U.S. Department of Commerce

Economics and Statistics Administration

An Update on Temporary Help in 

Manufacturing

 

he temporary help services industry has bounced back from the recession and

 continues to grow. Newly available data are enabling the Economics and 

Statistics Administration (ESA) to re-examine this important industry and update a 

report on the temp industry that we published last year.1According to data from 

the Bureau of Labor Statistics’ Current Employment Statistics (CES) program, the 

temporary help industry only accounts for 2 percent of all nonfarm employment in 

the U.S. economy (as of March 2015), but comprises 11 percent of all the jobs 

created since the end of the recession. Growth continued steadily in 2014, with 

174,400 temp jobs added last year.And although the industry has seen some job 

loss in the first part of this year,itemp workers remain a critical, growing component 

of the workforce in many industries and occupations, even for traditional factory 

jobs in the manufacturing sector, as explored below.ii 

Although we don’t know exactly how many temporary workers actually work in the 

manufacturing sector, we estimate that temps fill somewhere in the range of 8 to 10 

percent of all jobs in production occupations in the manufacturing sector.iii Because 

temps are not counted as manufacturing workers in official statistics and those who

fill these jobs are typically paid less for performing the same work, these statistics 

somewhat underestimate the number of people working in manufacturing, and 

overestimate the average wages of those working in manufacturing. This report will 

touch on these issues.

There are many reasons why a firm might choose to hire temporary workers. 

Seasonal factors may affect the demand for goods or services, or firms might see an 

increased demand for their product, but do not know if it will be sustained. Temps 

provide a business with the flexibility to meet short-term staffing needs without the 

long-term commitment of employment contracts. Hiring and firing permanent staff 

can be costly, and although firms do adjust workers’ hours to satisfy short-term 

needs, hiring temps provides another option. In addition, firms might turn to temps 

as a mechanism to screen and recruit permanent hires when the need arises to 

 

1

This report updates previously published estimates on the number of temporary 

workers in manufacturing using data from the Bureau of Labor Statistics’ Occupational 

Employment Statistics (OES) survey. Previously, data on the employment services 

industry was used to estimate the number of temporary help workers in manufacturing, 

but newly available OES data on the temporary help industry allow for more precise 

estimates. The original estimates can be found in “Temporary Help in Manufacturing,” 

August 14, 2014, available online at: http://esa.doc.gov/reports/temporary-helpmanufacturing.

By 

Jessica R. Nicholson 

Thanks to 

David Langdon, Ryan 

Noonan, and Robert 

Rubinovitz, Office of 

the Chief Economist,

and

Jane Callen, Editor

ESA Issue Brief

# 02-15

April 29, 2015

T
Page 2 U. S. Department of Commerce, Economics and Statistics Administration 

expand their permanent workforce–converting 

those whose skill sets and work ethic fit well 

with the company and position.iv 

Firms also rely on temps to fill diverse jobs. 

With respect to manufacturing, firms hire 

temporary workers to perform tasks ranging 

from production work to transporting materials 

or performing administrative tasks, and more. 

Temp workers are a legitimate part of the 

manufacturing workforce, and the temp help 

industry serves as a potential path into a 

manufacturing career. It is important to get a 

count on the number of temps in 

manufacturing to get an accurate assessment of 

hiring in the industry. Furthermore, prior 

research into the use of temps has highlighted 

how our incomplete accounting of their use 

may bias measures of manufacturing 

productivity.v

From the employee perspective, some workers 

like the short-term, flexible nature of temp jobs; 

others take the work because they are unable 

to find stable, permanent employment. 

However, temp jobs also typically pay less than 

comparable permanent employment and may 

not provide benefits such as health insurance 

and paid leave.vi Economics and Statistics 

Administration analysis using data from the OES 

program indicates that hourly wages for 

production occupations in the employment 

services industry were generally lower than for 

the same occupation in the manufacturing 

industry. Additionally, temp worker safety, 

especially in the manufacturing industry, is of 

increasing concern.vii In 2013, the Department 

of Labor’s Occupational Safety and Health 

Administration announced an initiative to help 

ensure that temps receive proper training to 

keep them safe on the job.viii

So, how many temps work in the manufacturing 

sector? The government’s official employment 

statistics do not tell us precisely how or how 

much firms are using temps. It is possible, 

however, to get a reasonable approximation of 

temps filling production jobs.

Payroll employment statistics, like the CES 

program, measure the number of jobs at 

specific industry worksites. Manufacturing jobs 

are in manufacturing establishments (factories) 

and the workers in these jobs are on the 

establishments’ payrolls. Similarly, retail jobs 

are in stores, and so on. The temporary help 

industry is unique in that it places workers at 

sites across a wide variety of industries, but the 

workers are on the payroll of a temp help 

company. So, while those workers may be 

performing duties alongside, if not identical to, 

manufacturing workers, they do not show up in 

the manufacturing employment statistics. 

Data from the Bureau of Labor Statistics’ 

Occupational Employment Statistics (OES) 

program help overcome this statistical 

challenge, by allowing us to focus on production 

occupations, which are predominately in 

manufacturing. Examples of production 

occupations include precision workers, machine 

setters and operators, assemblers, fabricators, 

and plant and system operators; they are the 

workers who actually make the goods. These 

jobs account for more than half of the 

manufacturing industry’s employment, and 

nearly three-quarters of all production workers 

are employed in manufacturing establishments. 

Using the OES data we find that in 2014 there 

were 672,500 jobs in production occupations in 

the temporary help industry. If all of those 

temps were placed in manufacturing 

establishments, then we could say that the real 

number of production jobs in manufacturing 

would be about 11 percent higher than the 6.2 

million counted in the industry that year.

This estimate is somewhat unrealistic, because 

it assumes that ALL of the temps performing 

production work are in the manufacturing 

industry. But it probably is not too outlandish 

to assume that the majority of them are, in fact, 

manufacturing temps. If we take into account 

that not all production jobs are in 

manufacturing and, for simplicity’s sake, 

allocate manufacturing’s share of the 

economy’s non-temp production workers (75.6
U. S. Department of Commerce, Economics and Statistics Administration Page 3

percent) to temporary help jobs, then we arrive 

at a lower estimate of around 508,400 temps 

doing production work in manufacturing. This 

number would still boost the ranks of 

manufacturing production workers by about 8 

percent. 

Data from the Census Bureau’s Annual Survey 

of Manufactures and Economic Census also help 

to quantify manufacturers’ use of temps. In 

these surveys, manufacturers are asked how 

much they spend on temporary and leased 

employees. This data on temporary and leased 

employees is not directly comparable to the 

jobs data—it includes spending on Professional 

Employer Organizations (PEOs), which are a 

separate industry from temporary help, and is 

not limited to production occupations.ix In 2013, 

manufacturers spent $32.0 billion on temporary 

and leased employees. This is equal to 5.0

percent of total payroll for manufacturers and 

8.6 percent of payroll for just production 

workers. This is slightly less than the 8 to 10 

percent share of manufacturing production 

worker employment accounted for by temps 

based on the OES data discussed above. That 

the share is smaller is perhaps not surprising 

given that the average temp works fewer hours 
Page 4 U. S. Department of Commerce, Economics and Statistics Administration

per week than the average manufacturing 

production worker—around 35 hours versus 42 

hours over the past five years, as measured by 

the CES.x

As noted in the earlier version of this article, 

some of these “temp” jobs will expire based on 

an employer’s changing labor needs. Others 

may become permanent hires, at which point, 

they will be officially counted as manufacturing 

jobs. In the meantime, we will continue to use 

the latest OES statistics to estimate the 

manufacturing sector’s use of these workers.

The author is an economist in the Office of the 

Chief Economist of the U.S. Department of 

Commerce’s Economics and Statistics 

Administration.

Technical inquiries:

Office of the Chief Economist

(202) 482-3523

Media inquiries:

Office of Communications

(202) 482-3331

 

i

So far, in the first three months of 2015, the 

industry has lost 3,900 jobs.

ii Matthew Dey, Susan N. Houseman, and Anne E. 

Polivka. “Manufacturers’ Outsourcing to Staffing 

Services.” Cornell University ILR School. July 2012. 

Available at: 

http://digitalcommons.ilr.cornell.edu/ilrreview/vol6

5/iss3/3/. 

iii Production occupations as classified by the 

Standard Occupational Classification (SOC 51-0000). 

See http://www.bls.gov/soc/2000/soc_u0a0.htm for 

more information.

iv Dey, Houseman, and Polivka.

v

Ibid.

vi According to the 2005 Current Population Survey 

Contingent Worker Supplement, 8.3 percent of all 

temporary workers were covered by employerprovided health insurance and 3.8 percent were 

included in an employer-provided pension plan. The 

comparable figures for workers in traditional work 

arrangements were 56.0 percent and 47.7 percent. 

Available at: 

http://www.bls.gov/news.release/pdf/conemp.pdf. 

vii “Safety 2014 Session on Temp Worker Safety 

Brings Up Many Issues.” Occupational Health & 

Safety Online. June 12, 2014. Available at: 

http://ohsonline.com/articles/2014/06/12/managin

g-temporary-worker-safety.aspx. 

viii See OSHA news release 13-8000-NAT. April 29, 

2013. Available at: 

https://www.osha.gov/pls/oshaweb/owadisp.show_

document?p_table=NEWS_RELEASES&p_id=23994

ix PEOs provide human resource management 

services to client firms, including being responsible 

for payroll; client firms’ employees are counted on 

the payrolls of PEOs.

x

In the Annual Survey of Manufactures, the 

Economic Census, and the Current Employment 

Statistics program, production workers refers to 

workers up through the line-supervisor level 

engaged in fabricating, processing, assembling, 

inspecting, receiving, packing, warehousing, shipping 

(but not delivering) maintenance, repair, janitorial, 

guard services, product development, auxiliary 

production for the plant's own use (e.g., power plant 

workers), recordkeeping, and other closely 

associated services (including truck drivers delivering 

ready-mixed concrete). This definition is more 

inclusive than “production occupations” as defined 

in the Occupational Employment Statistics program.

U.S. Department of Commerce

Economics and Statistics Administration

1401 Constitution Ave., NW

Washington, DC 20230

www.esa.doc.gov