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Temp business booms
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November 25, 1997: 3:34 p.m. ET
Shares of specialty staffing companies are sizzling, despite volatility in market
From Correspondent Fred Katayama
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NEW YORK (CNNfn) - It is the busiest time of year for temporary agencies, and they've got their hands full with requests.
Especially for accountants.
"We gave bonuses last year of about $35,000 to people just for sending people to us we could put to work," said Richard Lewis, president of Accountants Overload.
In technical fields, demand for software programmers and system engineers outstrips supply, so agencies like Manpower and Romac International are re-training workers themselves.
"Our member firms are able to offer people training and offer them a variety of different assignments so they get exposed to different kinds of settings," said Richard Wahlquist, executive vice president of the Association of Temporary Services.
Shares of industry giant Manpower have suffered because the strong dollar has eroded its overseas profits.
Stocks of specialty staffing companies, on the other hand, are on the upswing. They have posted returns of more than 38 percent so far this year, outperforming the broad S&P index.
Demand for software programmers is particularly acute, as companies race to fix the so-called "Year 2000" bug - a software glitch that causes computers to mistake the last two zeros of 2000 for 1900.
As companies downsize, Smith Barney predicts the $43 billion temporary help industry will nearly double to $75 billion by the year 2005.
"The current economic environment as we discussed is pretty much custom tailored to top line growth and earnings growth in the staffing industry. Low interest rates, low unemployment, and moderate economic growth all support the industry," said Brian Kearns, an analyst for Smith Barney.
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