While millions of jobs are being lost in the abysmal economy, a lower-profile trend involves companies — especially smaller ones — hiring temporary workers in response to the crisis.

Employers that are determined to keep fixed-staffing costs at a bare minimum may need to expand their work forces from time to time, as dictated by, say, short-term spikes that might reflect the demands of a particular client or customer. Some companies, being extra careful about full-time hiring that might not be worth the investment, find it appealing to first try employees out, with no obligation. For other firms, extraordinary human-capital needs may arise out of structural changes to their businesses or other special circumstances driven by the recession.

To be sure, there appears to be no overall surge in temporary staffing. At perhaps the biggest firm in that sector that places finance professionals, the publicly held Robert Half International, temporary staffing revenue was flat in 2008 at $3.6 billion, and declined 1 percent when removing the effects of currency fluctuations.

Still, that was a much better performance than Robert Half experienced for its permanent placement services, for which constant-currency revenue fell by 5 percent, according to the annual report the firm filed last week. Since its temporary placement business is much bigger, it has not been hurt too badly so far.

"I've heard some companies say they're keeping 70 percent core permanent staff and 30 percent variable-cost labor," said Paul McDonald, executive director of Robert Half Management Resources. "Some are saying it's 60-40. One actually said 45 percent permanent and 55 percent variable." The latter company previously maintained a 70-30 mix, he noted. 

All Temps, All the Time
Patrick Nichols, CFO of Crystal Geyser Water, a privately held beverage maker with revenue in the $50 million to $100 million range, is one who prefers to take on temporary staff these days. "Virtually everyone who comes in is going to come through that route," he told CFO.com.

Nichols, in fact, came through that route himself. After a temporary staffing agency placed him at Crystal Geyser as interim CFO last September, he transitioned to permanent finance chief at year-end. His controller and a cost accountant currently are temps, and Nichols recently converted his chief accountant from temporary to permanent status.

This arrangement gives Nichols comfort that he's not going to end up making an unwise hire when he can least afford it. "As is typical of most companies these days, we don't hire people until we absolutely need them," he said. "If you bring them in through a temp agency, you get to try them out. And although the per-hour rate is higher, in the long term it's much more cost effective."

Companies with more modest needs to fill than CFO, controller, and chief accountant may hold similar views.

At sister companies Gainsborough Waste and Texas Outhouse, controller Donna Anderson said she too is using more temps these days, with full-time staff tightly controlled because "times are hard right now." One of her biggest annual tasks comes at year-end, when all paper files must be reorganized and boxed. "I need someone who knows what they're doing, who knows the difference between receivables and payables," she said.

Beyond Anderson's accounting needs, the company hires extra laborers as bigger pieces of business roll in. For example, a client that sponsored a recent Mardi Gras event ordered 100 port-o-cans, "so we needed extra drivers and other workers for just that week," she said.

Creamier Crop
Adding to the comfort level with temps is that, because of the rampant work force reductions, the pool of qualified fill-ins is perhaps as big as it has ever been. "We're continually looking to upgrade our people, and with the employment market what it is, there's an opportunity to find better ones than would typically be the case," Nichols said.

Andrew Reina, practice director for Ajilon Finance Solutions, a consulting practice whose parent company provides temporary staffing, agreed that "right now, there are so many candidates out there as a result of the downsizing and the hiring freeze, we have a tremendous pool of candidates."

Because of the glut, anyone who is out of work and trying to find a temporary position should find a unique or creative approach to getting noticed, Reina counseled. "I've seen folks come in with full portfolios as their resumes, writing white papers, getting published, or using other mechanisms to stand out," he said.

McDonald, though, observed that technically superb accounting and finance professionals — Sarbanes-Oxley consultants or CFOs with systems-installation experience, for example — are still relatively hard to find, even if it's easier than before.

One-offs
There are all kinds of other ways in which the recession is spurring the use of temps. At United Service Source Inc., a private, third-party network services and digital media provider, a downturn in revenue necessitated an acquisition so it could continue its mission to establish itself as a major player in its industry.

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