Freelancers and Temps See Mixed Signals of a Recovery

For Janna Kalichman, "even" is the new "up."

While the Los Angeles-based marketing and public-relations specialist has seen an uptick in the amount of work she's getting this year, the same can't be said for her income, thanks to pay rates that have fallen steadily since the Great Recession began unfolding.

"Clients are paying me significantly less for the same types of jobs I did three years ago," says Kalichman, whose company, AmIWrite, has clients in the consumer products, hospitality and entertainment industries. "I have to take on more jobs to cobble together my former income."

While the unemployment rate for full-time employees has remained frustratingly high, the sector of the workforce specializing in contract, freelance and short-term jobs has taken on a split personality of sorts.

Specialists in public relations, advertising and other creative and professional services are either scrambling to maintain their income levels by taking on more jobs, or coping with less work and less take-home pay. But larger companies appear to be taking baby steps toward expanding their businesses by hiring more temporary workers. The staffing-industry workforce has increased by about 400,000, or 27%, to about 2 million people within the past year, the American Staffing Association said in a Sept. 3 statement.

A Small Bump Up in Temp Hiring and Salaries

ASA members "report that businesses are being very strategic about adding back permanent jobs, timing employment increases with sustained increases in demand," said Richard Wahlquist, the ASA's president and CEO, in the statement.

Freelance work at the professional level is harder to track, though, because most of that work isn't handled by staffing or temp agencies. oDesk Corp., a Menlo Park, Calif.-based self-service online work marketplace, says demand has doubled in the past year for the more than 300,000 contractors in its database, whose specialties range from Web and software development, design and multimedia to customer service and marketing. Further, their average hourly rate has risen about 15% since March 2009, when it recorded its lowest point on record.

That said, oDesk's average paid hourly rate is slightly less than $18, a fraction of the hourly rate demanded by upper-level contract professionals. And that's the work gun-shy companies appear to be either delaying or bargaining down as they take a wait-and-see approach with the economy.

Regardless, the contract and freelance market bears watching as the full-time unemployment rate has remained stubbornly high. U.S. unemployment actually rose 0.1% to 9.6% in August, though that was down slightly from 9.7% a year earlier, the U.S. Bureau of Labor Statistics said in a Sept. 3 report. Even more troubling, the number of people unemployed for at least six months in August jumped 24% to 6.25 million, according to the BLS.

Manpower Predicts a Full-Time Hiring Bump

Still, there are signs of life in the hiring market for both full-timers and free-lancers. The number of U.S. job openings increased 6.2% in July from June and surged 30% from a year earlier, with the hospitality, health-services, education and construction industries leading the charge, the Labor Department said Sept. 8.

Milwaukee-based staffing company Manpower (MAN) predicts that U.S. companies will boost fourth-quarter hiring 5% from a year earlier, citing the results of a survey it released Sept. 7. Still, while companies in 11 of the 13 industry sectors Manpower surveyed have a positive outlook on the economy, almost three-quarters of respondents said they had no plans to change staffing levels in the fourth quarter, leaving full-timers and contractors alike on edge.

"Looking back at where we were in 2009, the employment environment is more promising now. However, many employers are still unsure about how the economy will fare and how robust the recovery will be," said Jonas Prising, Manpower's president of the Americas, in a statement. "Until we move beyond this uncertainty, we are unlikely to see employers hire in a meaningful way, and this is evident in their consistently modest hiring plans."