Temp Agencies in New York Booming as Businesses Regroup

For the growing ranks of unemployed, the reorganization of companies formerly located in the World Trade Center could provide some relief.

Indeed, the need for temporary workers in the city increases as companies located amid the rubble begin to set up shop again, according to managers at temp agencies throughout Manhattan. Companies affected by the bombing have contacted temp agencies seeking a wide range of personnel -- everything from broker assistants to accountants to data-entry clerks.

After scrambling for new office space, these companies now need to get their businesses back in order. First priority will be rebuilding key profit centers, notably their investment banking divisions, says Irene Dajka, a branch manager of Talent Tree. Several of its clients had offices in the World Trade Center, including Oppenheimer, Merrill Lynch, Nomura Securities, Lehman Brothers and American Express. "That's their cash cow," she says. "This will require the work of broker assistants, analysts, administrative and IT staff."

A Temporary Phenomenon? There's a link between demand for temp work and GDP

Source: American Staffing Association, U.S. Bureau of Labor Statistics, and U.S. Bureau of Economic Analysis

Next, companies will need to straighten out the financial havoc that the disruption created in their businesses and budgets, Dajka says. This will require intensive work by accountants, analysts and data-entry clerks. "For Empire Blue Cross Blue Shield, this will mean [finding] claims adjusters, auditors, actuaries and many clerical and administrative personnel who can do data entry and filing," Dajka adds.

Eventually, after the offices are ramped up, companies likely will seek marketing personnel to "to reassure [clients] ... that their business is sound," she says.

In the coming months and years, construction also will flourish. "Clearly, it is going to be huge, although we don't have any orders at this point. All of our efforts right now are on clean up," says Tom Gilbert, regional vice president of Labor Ready, which supplies construction workers. Adjacent to the World Trade Center, American Express and Chase hired Labor Ready to clean up the smoke and dust that blew into their offices.

How long temporary workers will remain in demand depends partly on the availability of new permanent office space. As long as the some of the companies work out of temporary spaces, they likely will rely on temporary people. Most of these companies expect to be in temporary offices for three months to a year. After that, the business now flooding into New York temp agencies will subside.

The high demand for temporary workers in New York is undoubtedly welcome news for those who have been laid off, but it's an anomaly to what is happening in the rest of the nation. Elsewhere, temporary workers are not in such high demand. The number of temporary workers employed in the U.S. has declined 5% in the first eight months of the year, according to the most current data from the Bureau of Labor Statistics.

And national temp agencies don't expect the picture to improve any time soon. The employment picture in the rest of the nation already had been weak, and the destruction caused by the terrorist attacks has pushed even more people out of work, says Pete Leune, investor relations officer with Randstad. "Before the attack on the World Trade Center and the Pentagon, we expected a short-term improvement in the situation. We do not know how the airline and other industries will be affected by this attack, what the possible macroeconomic effect might be," he says.