U.S. Department of Commerce

Economics and Statistics Administration

Temporary Help in Manufacturing 

 

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

 continues to grow. According to data from the Bureau of Labor Statistics’ 

Current Employment Statistics (CES) program, the temporary help industry only 

accounts for 2 percent of all employment in the U.S. economy (as of July 2014), but 

accounts for 11 percent of all the jobs created since the end of the recession. 

Growth has continued steadily in 2014, with 107,100 temp jobs added during the 

first seven months of the year. Temp workers are a critical, growing component of 

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

as explored below.i 

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 

expand their permanent workforce–converting those whose skill sets and work ethic 

fit well with the company and position. 

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.ii

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. Temp jobs also typically pay less than comparable 

permanent employment and may not provide benefits such as health insurance and 

paid leave.iii 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.iv In 2013, the Department of 

By 

Jessica R. Nicholson 

Thanks to 

David Langdon, Ryan 

Noonan, Office of the 

Chief Economist, and

Jane Callen, Editor

ESA Issue Brief

# 03-14

August 13, 2014

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

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.v

So, how many temps work in the manufacturing 

sector? The government’s official employment 

statistics, however, 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. 

The OES program does not publish data on the 

temporary help industry, but instead on the 

broader employment services industry. About 

80 percent of employment services jobs are in 

temp help and the rest are in executive search 

services and professional employer 

organizations (PEOs).vi In 2013, there were 

696,330 jobs in production occupations in the 

employment services industry. If all of those 

jobs were on temporary help industry payrolls, 

and all the temps were placed in manufacturing 
U. S. Department of Commerce, Economics and Statistics Administration Page 3

establishments, then we could say that the real 

number of production jobs in manufacturing 

would be about 10 percent higher than the 6.2 

million counted in the industry that year.

This upper bound is somewhat unrealistic, 

because it assumes that ALL of the people 

performing production work in employment 

services are temps 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 

the fact that not all employment services jobs 

are in temp help and that not all production 

jobs are in manufacturing, then we arrive at a 

lower estimate of 398,321 temps doing 

production work in manufacturing. This 

number would still boost the ranks of 

manufacturing production workers by about 6 

percent. 

Data from the Census Bureau’s Annual Survey 

of Manufactures and Economic Census also help 

to quantify manufacturers’ use of temps; 

manufacturers are asked how much they spend 

on temporary and leased employees. This data 

is similar to the jobs data in that it includes 

spending on PEOs and is not limited to 

production occupations. In 2011, manufacturers 

spent $27.2 billion on temporary and leased 
Page 4 U. S. Department of Commerce, Economics and Statistics Administration

employees. Comparing this to total payroll and 

payroll of just production workers (if we make 

similar assumptions as above) suggests that this 

amounted to somewhere between 4.7 percent 

and 8.0 percent of labor costs. Recall that this is 

slightly less, but broadly similar to, the 

employment ranges. This is particularly true if 

we consider that the average temp works fewer 

hours per week than the average manufacturing 

production worker—around 35 hours versus 42 

hours over the past few years, as measured by 

the CES.vii

As their name suggests, 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. 

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

Polivka. “Manufacturers’ Outsourcing to Staffing 

Services.” Cornell University ILR School. June 2012. 

Available at: 

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

5/iss3/3/. 

ii Dey, Houseman, and Polivka.

iii 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. 

iv “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. 

v

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

vi PEOs provide human resource management 

services to client firms, including being responsible 

for payroll; client firms’ employees are counted on 

the payrolls of PEOs.

vii 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