Why is U.S. manufacturing growing while traditional hiring data suggests factories aren’t adding workers?
By Rick Hermanns, President & CEO, HireQuest
- Manufacturing hiring isn’t slowing, but is shifting to temporary and temp-to-perm staffing models.
- Staffing firms now provide one of the earliest indicators of manufacturing hiring demand, with national payroll data alone missing a significant share of today’s manufacturing hiring activity.
- Temporary work has become a strategic pathway to permanent employment for job seekers, not a fallback option.
- Manufacturers are hiring across both frontline production and skilled technical roles.
- Flexible staffing helps manufacturers grow while managing economic uncertainty.
Manufacturing is caught in a contradiction. According to S&P Global, in June 2026, job cuts at U.S. factories ran near their highest levels since the end of the global financial crisis in 2009. On the flip side, manufacturing is growing at its fastest pace since 2021, with the ISM manufacturing index reporting six straight months of expansion. How can both things be true?
Production is expanding in many sectors, yet national payroll data suggests hiring remains soft. This apparent disconnect has led many observers to conclude that factories are waiting for confidence to return. However, from where staffing firms sit, manufacturing companies haven’t stopped hiring. They’ve just changed how they hire.
Across industries, including manufacturing, employers are increasingly filling positions through temporary and temp-to-perm assignments before committing to permanent employees. What once primarily served as a way to manage seasonal demand has become the leading hiring strategy.
This shift helps explain why the labor market can appear stagnant even as businesses continue expanding operations. Manufacturing illustrates this transformation particularly well.
On paper, national indicators make it appear as though factories are growing without adding workers. In some cases, this may be true as operations transition to automated operations. Overall, however, the story on the ground looks different.
From what we’re seeing in our staffing business, demand for manufacturing labor in our order book has accelerated well beyond pre-pandemic levels, with no signs of pulling back. We saw that opportunity early, which is why we acquired Snelling in 2021 to build on its established manufacturing staffing business. Since then, we’ve expanded that platform significantly, and the results reflect both the strength of the market and the investments we’ve made.
To illustrate that, our Q1 2026 manufacturing revenue alone already reached more than three-quarters of our company’s entire 2020 performance, with annualized results running roughly three times above pre-pandemic levels. This includes expansion of our manufacturing footprint from 32 states in 2020 to 35 states in the first quarter of 2026 alone, supporting customers in food production, metal fabrication, solar assembly, packaging, and other industrial sectors.
That demand shows up across the full range of roles a manufacturing floor needs, not just the specialized ones. While we continue to fill the on-demand, contract-based production roles manufacturers depend on to meet immediate labor needs – pickers, packers, assembly line workers, and machine and injection-molding operators who can step onto the floor and start production immediately – we’re also seeing strong demand for more skilled manufacturing talent. As labor shortages persist further up the line, we’re increasingly placing skilled machinists, maintenance specialists, automation technicians, and process engineers in temporary assignments that often convert to permanent roles. Together, these two ends of the workforce – the production roles that keep the line running today and the technical roles that keep it running smart – are fueling the growth we’re seeing.
As the current wave of AI, automation, and robotics reshapes the factory floor, we expect demand for both to keep climbing in tandem: more sophisticated systems still need people to operate, maintain, and support the physical production process around them, not fewer.
As national employment reports continue to capture permanent manufacturing job numbers once they appear on company payrolls, staffing firms often see hiring activity weeks – or months – before those workers ever show up in official employment data. Companies typically contact staffing partners before opening permanent requisitions because they need labor immediately while preserving the ability to remain flexible.
While staffing demand has become an early indicator of employer confidence, this evolution also changes how workers should think about temporary employment.
For years, temporary jobs carried the perception of being a fallback option when permanent work wasn’t available. Today that distinction is increasingly outdated. For workers navigating today’s economy, temporary work is often the best way to get your foot in the door – not the last resort.
Many employers now prefer to hire people they’ve already watched succeed on the job. A worker who has demonstrated reliability during a temporary assignment often has an advantage over an outside applicant submitting a résumé online. Instead of competing against hundreds of unknown candidates, they’re competing from inside the organization.
For younger workers entering the labor force, professionals changing careers or experienced workers returning after retirement or caregiving responsibilities, temporary assignments increasingly provide the most direct route into organizations whose traditional hiring processes have slowed considerably.
Still, many job seekers feel frustrated. Headlines describing a “stable” labor market often don’t match the lived experience of people sending dozens of applications without hearing back. In today’s hiring landscape, we expect temporary hiring to continue growing, with increased conversions into permanent roles. That’s exactly why now is prime time to take the leap into the manufacturing space, or roll up your sleeves and learn a trade. These roles are increasingly one of the clearest paths to long-term financial stability.
For employers, the current environment demands flexibility. Demand forecasts remain difficult to predict. Input costs fluctuate with tariffs, supply chain disruptions and energy prices. A permanent hire represents a long-term financial commitment at a time when many executives have limited visibility into what the next six months will bring.
A temporary assignment changes that equation. Instead of adding fixed costs, companies can adjust labor as business conditions evolve while evaluating workers in real operating environments before extending permanent offers.
Instead of posting a job, screening hundreds of résumés and making a permanent offer, many employers now bring in workers through staffing partners, assess performance on the job and convert proven employees into permanent roles when confidence improves. The process reduces hiring risk while giving operators more financial flexibility during uncertain economic conditions.
If you only look at permanent payroll numbers, you’re missing a significant part of the manufacturing labor market story. The hiring is happening, but through a different channel – one that gives employers flexibility, workers a foot in the door and has a strong pipeline to continue providing employment opportunities as U.S. manufacturing continues to grow.
About the Author:
Rick Hermanns oversees one of the largest staffing, recruiting and talent management networks in the US. Beginning as an owner of a single staffing franchise in 1991, he has since grown HireQuest into a 400-plus-location powerhouse that has achieved consistent profitability through a community-based franchise model and strategic acquisitions. As a trusted voice on workforce trends, he regularly shares insights on LinkedIn and has been featured in FOX Business, Bloomberg and Business Insider.
Read more from the author:
How to Win in Industrial Hiring in 2026 | Industry Today, 2/5/2026
Hiring outlook 2026: The year the labor market resets | Staffing Industry Analysts, 12/16/2025
