Temp jobs are growing fast in Italy and Spain. Is that a good thing?

Seek and ye shall find.
Seek and ye shall find.
Image: EPA/JuanJo Martin
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Unemployment is stubbornly stuck at around 13% in Italy and 23% in Spain. It may seem strange, then, that Adecco, the world’s largest staffing agency, is seeing its fastest growth in these places.

The Swiss group reported its latest quarterly results yesterday (Aug. 11), with better-than-expected revenue growth reflecting the gradual improvement in the global economy. Adecco, which generates three-quarters of its revenue from temporary job placements, is seen as something of a bellwether—companies tend to hire temps before they invest in permanent staff.

That’s good news for Italy and Spain, where Adecco’s second-quarter sales rose by 19% and 13%, respectively, versus the same period last year. That easily outpaced overall growth of 4% in the quarter, after adjusting for currency movements:

Spain is in the midst of an economic growth spurt, which its leaders say is down to the labor-market reforms they have been implementing in recent years. Italy’s economy is stagnant, but the government has only recent got around to making its labor laws more flexible.

Others, however, say that low-paid temp jobs with little stability are not what either economy needs right now. While temp jobs have their place, these insecure positions do little for productivity or pulling people out of poverty. So-called zero-hours contracts in the UK have generated controversy on these points recently, despite helping to boost employment and economic growth in the country overall.

Indeed, Italy’s recent reforms include the introduction of a uniform temp contract that provides rising job protections over time, and can only be renewed for up to three years before a permanent offer is made. It replaces other types of contracts that critics say allowed companies to keep workers, especially young workers, in a state of permanent limbo.