The contingent workforce: Fact vs. fiction

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Posted by Joel Capperella

April 18, 2011

A week or two ago I came across a CareerDiva blog post called 'Temporary Workers=Corporate Crack,’ in which the author, Eve Tahmincioglu, equates a company's use of a contingent workforce to an addiction to crack.

After reading the post, I immediately posted a comment explaining some of the areas in which I disagreed with Ms. Tahmincioglu’s arguments. But even now, a few days later, I am still unsettled by the perception of the world of the contingent workforce that is presented in the article. I hope to clear up any misconceptions now.

In her post, Ms. Tahmincioglu seems to take the position that staffing providers and their clients (the companies utilizing temporary labor) conspire to minimize the wage and benefits offered to contingent workers in order to maximize profits on both sides of the relationship.

Let me first say that if you are a temporary employee and feel you are being treated this way, or if you use temporary staff and this is how your staffing supplier is treating its employees, you are with the wrong staffing company. Evaluate other vendors and make a change.

Reputable staffing suppliers will not try to take advantage of their employees. While there are some firms that don't offer certain elements of a compensation package, including personal time off, health and other benefits, they are not in the majority. The largest and most competitive firms in the country are not among them. Responsible staffing providers frequently give temporary workers access to affordable health plans, portable 401k participation and other benefits.

To be fair, it is absolutely true that when selecting a staffing provider, the cost of leveraging their services is a significant part of the discussion. And further, the negotiation of whether or not temporary staff will receive things like personal time off and health benefits impacts the overall cost. But it is rarely a black and white issue.

Quite a bit depends upon the nature of the role in question, the duration of the assignment, the amount of business one staffing provider does with a client, and the willingness of qualified employees to accept positions that do not include such benefits.

Additionally, the temporary labor market is a very competitive space for qualified talent. The best can be very discriminate about the work they choose to take on. And more often than not, this work leads to two things: 1) Greater opportunity with the staffing provider's clients; and 2) Ongoing development of one's resume.

Again, to be fair, this is not true for every staffing provider in the marketplace. In a market in which nearly 95 percent of the providers are small, local businesses, there is bound to be more than a few exceptions. But it is the responsibility of both the client and the individual worker to properly evaluate such criteria when selecting a staffing provider.

I also want to clarify the difference between co-employment and worker misclassification.Co-employment essentially arises when two businesses manage or control at least some aspect of a worker's employment relationship. Misclassification, on the other hand, occurs when an organization classifies a worker as an independent contractor, when in reality (s)he should be classified as an employee of the company.

The difference is somewhat nuanced but important. When selecting a staffing provider, organizations need to be mindful of co-employment risks and separate those concerns from the way they use directly contracted employees. There are federal and state laws in place that exist to protect tax revenue and employees themselves that both staffing providers and their clients alike must adhere to.

The temporary workforce is an important part of the U.S. economy, and one that benefits all three parties involved -- employees, the staffing providers that employ them, and the end client of the staffing firm. It is the responsibility of all three parties to ensure they do business with integrity and comply with the laws that govern this portion of the American workforce.

When selecting a staffing provider it is crucial that employers insist on understanding how the provider addresses such issues. And when an employee is selecting a staffing provider, (s)he must understand the totality of the benefits available to them.

Ultimately, the process must be one of partnership and not simply a transaction.

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Topics: Staff Management

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