In the 1990s Chicagoan Paul Sonju easily found temporary jobs through Manpower Inc., a Milwaukee-based staffing firm with locations in Chicago and around the world.

Manpower has placed Sonju in various positions including manual labor, painting, grounds-keeping, leaf-trimming, assembly line operation and clerical work. In 1998 Manpower found for him a data entry job at AT&T Inc. that turned into a permanent position—until Sanju was laid off 20 months ago.

“It’s difficult,” Sonju said, standing outside Manpower’s Chicago office where he recently completed a training session. “There’s not that much out there, and it seems like every job that is out there, there are a lot of people applying for it.”

Despite a rapid decline in companies seeking its services, Manpower is still turning profits, in part due to its extensive networks overseas, where the behemoth firm earns 90 percent of its revenues. Manpower’s Chicago operation is seeing an influx of temporary-work applicants like Sonju who are willing to accept diverse jobs at lower wages.

While Manpower provides a range of services, including online training courses, vocational school programs, and job placement for executives and managers, its core business remains that of connecting corporate employers with blue-collar workers.

During 2008 Manpower increased its profits by 6.6 percent to $4.1 billion, bucking the down market.

However, after growth in previous quarters, profits in the fourth quarter ended Dec. 31 dropped 9.2 percent from the same period a year earlier, which analysts attribute to the global economic recession. Fourth quarter revenue from services dived 18 percent worldwide and 5.2 percent within the United States.

Competitors such as Kelly Services Inc. and Spherion Corp. suffered much deeper declines and lost money in 2008.

In the Chicago area, Manpower operates five locations, including a store-front office in the Loop. While the Chicago metro area operation has not shed any staff, some employees in outlying suburbs were transferred to Manpower offices in other regions.

Chicago Metro Branch Manager Carolyn Chiovino has seen a sharp increase in applications from job seekers and at least 50 percent more participation in Manpower’s online training courses. She’s also noticed increasing willingness among applicants to accept lower-paying jobs in new industries.

“Our phone rings off the hook here in Chicago,” she said in an interview. “[Job seekers] are getting to the point of, sometimes, desperation.” 

By contrast, instead of the usual spike in corporate business in January and February, Chiovino reported a disappointing “steady stream” of employers seeking workers. In fact, she’s had distressing conversations with corporate clients that were forced to let employees go.

“A lot of people think, ‘Well, they’re laying off a thousand people; they’re heartless,’” Chiovino said. “I’ll tell you, I’ve seen a lot of my [corporate] clients in tears.”

Vishnu Lekraj, an analyst with Morningstar Inc. who covers employment-related services, said that, despite the hit Manpower is taking in the short term, the company is well-positioned going forward. He noted that during the 2001 recession Manpower’s revenues declined 3 percent for one year but quickly turned positive.

“They’ve got a well-respected brand, and that attracts good workers and good positions towards them and they’re one of the biggest players in their market worldwide,” he said. “But if businesses can’t get loans and can’t borrow money to expand or continue operations, then the demand for employment is going to fall, obviously.”

Over the past year, Manpower’s stock has swung from a high of $70.71 to a low of $22.61, and the stock has been sliding downward since early August. On Wednesday it closed at $31.26 for a price to earnings ratio of 11, which makes it slightly overvalued compared to the S&P 500 Stock ratio of 10.5.

In a Feb. 3 report, Morningstar's Lekraj lowered his fair-value estimate for Manpower to $44 from $52, but predicted that “the firm’s diversification and strong cost management will keep its margins from turning negative.”

Lekraj also noted some risks facing the company, including further downturns in the global economy and possible anti-competition fines in France, where Manpower obtains 33 percent of its revenue. The United States is Manpower’s second-largest market, with 10 percent.

Analysts polled by Zack’s Investment Research estimate that Manpower’s earnings for the current quarter ending March 31 will be 10 cents per share. Last quarter, Manpower reported earnings of 89 cents per share, compared with Zack’s Investment Research consensus prediction of 81 cents per share.

Manpower’s quarterly “Employer Outlook Survey,” which asks employers to anticipate their hiring activity over the next three months, listed the Chicago area among the weakest for job openings, with employers anticipating a 6 percent overall decline in staff levels between Jan. 1 and Mar. 31.

However, Chiovino did report one potentially positive sign: an upsurge in clients’ interest in temporary-to-hire positions, as opposed to permanent positions. This could be an early indicator of an economic turnaround because, as businesses emerge from a recession and begin hiring again, they often look to temporary workers first—an option that minimizes their risk.

Seeking to capitalize on this trend, Chiovino has been working with hesitant corporate clients to reduce the costs of Manpower’s services, which includes encouraging applicants to work for less.

Sonju hopes that he’ll be one of the lucky hires.

“I was looking for a job that paid $10 an hour or more,” he said. “Now that I’m looking for work again and I’m not getting anything, I’ve lowered that amount to about $8 or so. If that doesn’t work, I’ll even go lower.”