Wednesday, February 17, 2010

Just-in-Time Hiring

The practice of just-in-time inventory revolutionized manufacturing in the late 80's. Companies worked with their suppliers to ensure adequate inventory for their factories without carrying excess inventory.

Historically, people have watched for shifts in temporary hiring to signal changes in the labor market that might lead to increased permanent hiring. However, I've been arguing that "this time it's different" and temporary hiring might simply be signally a shift in hiring patterns b/c we're all temps now.

Well, now it seems that the economists are starting to get on the same page.

Use of Temps may no longer signal permanent hiring

I think temporary hiring is less useful a signal than it used to be," says John Silvia, chief economist at Wells Fargo. "Companies aren't testing the waters by turning to temporary firms. They just want part-time workers."

Companies "don't want to hire permanent workers and then have to turn around and get rid of them six months later," he says.

Hmm, maybe the sun won't rise tomorrow? I only pose the question because the impossible seemed to happen last year when Google actually shrank.

Google’s headcount actually shrunk in 2009 for the first time since the company has been public (and most likely for the first time ever, given Google’s growth spurt).

In the filing, the company disclosed that it had 19,835 employees at the end of 2009, compared with 20,222 at the end of 2008. That’s a modest drop of just under 2%, but a drop all the same.

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