More Temps on the Horizon?
Employers may want to keep a sharp eye on the temporary staffing industry. First, movement in this industry is a leading economic indicator, giving them a heads up on how tight the overall labor market may become. Second, when the economy further improves, many of the first workers hired back will be temps.
The temporary staffing industry tends to be one of the first sectors to get hit hard by a recession, as companies begin their downsizing process by shedding contingent workers. Richard Berner, chief U.S. economist at Morgan Stanley, said, "Temporary help workers have, across industries, borne a disproportionate share of the job losses; they serve as a 'shock absorber' that helps make labor markets more flexible. In recovery temporary workers will probably find jobs first."
The industry suffered one of its toughest years in 2001, posting a 14% decline in temporary staffing employment, according to the American Staffing Association. Economic forecasters at the Bureau of National Affairs were cautiously optimistic that 2002 would bring a modest recovery from the recession that began in the spring of 2001. Starting in February 2002, the number of temporary jobs did start increasing again, though so far the growth has been agonizingly slow for the industry, according to Staffing Industry Analysts Inc.
Many wonder where the first glimpse of economic recovery might be seen. In our knowledge economy, white-collar temps might provide those first encouraging signs. The American Staffing Association points to the growth of jobs requiring higher skills and education levels as being good for the temporary staffing industry. And the demand for interim executives globally has led to a whole new "head-renting" industry. Specialist firm Russam GMS estimates that the market for interim executives in the UK, for example, is growing by over 10% a year. These temporary managers are often first in line for permanent hires when the economy picks up.
So-called pink-collar temps, however, have historically been regarded as the mainstay of the temp staffing industry. The largest proportion of employees from temporary agencies (29.5%) works in administrative support/clerical occupations, according to 2001 figures from the U.S. Bureau of Labor Statistics (BLS). Still, the BLS estimates that during the 10 years between 1996 and 2006, administrative support temps – as a share of those working in the personnel supply industry – will decline by four percentage points. Meanwhile, the share of blue-collar operators, fabricators and laborers will grow by four percentage points.
Blue-collar temps are already well represented in the industry, with almost one fourth (23.2%) of temporary agency workers in operator/laborer occupations. The manufacturing sector employs over one in five workers from temporary agencies and contract firms, according to the BLS. And 19.6% of independent contractors are employed in the construction industry.
But with the predicted growth of blue-collar temps comes a concern about the high costs among temps for on-the-job injuries. Workers' compensation costs for leased employees are three times greater than for regular full-time workers and nearly 10 times greater than for regular part-time workers, according to The Journal of Labor Research. And workers in injury-prone occupations such as construction and manufacturing tend to generate much of that. These higher costs are the result of a combination of significantly higher claim severity and a much higher claim frequency rate. Although workers' compensation costs tend to be borne by the supplying agency, the client company could be sued under its general liability policy.
Why are temps more likely to apply for workers' comp? There are a variety of reasons: they're less familiar with their work environment, often less experienced as workers, less likely to be monitored for safe work behaviors, and less likely to have health insurance. Moreover, since they have less job security, contingent workers have a greater incentive to file a claim before benefit eligibility is lost. This results in more claims being filed and lengthier absences.
These and other issues related to contingent workers are bound to influence future management strategies. They'll become increasingly important as the global economy gains strength, bringing more temps into the workforce.
For full statistical information on "Employed Workers with Alternative and Traditional Work Arrangements by Occupation and Industry, February 2001," see Table 8 at the U.S. Department of Labor, Bureau of Labor Statistics Web site at
http://www.i4cp.com/hsd7WP.
The American Staffing Association's annual economic analysis of the staffing industry, "Poised for Growth," by Steven P. Berchem, May 2002, is available at
http://www.i4cp.com/BPyiiy.
For more information on the staffing industry, see
http://www.i4cp.com/d3Nzek
For data on blue-collar workers in the temp industry, see
http://www.i4cp.com/Yevy2u
For data on how temp workers are much more likely to be working in manufacturing and much less likely to be in wholesale and retail trade, see
http://www.i4cp.com/T0mvKd
For data on the occupations of independent contractors, see
http://www.i4cp.com/3x8Veo
For information on the proportion of workers in nontraditional arrangements, see
http://www.i4cp.com/qO5jmg
For more on the study about Workers' Compensation costs for contingent workers, see "The Safety Costs of Contingent Work: Evidence from Minnesota," by Young-Seung Park and Richard J. Butler, in The Journal of Labor Research, Fall 2001, pp. 831-849.
A white paper entitled "Temporary Staffing Agencies and Human Resources: Compliance Issues," by Steven R. Schaible, is available online for Society for Human Resource Management members at the SHRM Web site at
http://www.i4cp.com/OzmrRq.
For an article on the demand for temp managers, see "Contract Openings for Managers Increase; Temp Jobs Can Lead to Full-Time Posts," by Davis Bushell in the Boston Globe, April 18, 2002.
For a discussion of the global head-renting industry, see "An Interim Solution?" by Liz Simpson in globalhr, February 2002, pp. 41-42.
The temporary staffing industry tends to be one of the first sectors to get hit hard by a recession, as companies begin their downsizing process by shedding contingent workers. Richard Berner, chief U.S. economist at Morgan Stanley, said, "Temporary help workers have, across industries, borne a disproportionate share of the job losses; they serve as a 'shock absorber' that helps make labor markets more flexible. In recovery temporary workers will probably find jobs first."
The industry suffered one of its toughest years in 2001, posting a 14% decline in temporary staffing employment, according to the American Staffing Association. Economic forecasters at the Bureau of National Affairs were cautiously optimistic that 2002 would bring a modest recovery from the recession that began in the spring of 2001. Starting in February 2002, the number of temporary jobs did start increasing again, though so far the growth has been agonizingly slow for the industry, according to Staffing Industry Analysts Inc.
Many wonder where the first glimpse of economic recovery might be seen. In our knowledge economy, white-collar temps might provide those first encouraging signs. The American Staffing Association points to the growth of jobs requiring higher skills and education levels as being good for the temporary staffing industry. And the demand for interim executives globally has led to a whole new "head-renting" industry. Specialist firm Russam GMS estimates that the market for interim executives in the UK, for example, is growing by over 10% a year. These temporary managers are often first in line for permanent hires when the economy picks up.
So-called pink-collar temps, however, have historically been regarded as the mainstay of the temp staffing industry. The largest proportion of employees from temporary agencies (29.5%) works in administrative support/clerical occupations, according to 2001 figures from the U.S. Bureau of Labor Statistics (BLS). Still, the BLS estimates that during the 10 years between 1996 and 2006, administrative support temps – as a share of those working in the personnel supply industry – will decline by four percentage points. Meanwhile, the share of blue-collar operators, fabricators and laborers will grow by four percentage points.
Blue-collar temps are already well represented in the industry, with almost one fourth (23.2%) of temporary agency workers in operator/laborer occupations. The manufacturing sector employs over one in five workers from temporary agencies and contract firms, according to the BLS. And 19.6% of independent contractors are employed in the construction industry.
But with the predicted growth of blue-collar temps comes a concern about the high costs among temps for on-the-job injuries. Workers' compensation costs for leased employees are three times greater than for regular full-time workers and nearly 10 times greater than for regular part-time workers, according to The Journal of Labor Research. And workers in injury-prone occupations such as construction and manufacturing tend to generate much of that. These higher costs are the result of a combination of significantly higher claim severity and a much higher claim frequency rate. Although workers' compensation costs tend to be borne by the supplying agency, the client company could be sued under its general liability policy.
Why are temps more likely to apply for workers' comp? There are a variety of reasons: they're less familiar with their work environment, often less experienced as workers, less likely to be monitored for safe work behaviors, and less likely to have health insurance. Moreover, since they have less job security, contingent workers have a greater incentive to file a claim before benefit eligibility is lost. This results in more claims being filed and lengthier absences.
These and other issues related to contingent workers are bound to influence future management strategies. They'll become increasingly important as the global economy gains strength, bringing more temps into the workforce.
For full statistical information on "Employed Workers with Alternative and Traditional Work Arrangements by Occupation and Industry, February 2001," see Table 8 at the U.S. Department of Labor, Bureau of Labor Statistics Web site at
http://www.i4cp.com/hsd7WP.
The American Staffing Association's annual economic analysis of the staffing industry, "Poised for Growth," by Steven P. Berchem, May 2002, is available at
http://www.i4cp.com/BPyiiy.
For more information on the staffing industry, see
http://www.i4cp.com/d3Nzek
For data on blue-collar workers in the temp industry, see
http://www.i4cp.com/Yevy2u
For data on how temp workers are much more likely to be working in manufacturing and much less likely to be in wholesale and retail trade, see
http://www.i4cp.com/T0mvKd
For data on the occupations of independent contractors, see
http://www.i4cp.com/3x8Veo
For information on the proportion of workers in nontraditional arrangements, see
http://www.i4cp.com/qO5jmg
For more on the study about Workers' Compensation costs for contingent workers, see "The Safety Costs of Contingent Work: Evidence from Minnesota," by Young-Seung Park and Richard J. Butler, in The Journal of Labor Research, Fall 2001, pp. 831-849.
A white paper entitled "Temporary Staffing Agencies and Human Resources: Compliance Issues," by Steven R. Schaible, is available online for Society for Human Resource Management members at the SHRM Web site at
http://www.i4cp.com/OzmrRq.
For an article on the demand for temp managers, see "Contract Openings for Managers Increase; Temp Jobs Can Lead to Full-Time Posts," by Davis Bushell in the Boston Globe, April 18, 2002.
For a discussion of the global head-renting industry, see "An Interim Solution?" by Liz Simpson in globalhr, February 2002, pp. 41-42.