A shift in the supply and demand for workers has forced staffing agencies here and elsewhere to alter the way they do business.


Through the late 1980s and much of the 1990s, many agencies prospered mainly by supplying temporary or contract workers, whom the agencies employed while contracting their labor out to clients. Now, permanent placement is booming, with agencies finding workers for employees to hire directly, says Gary Desgrosellier, president and founder of the Spokane-based executive-search firm Personnel Unlimited Inc.


Why? Because with todays tight job market, workers can demand more than a temporary job, and employers are motivated to retain employees.


Meanwhile, placement of technical and professional personnel now is the fastest growing area for staffing companies across the U.S., says the Alexandria, Va.-based American Staffing Association. Nationwide, the last decades sizzling hot market for temporary employees has cooled dramatically, the association says.


There is a professional-recruiting trend thats growing, says Erick Fahsholtz, staffing manager at Spokane-based Provisional Staffing Services, which does everything from providing industrial labor to seeking executive-level job candidates.


Four agencies here have added divisions or at least a recruiter dedicated to direct placement of engineering, technology, sales, management, and finance professionals.


Last month, Spokane-based Humanix Corp. launched a professional-recruiting division called Promanix.


The Spokane franchise of Manpower Inc. opened a division, called Manpower Professional, last year to place degreed professionals, and Volt Technical Services has had a division to handle professional placement for about a year and a half.


In September, the Spokane office of Adecco SA, an international personnel-services company based in Switzerland, added a recruiter whose sole job is to find candidates for full-time professional positions.


The agencies say their customers are fueling such change.


In a tight labor market, companies increasingly turn to professional recruiters to find employees, especially when they need experienced technical talent, says Liz Cox, spokeswoman for Agilent Technologies Inc. here. Running employment advertisements for engineers in large newspapers such as the Chicago Tribune once was a fruitful way to find new employees, but recently such ads have attracted no qualified applicants, she says.


Its extremely competitive. Things that worked 10 years ago, five years ago, even three years ago, dont work anymore, she says. Weve turned to firms that are excellent at recruiting.


Agilent, however, still relies on temporary agencies to provide a significant number of manufacturing workers and some information-technology employees and project engineers to handle fluctuations in its workload caused by big projects and business cycles, she says.


To be sure, the temp-help industry isnt declining; it just isnt growing at the same brisk rate of the 1990s.


The American Staffing Association says that last year, daily employment of temporary workers climbed less than 4 percent from its 1998 level, which was a blip compared with the growth rate earlier in the 1990s. From 1992 to 1995, the daily average number of people sent out by temp agencies to work in the U.S. soared at an average annual rate of 17 percent. That pace slowed some from 1996 through 1998, though it still grew at an impressive annual average of 8.4 percent, the association says.


Flat temp growth


Now, Manpowers national office is telling its franchisees to expect temp-employment growth to be flat, says Tom Droz, owner of Manpowers Spokane franchise. In truth, says Droz, the volume of temporary-staffing placements handled at Manpowers office here has been flat for several years, while its Manpower Technical arm, which places computer programmers, engineers, and technicians, doubled its billable hours in 1998 over 1997.


Last year, Droz says he moved to capitalize on that trend by refocusing the franchises 32-year-old technical arm as the new Manpower Professional division.


Adecco, meanwhile, added its recruiter of professionals to carve out a place for itself in the Spokane market, says Teresa Ronngren, Adeccos branch manager here.


We needed a niche to set us apart and something to add revenue, she says, adding that Adecco already was using such recruiters elsewhere around the world.


Professional placement will grow quickly here, she says. Weve already had a good response from both endsfrom companies seeking employees and potential job candidates weve contacted.


The tale is similar at Volt Technical Services. Its professional-placement division, which it launched here and elsewhere in the western region about 18 months ago, has become one of the more profitable aspects of the company, says Jason Hatley, professional placement service manager at Volts Spokane Valley office. The division now has 45 such recruiters in Washington, Oregon, Idaho, and Northern California, including three in Spokane.


Julie Prafke, president of Spokane-based Humanix, says her company launched its Promanix professional division in response to growing demand from such customers as LineSoft Corp., Telect Inc., and Avista Corp., all of Spokane, for direct placement of technical and management-level employees. Humanix had provided placement some such workers for most of its 14 years in business, but now has put additional emphasis on that service in hopes of spurring growth.


Professional placements are up at Humanix from a year ago, with a significant jump since the Spokane company launched Promanix, Prafke says. Promanix has five employees, and she expects it will hire more next year.


The staffing industry tends to cycle between temporary staffing, in which agencies employ workers and contract out their labors temporarily, and direct placement, in which they find workers for employees to hire on a permanent basis, Prafke says. In the late 70s and early 80s, perm placement agencies, which placed workers directly with companies, thrived, but in the mid-80s, market changes lessened the demand for that type of personnel service and kicked off the temporary-labor boom, she says. Now, the pendulum is swinging back.


Nationwide, says Personnel Unlimiteds Desgrosellier, temporary-employment firms are scrambling to get into the growing market for direct placement of professionals, but he expects most will have only limited success.


Its not that easy to make such a change, Desgrosellier says. Learning the basics takes a new recruiter at least four months, and most of the recruiters he employs and his agency works with have between 12 and 20 years of experience and a careers worth of contacts in the industries they serve, he asserts. Until recruiters gain experience and contacts, their effectiveness will be limited, Desgrosellier says.


While temporary employment boomed, Personnel Unlimited added temp services in 1996, Desgrosellier says. However, with slim profit margins on temp placements, reams of paperwork in the management of temporary workers, and clients who were beginning to prefer direct placement, the companys temp-help division was unproductive, and Desgrosellier closed it about two years after it opened.


Competitive market


Before the temp-help boom, the temp-agency market here had been stable for years, with relatively few playersKelly Services, Manpower, Olsten Staffing Services of Spokane, and Humanix, Prafke says. In the early 90s, more temp agencies opened here in what Prafke calls the standard expansion of an industry in a good market.


Some agencies opened offices here to serve clients with whom they had national contracts, she says. For instance, Volt, which served Hewlett-Packard Co. nationally, opened its Spokane office to serve Hewlett-Packards Spokane division.


Temp agencies, hoping to tap into a local economy poised to grow, also were drawn to the potential they saw in Spokanes pool of unemployed and underemployed workers, says Ronngren, Adeccos manager.


Says Droz, It seems like there are too many agencies for the size of the market, but most stay in business. Theres not a tremendous amount of fallout.


Adds Prafke, We might see a little bit of a shakeout for small, new agencies.


Debbie Carrick, manager of Kelly Services Spokane and Coeur dAlene offices, says, There are so many temporary-employment services here for employers to choose from, and were all tapping the same pool of workers. To counter a tight labor market nationwide, Kelly has implemented bonuses for its temporary workers and boosted its advertising, she says.


Stiff competition in a crowded marketplace is another reason Spokane temp agencies are beginning to emphasize professional placement, says Fahsholtz, of Provisional. He adds that in some ways recruiting and placing professionals is easier than finding less highly trained workers, because higher wages are offered for professionals, and professionals usually dont have employment challenges that lower skill-level workers sometimes face, such as having to rely on public transportation to get to a job site.