April 9, 2012 / 5:12 PM / 7 years ago

Staffing shares mixed after slow U.S. jobs growth

(Reuters) - Shares of staffing companies were mixed on Monday after a sluggish U.S. jobs growth report for March, with demand for temporary workers expected to trend higher as companies seek flexibility in an uneven economic recovery.

U.S. employers in March hired the fewest workers in any month since October, the government reported on Friday. The stock market was closed for the Good Friday holiday when the data were released.

“The trend we’ve seen over the last three or four months continues, which is a slow, kind of trudging, clawing out of the hole that we’ve been in,” said Jeff Joerres, chief executive of Milwaukee-based employment services company ManpowerGroup.

ManpowerGroup (MAN.N) shares fell 2.6 percent in midday trading. Robert Half International (RHI.N) dropped 3.1 percent, Kelly Services (KELYA.O) declined 1.7 percent, Hudson Highland HHGP.O rose 1.4 percent and TrueBlue Inc (TBI.N), which focuses on blue-collar jobs, dropped 3 percent.

In European trading, Adecco ADEN.VX rose 1.2 percent, Randstad (RAND.AS) increased 2.7 percent and Michael Page MPI.L rose 0.9 percent.

“For the second half, we expect more of the same — slow, having some spurts of better months than not,” Joerres said.

“If we get high fuel prices, government bickering, the Euro zone continues to be challenged, companies are going to try to stretch along the lines of more with less. They’ll be asking more from their current employees until they can get some better visibility.”

The U.S. temporary workforce, seasonally adjusted, lost 7,500 jobs in March, the first drop since June, but February’s hiring increase was revised upward by about 10,000 jobs to a total of nearly 55,000.

Companies usually add temporary workers before committing to permanent hires, making the staffing sector a leading indicator of broader hiring.

Flexible staffing as a percentage of nonfarm payrolls paused at 1.87 percent in March, following a steady rise from 1.75 percent in July 2011 and well above 1.34 percent in June 2009, J.P. Morgan analysts said in a Monday note.

“In our view, penetration will continue to increase as the memory of the great recession continues to spur businesses to look to flex staffing as a source of agility,” the analysts wrote.

Joanie Ruge, chief employment analyst of Randstad Holding U.S., a unit of Netherlands-listed Randstad, said the March U.S. employment report reinforced her view that companies are still creating jobs while remaining cautious.

“Most of the positions, though, that are being created are in the professional sectors, so we’re seeing a lot more in accounting and finance positions, and information technology is the hottest sector,” she said.

Many of the jobs are long-term projects that may eventually become permanent, Ruge added.

“Companies don’t want to be forced to lay off people down the road,” she said. “There’s still a little uncertainty in the markets with what’s happening in Europe, even though the U.S. does seem pretty strong, and I think we’re going to continue to see good jobs growth.”

Reporting By Lynn Adler; editing by John Wallace

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