March 29, 1998

Growing Non-Traditional Workforce Spells Opportunity With Temporary Agencies

 

By the reckoning of the National Association of Temporary Agencies, more than 50 percent of the workforce will be contingent in some way by the year 2000.

“Contingent means anybody who is not working a normal 40-hour week,” said Kay Cadero, a sales representative at Volt Services Group, one of the temporary placement agencies that will be represented at this year’s Career Fair.

“They could be a temporary worker, a freelancer or a subcontractor - anybody in a 1099 position,” Cadero said.

1099 refers to the form which the IRS uses to track the earnings of people not traditionally employed.

“It means anybody who pays their own taxes and takes care of their own retirement,” said Cadero.

“The workforce is changing,” she said, “and people aren’t staying with an organization for years and years like they used to.”

Diverse forces are driving the change. Self-employment is an attractive option for many professionals with skills in high demand. They prefer the flexible hours and the sense of control they derive from having their own businesses.

And many companies prefer to outsource services which traditionally were handled inhouse, said Tami Legler, branch manager of the Spokane offices of Accountemps and OfficeTeam.

“It’s just a matter of being more sophisticated in their business practices: Instead of the traditional method of hiring someone into a capacity and trying to stretch their skills around everything that needs to be done, you can bring in someone on a short-term basis to address particular projects and needs.

“You begin staffing more strategically.”

Temporary placement agencies have traditionally helped companies fill seasonal positions,which, in the past, have tended to be entry-level jobs in such fields as light manufacturing, where assembly workers can be hired to fill a short-term need.

“And there’s still a lot of need in those temp-only positions,” Cadero said. “If you’re a seasonal organization and you are only going to need people in the summer for a couple of months, it’s not worth it to hire them and then let them go.

“Sometimes, it’s for as little as three hours - somebody needs someone to cover the phones or unload a truck. It’s very temporary sometimes.”

But the temp strategy has grown to include positions which once were considered the domain of full-time employees.

Accounting is a good example.

“That role has expanded because business recognizes the cyclical nature of accounting,” Legler said. “It makes more sense to bring in an individual during month-end close and year-end close, during audit and during budget.”

And in today’s increasingly specialized world, it sometimes takes an expert to get the job done right and done on time, Legler said.

“The true cost benefit is that we bring highly qualified candidates to an organization to get the job done accurately and efficiently. The employer can bring an expert in for a particular project - you bring in someone for whom that job is their specialty and they get it done more quickly and efficiently.

“Businesses can tap into a source like this and bring in expertise that they don’t necessarily need to pay for on a year-round basis.”

And because the temporary worker is an employee of the staffing agency, that company bears the cost of the benefits package.

“When you think about it,” Cadero said, “these companies are being charged all this money, but it’s cost-effective because most staffing agencies hire large numbers of people. So our Labor and Industries ratings are low and our unemployment insurance costs are low.

“When you add a small profit on top of that, we are able to pass those savings on to the customer.”

Moreover, the cost of maintaining a large staff has grown more expensive, what with the high cost of benefits, along with the potential for liability based on discrimination suits and other legal actions.

By letting employers “try before they buy,” temp services help minimize some of those risks.

“It can be very expensive to own an employee these days,” Cadero said. “The cost of hiring - and sometimes firing - an employee is so high to an organization that they are choosing not to go that route until they are 100 percent sure that it’s the right fit.”

So the employer contracts with staffing agency to places a temporary worker in a position within the company for a trial period of, say, 90 days.

By the end of the trial period, both employee and employer should know whether the fit is a good one.

The agencies shoulder other responsibilities as well, including the costs of advertising, screening and interviewing potential employees.

As the temporary workforce becomes increasingly upscale, employer’s needs become more specific.

“It used to be that a service could throw bodies at a problem,” Cadero said, “but today we have to be more selective about who we hire.”

Today’s staffing agency tests candidates to assess their skill sets and aptitudes. They check references, work history and more.

“The services are doing background checks that include credit, financial, Department of Motor Vehicles and criminal records. We do those for some customers, when they request.

“We’re doing drug screening more frequently,” Cadero said.

“I think with the larger organizations, the human resources department still exists, but for the mom-and-pop business looking to cut expenses, this is a good place to start.”

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