Temporary employment/staffing spending is expected to drive 50% ($25.3 billion) of total HR related

Over 300,000 small businesses recruit or hire employees online and some 200,000 small businesses purchase human resource services online.

U.S. small businesses (SBs) will spend more than $50 Bbllion in 2002 on human resource (HR)-related services such as temporary staffing, employee training, and other outsourced services, indicating that the SB market will be a significant contributor to the awaited U.S. economic rebound.

The findings are by New York-based Access Markets International (AMI) Partners, Inc., a consulting firm specializing in IT, Internet, telecom and business services market intelligence, trends and strategy with a strong focus on global small and medium business (SMB) enterprises.

While the American unemployment rate stood at 6.0% in April, AMI-Partnersí study reveals that U.S. small businesses will serve a robust engine of the U.S. economic growth as evidenced by some 3.8 million SBs that plan to hire additional employees.

The staffing industry business cycle is extremely sensitive to a downward shift in the economy, observed Jackie Chan, a research analyst at AMI. As the economy accelerates, temporary employment is the first to pick up as companies want to ensure the improvement is sustainable. AMI estimates that U.S. SBs spend approximately $25.3 billion annually on alternative staffing options, and projects such spending to grow at a compound annual growth rate (CAGR) of 13% during 2001-2005.

Having employees available on a temporary basis enables SBs to flexibly adjust their labor force, maintain lower operating costs and respond adeptly to changing business demands in a time of uncertainty. Kelly Services, one of the largest temporary staffing companies in the U.S., has expanded beyond placing clerical temporary help to providing industry specialists on a temporary basis. Firms such as Manpower Inc., a leading workforce solutions firm, also recognizes such opportunities and offers both flexible and transitional staffing to accommodate HR requirement fluctuations associated with an uncertain business climate.

Online Recruitment/Purchasing AMI-Partnersí study further revealed an estimated 300,000 SBs have turned to the Internet to recruit employees, while another 200,000 SBs have purchased HR services online. AMI expects these numbers to double in 2002, with the trend reflecting the evolving nature of staffing and an opportunity for SBs to benefit from adopting new models of HR operation. Staffing companies like Kforce Inc. (previously Romac International) and TMP Worldwide (through its acquisition of Monster.com) are both embracing the Internet with a hybrid strategy.