Staffing Economics Sometimes Unpredictable
In the study of economics, nothing is definite, as the dismal science is also a very inexact science. Perhaps one of the best cases in point is the pre-1970s belief that inflation could not accompany economic stagnation, and that such stagflation was not possible. The concept, a mainstay of Keynesian Economics, was challenged in the 1970s and again in the 1990s in the U.S. when economic recession was coupled with not only inflation but also higher unemployment rates.
In Massachusetts, the unpredictable nature of economics has shown itself within the staffing industry. It is generally assumed that increases in temporary hiring naturally precede increased permanent hiring, but Massachusetts state officials have noted that from the end of 2004 through 2005, the largest increase in jobs came in the professional and business services sector, where between 8,000 and 14,000 jobs were created. Almost half of that hiring was facilitated by staffing firms placing employees in temporary assignments.
Elliot Weiner, economist with the state Division of Unemployment Assistance notes that such temporary placements are usually a lead indicator that tells you what’s likely happening in the economy. While the increase is certainly a good sign for employment in the state, there has been no indication of increased permanent placements, throwing a wrench in the works of conventional wisdom and once again indicating the fickle nature of economic analysis and predictions.