Kelly Services, says businesses are less pessimistic. Although the portion of temporary workers relative to all employees on nonfarm payrolls climbed 1.86% in February, according to the U.S. Bureau of Labor Statistics, the employment outlook for the next six months reveals some uncertainty. The Conference Board reports that the share of Americans believing there will be more jobs minus the share of those anticipating fewer jobs dropped to minus one percentage point this month.
However, analysts say shares of staffing firms with domestic exposure are performing better than those with European exposure. Moreover, Camden encourages investors to watch the conversion rate of temporary workers taking permanent positions. He notes, “Staffing firms are seeing an increase in temporary-to-permanent conversion that is typical at a second stage of recovery.”