Call it the inverted yield curve. The success of a temporary staffing agency can actually be better when unemployment is high because there are more un- and underemployed temp workers seeking employment.
So what happens now during 2019’s strong and steady economy?
One person who has seen the industry expand and contract is Yo Mitchell, vice president of operations at Career Strategies Inc., which ranks No. 6 on the Business Journal’s Staffing and Employment Firms list. Mitchell has been with the company for 24 years.
“The toughest thing right now is finding good people,” Mitchell said, explaining that, as of early 2018, her company has had some problems with candidates “ghosting,” or disappearing without any notice. “They’re ghosting interviews, ghosting the first days.”
Mitchell said the growing problem was not generational and that other people outside of the millennial age range can also prove difficult.
“It’s definitely challenging,” she said. “If you look our Yelp reviews, we’re trying to find the right environment for people and getting people where they want to be.”
Elsewhere in Woodland Hills, Aerotek Inc., another national staffing firm that is No. 1 on the Business Journal’s list, has a specific focus related to engineering and architecture.
While Aerotek Director of Business Operations Juan Mendoza downplayed ghosting as a factor, he did allow that 2019 has been a rough year because, when unemployment is low, staffing agencies have a hard time trafficking in top-flight talent.
“This year is a continued progression from last year’s fight for talent in the market. The demand hasn’t slowed down but our ability to locate top talent has been challenging,” he said. “It’s been harder this year than in years past.”
Adding to the difficulty is the specificity within which the company operates.
“We have some niche divisions,” he said. “Engineers. for example – their unemployment rate is really low.”
Technical writers – depending on how detailed and specific the assignment is – could be hard positions to fill.
“Even our core skill sets – manufacturing engineers, quality engineers – are traditionally good for us,” he said. “When we find good people and find out what they want, generally we find them work.”
“Direct placements” is when an employment firm finds permanent work for their temp employees.
“This year we had a little bit of an uptick on direct placements,” Mendoza said. “Traditionally, it has been 5 percent of what we do. This year, (it doubled to) 10 percent. The customers are looking to hold onto top talent.”
Temporary hire agencies such as Career Strategies and Aerotek are exempt from the new law going into effect in January, which will mandate that businesses re-categorize contract workers as employees. Those freelancers fill out 1099 forms.
“The employees that we send out, they’re on our payroll,” Mitchell said. “For the companies that like to have freelancers, they can come to an agency like ours and we can put them on our payroll for them.”
While she conceded there are limitations on that rule, it is another way a firm such as hers can be useful to clients. “I don’t want to bank on anything, (but) we can educate companies for that service,” she explained.
Mendoza said that his company scouts for talent in a variety of traditional ways – college contacts and job fairs, classified listings and social media. However, the good old-fashioned way still proves effective.
“Hands down, the best way is referrals,” Mendoza said.
Career Strategies has 120 non-temporary employees and a workforce of 10,000 temp workers. Mitchell oversees the company’s administrative temporary and health care divisions as well as the direct hire real estate, technology, health care and administrative divisions.
Founded 30 years ago by Darin Rado, who, as chief executive, still runs the company, Career Strategies originated out of only one office in Los Angeles. Today, the company has 21 offices nationwide, including an office in Woodland Hills and the corporate headquarters in Burbank.
Based in Hanover, Maryland since 1983, Aerotek began to plant flags in Southern California in the early 1990s. Today, with a central office in Woodland Hills and a satellite in Santa Clarita, the firm has a contract workforce of about 1,300 a week out of Woodland Hills.
Looking ahead, the holiday season may or may not be robust, Mendoza explained.
“After Thanksgiving, we’ll see a slow down with the technical, but in non-technical industrial we stay pretty busy up until the week of Christmas,” he said.