‘Temp’ work force a boon to business

KANSAS CITY, Mo. — Thirty years ago, “just-in-time delivery” of parts was embraced by U.S. manufacturers as a cost-cutting and efficiency-enhancing business practice.

Today, “just-in-time delivery” is as likely to refer to people.

The use of a just-in-time work force has fractured workers’ voices into many different parts.

Economists’ definitions vary as to what constitutes the just-in-time work force. They are called, among other labels: part-time, temporary, permatemp, independent, contract, on-call, free agent, freelance, day labor, contingent and nonstandard.

These nonpayroll workers — who may be lawyers, computer analysts or designers as often as they are custodians or catering help — now make up an estimated 25 percent of the work force. And that number, more than 34 million, may be undercounted, according to researchers for the government-sponsored Iowa Policy Project Survey of Fringe Benefits and Nonstandard Work, published last year.

With the exception of some part-time employees, members of this group, according to the U.S. Bureau of Labor Statistics’ definition, are “those who do not have an explicit or implicit contract for long-term employment.”

Many of them are doing work that “permanent” employees used to do.

Until four years ago, Kansas City-area resident B.A. Nelson was a “permanent” employee. But after being let go in a corporate downsizing, he worked a series of contract jobs that took him all over the country.

Today he is back at the telecommunications company where he formerly was permanent — but on a contract that could end with as little as two hours’ notice.

“How’s that for job security?” Nelson asked. “Plus, I’m making about $15 an hour less than I used to make, and I have no paid vacation, no sick days, no employer-sponsored health care. I’m not on their bonus plan, and I don’t have employee stock purchase plan access.”

Yet he’s doing more sophisticated planning work and project management than he did as an employee.

There’s a practical business reason that companies shift to just-in-time labor: They can adjust their payroll expenses more easily in response to fluctuating demand for their products or services.

Sylvia Allegretto, an economist with the Economic Policy Institute, says use of a just-in-time work force is driven by Wall Street’s pressure on public companies to show profit increases even in down times. They do that, when they can, by paring labor costs, she said.

The American Staffing Association, which represents agencies that supply workers on a temporary or contract basis, said last week that the second quarter marked the seventh consecutive quarter in which U.S. staffing firms had greater sales gains than in the same period of any previous year.

“While we’re seeing slower employment growth in recent months, staffing companies continue to report increased demand from customers looking for work force flexibility and access to talent,” said the association’s president, Richard Wahlquist.

Carl Camden, chief executive officer of Kelly Services, said the use of temporary workers is burgeoning in information technology, engineering, nursing and other skilled professions, far different from clerical and janitorial jobs that once characterized the temporary work force.

It doesn’t necessarily save per-hour employment costs to use temporary workers, Camden said, but it does save employers recruiting time and gives greater flexibility in managing total compensation costs.

That flexibility is chosen for lifestyle reasons by some temporary or contract workers. Some independent contractors choose to go into business for themselves. As entrepreneurs, they’re willing to take the risks associated with weathering income breaks between contracts.

But the downside, economist Allegretto said, is that “we’re seeing many workers lose their jobs, but regain employment on a contract or contingency basis. Their ‘jobs’ are pretty much the same, but they’re buying their own vacations, their own health care, their own retirements.” Many contingent workers miss having traditional employee benefits such as employer-sponsored health insurance, paid vacation time or employer contributions to retirement savings accounts.