Deciding Whether to Use Temporary Workers
If your organization faces seasonal or project-generate demand for labor, or if you're in a situation that requires finding a substitute for an employee out ill or taking care of short term family demands, you have these options (unless you have a union hiring hall or civil service):
1. Internal "floater" pool in large organizations.
2. Develop pool of "on-call" workers.
3. Subcontract or outsource jobs to specialty firms.
4. Identify reputable temp agency to provide "seasonal, special, or temporary" labor allowable under New Jersey law. You and the agency have all the resonsibilities and liabilities.
If your organization wants to reenginner to retain core functions and outsource other functions on an ongoing basis, then:
I. Temps are not appropriate. Remember "downsizing"? The American Management Association's studies show no long-term productivity or profitability gain. You might save money on the short term by externalizing the cost of benefits/cutting labor expenses, but you later create new problems:
a. Long range social capital, productivity, and staff morale often decreases with a divided workforce.
b. Your liability (EEOC, ADA, sexual harrasment, etc.) is now expanded since actions of the temp agency as well as your staff are both subject to legal recourses.
c. By permatemping, you help undermine the pension, health insurance, and training systems. Regulatory bodies are at last catching up with this shell game:
In Vicianzo v. Microsoft, the IRS found that an employer cannot label certain employees "independent contractors" to avoid taxes and other responsibilities. In October 1998, US Department of Labor challenged Time Warner for undermining ERISA (Employee Retirement Income Security Act) by similar false designation of employees as contingent workers.
d. We all pay higher unemployment insurance taxes
for uncompensated hospital care -- a makeshift response to rising numbers of workers without health
II. If you decide to utilize temps legitimately, how can you select a temp agency to meet your needs and be a trusted partner in this three-way employment relationship:
A. The "Best Practices" agencies described in this Consumer Guide deserve your strong consideration:
1. They have been willing to reveal specifics of their operations and benefits to workers.
2. Because of #1 status, they attract higher quality candidates.
3. They tend to be attuned to local labor markets, training resources, and employer needs -- independent of what a huge national franchise or a trade association dictate.
4. They take the longer term and higher road approach. They may bill you a dollar an hour more than other agencies, but their temp worker will probably be better skilled, more experienced, more satisfied with benefits and thus add far more value to your organization.
B. For other agencies, here are some ways to check out your prospective partner, for due diligence:
1. Ask for their 5-year litigation history.
2. Make sure there are no unresolved complaints at: Better Business Bureau, NJ Division of Civil Rights, EEOC (Equal Employment Opportunity Commission), NJ Department of Labor Office of Wages and Hours, and the NJ Division of Consumer Affairs. You wouldn't want to hire the Bergen County agency which recently was fined $450,000 by EEOC for systematic racial discrimination. You would not want to work with one of the two temp agencies found last year by the NJ Attorney General to owe $1.35 million for 1993-1996 in back wages and taxes.
3. Get a copy of their current NJ Department of Consumer Affairs registration. (In 1993, the Department of Consumer Affairs published a brochure titled Tips on Temps: Things to Know When Using Temporary Help Services to aid in assessing temp agencies. They have agreed to update this brochure).
4. Ask for prospective agency to give you references -- from both client firms and temp workers.
5. Ask agencies what to look out for from their competitors.
6. Learn the rate of retention
of the agency's workers in completing assignments and the amount and quality
of their pool of candidates or ability to recruit.
III. Once you are working with a temp agency:
A. Provide written job descriptions. (If you cannot do this, you need to do proper planning -- otherwise, confusion is certain).
B. Cultivate close communication with agency's staffer responsible for your worker(s) or site.
C. Properly orient direct hires to role, duration, and supervisory plan for temps before a temp arrives to your workplace.
D. Minimize segmentations -- all staff whould be treated as similarly as possible for good morale. (Examples include access to training, e-mail, newsletters, cafeteria, parking, holiday parties, security badges, etc.)
E. If you are "trying before hiring," make sure conversion arrangements are clear -- to agency, you supervisor who is empowered to hire, the temp, direct hires (who might also covet the job opportunity).
F. If agency uses secondary suppliers (i.e., back up agencies), clarify line of authority when a temp shows up from the secondary temp agency.
G. If you use temps from more than one agency, make supervisors aware of any differences in pay levels and plan for unified organizational management.
I. If you are unhappy with services of a temp agency, discuss this thoroughly and specify steps to be taken and results expected for remediation (similar to progressive discipline of an employee).
Selected References From Our Library
Short Term Workers Raise Long-Term Issues by Robert Grossman. HR Magazine, April 1998.
How and Why to Outsource. Published by the Outsourcing Institute.
Contingent Workers. Chapter 5 of the Dunlop Commision. U.S. Department of Labor, 1995.
Perils of Temporary Employees: Liability Lurks Under Several Federal Statues by Risa M. Mish. New York Law Journal, June 1, 1998.
User's Guide for Ordering and Managing Contract Labor. Kelly Services, 1996.
Application of EEO Laws to Contingent Workers Placed by Temporary Employment Agencies and Other Staffing Firms. published by the EEOC, December 13, 1997.
The Anatomy of Non-Standard Work: Downscaling of Jobs by Helene Jorgenson, AFL-CIO. December, 1997.