Face it. The temporary labor concept gets a bad rap, based on last-century paradigms of that labor source being dominated by drunks, reformed and otherwise. The image had some regrettable basis in fact. One company we worked with drove each morning to a designated gathering spot and picked up however many workers were needed, with the critical qualifications being: 1) reasonably sober, and 2) strong enough to climb aboard.
Today, employers have tougher requirements for even temporary workers being clean and sober, free of felony convictions, and able to read and write to the level required by the job. But where is the temporary staffing business going? What might the future hold?
Mixed outlook
Overall, the need for temporary workers at relatively low skill levels is in decline. We don't need batteries of file clerks, typists, and keypunch operators. (For those who don't know what a keypunch operator is, try Google.) A goodly amount of manufacturing has been outsourced and/or off-shored.
But in the world of logistics and supply chain execution, we can't easily off-shore. We can outsource, though, and the business is subject to upturns, downturns, and just plain day-to-day variability. These all lead to thinking about non-employee staffing, at least to augment the core work force.
Then, there's the role of government policies and attitudes. If the costs and risks of providing traditional employment for full-time workers start to seem overwhelming, companies and managers will delay hiring, avoid hiring, and look for alternatives to traditional staffing.
Finding good help
When it comes to acquiring temporary labor, companies use a variety of approaches. For instance, one major household-name retailer recently brought the temporary staffing function in house after years of relying extensively on staffing agencies. The retailer, which hires about 2,000 temporary workers for its distribution center each year, believes that its quality control has been significantly enhanced by the move. It still uses some labor from outside staffing agencies, but only on occasion.
The dollar savings are enormous. The temps are, after all, only there temporarily, and they receive no traditional employee benefits. But about 10 percent of the temps are later hired as full-time employees.
Another retailer with multiple locations uses temporary staffing of several types for special projects and to supplement its work force during peak volume periods. This particular retailer relies on agencies to provide temporary workers, but its business comes with some conditions. While agencies propose services on a competitive bid basis, the company requires that all workers, including temps, receive take-home pay at least equal to the beginning wage scale for permanent workers. The company also fills supervisory positions through its staffing agency.
Getting into—and out of—the business
Companies on the logistics service provider (LSP) side of the business take a similarly varied approach to temporary staffing. One multi-city logistics service provider found that it was using significant amounts of temporary labor and concluded it could do better by managing this part of the operation itself. Consequently, it established a temporary staffing division, with the objective of elevating worker quality for itself and for its customers. It generally keeps about a third of the workers (and managers, administrators, and customer service positions) in its own operations. With close attention, it rotates assignments to balance overall employment levels and provides steady employment for its "temporary" staff.
Another multi-city operator got into the business as a byproduct of an acquisition. Before long, however, it decided it wanted out. The company shut down the service, citing downside risks in litigation, illegal immigration, workers compensation costs, substance abuse, and diversion from its core business.
Still another multi-city operator is just getting into the temporary staffing business, where it hopes to capitalize on its superior ability to select, train, and motivate workers. It plans an aggressive "temp to hire" offering as a key part of its business model.
Another provider operates in a single city and thinks the future is very bright for continued growth. Its specialty is providing and managing Hispanic workers and serving a growing Hispanic population. Although it got into the temporary staffing business almost by accident, it now provides forklift drivers, order pickers and packers, and truck drivers.
Yet another provider sees great growth potential in temporary staffing. Ironically, many of the best workers were virtually "permanent" temps, having worked in a technically temporary role for years and years. Many of these have been upgraded to full-time status.
This company promotes "temp to hire" arrangements, and uses brand awareness and superior skills testing and development to distinguish itself in the marketplace.
At the end of the day ...
Clearly, there's no single model for temporary staffing services—no one-size-fits-all solution. There is wide variation in what customers want to do with temporary staffing and how they want to do it.
Equally clearly, temporary staffing is not for everyone, whether as a customer or as a service provider. There are genuine risks and few barriers to entry.
Speaking bluntly, it's relatively easy to find willing temporary workers when an economy is slow. It might prove difficult to accomplish in a full-employment economy.
Then, there's the open question of what direction government policies might go, and how far, how fast. The temporary staffing business could benefit enormously, or suffer mightily.
However those factors play out, there is little question that logistics and supply chain execution will continue to be variable, cyclical, seasonal, and unpredictable, all of which tend to keep the door open for the use of temporary workers and temporary staffing agencies.
Wreaths Across America
