The economy has come a long way since the Great Recession: We’ve had nine consecutive quarters of positive GDP growth, more than 100 percent up-swing in the stock market and more than three million job openings.
However, this recovery is different because this time around economic growth remains tepid and the unemployment rate is stubbornly high. This frustratingly sluggish rebound has prompted many renowned economists to predict a “new normal.” So what role does the staffing industry play in this uptrend and what would a “new normal” economy mean?
In this post, we will try to find the answers by looking at the jobs data from this recovery and compare it to that of the two previous post-recession periods.
First, in looking at four years of data following each of the last three recessions and investigating the importance of the staffing industry to the rebuilding of a healthy job market, we find a very interesting trend. After the 1991 recession, 19.9 percent of net job creations were generated from the staffing industry. This number rose to a healthy 25.4 percent during the four years after the 2001 recession. Today, about four years after the trough of the Great Recession, this number has jumped to 31.25 percent. The data suggests there is a strong trend developing. Not only has the staffing industry played a major role in the economic bounce-backs of the last 20 years, but that role is expanding at an impressive pace.
Another point worth noting is that this growth is not a new phenomenon. Regardless of the validity of the “new normal” prediction, the staffing industry’s meteoric rise pre-dates the last recession and certainly doesn’t seem to be negatively affected by the recession.
Another pattern we observed in each of these four-year segments is how staffing employment growth is robust even through the trough of the recession according to the National Bureau of Economic Research. In fact, in terms of percentage of net jobs created, staffing employment accounts for a much higher percentage of the total near the trough of the recessions, and as recovery progresses, that percentage slowly ebbs to a sustained level. It is difficult to imagine how this economy would recover from severe economic shocks without the staffing industry to provide the initial boost in employment rebound.
It is clear from data that the staffing industry is playing an increasingly pivotal and transformational role in the economy, especially during times of chaos and challenges. While the recession has left us in a prolonged and lethargic recovery, the staffing industry’s role has only expanded.