Hiring and Retaining Temporary Employees

Changing business needs have led to increased use of contingent workers. In 2005, America’s staffing companies employed an average of 2.9 million temporary and contract workers per day, according to the American Staffing Association’s (ASA’s) quarterly employment and sales survey. This is an increase of 8.7% over 2004. Staffing firms earned $69.5 billion from placing temporary and contract employees in jobs with their clients. Over the next decade, the U.S. temporary staffing industry will grow faster and add more new jobs than any other industry, according to the U.S. Bureau of Labor Statistics, a branch of the federal government.

These are more than just typists and file clerks. Companies use staffing firms to provide temporary employees in highly skilled positions often requiring advanced degrees. For example, according to the Bureau of Labor Statistics, in 2001, 6.4% of temps worked in technical jobs, 21.0% in professional and managerial positions, and 9.3% in information technology. Trade show booths of temporary staffing firms specializing in placing scientists and lab technicians have become a common feature at the National Chemical Exposition held in conjunction with American Chemical Society national meetings.

Companies are increasingly using temporary employees in strategic ways that give them the flexibility to meet changing business needs. This is true for R&D as well as other functions. Labs can add staff to push R&D projects to commercialization more quickly and then reduce their payrolls without the disadvantages of a formal staff reduction. Strategic use of temporary employees is a result of corporate downsizing and restructuring notes Kathleen Christensen of the City University of New York and author of “Contingent Work: American Employment Relations in Transition” (Cornell University Press, Ithaca, NY). Labs often hire consultants as temporary trainers to conduct workshops and teach their employees important skills.

It is important for lab managers to remember that temporary employees don't work for the companies actually using their services. Rather, they work for the staffing firm that a company contacted when a lab manager temporarily needed a scientist, engineer, or lab technician. Typically, companies sign exclusive contracts with a staffing firm to supply their temporary personnel needs. Only if the staffing firm cannot supply someone with the needed qualifications can the company approach another staffing firm. Lab managers need to develop productive working relationships with their employer’s contracted staffing firm and clearly specify the qualifications needed to fill a temporary position.

The different relationship between contingent employees and companies using their services (compared to the relationship between employers and their own employees) requires that managers modify their supervision techniques. This is true for the bench scientists supervising technicians as well as the group leader or department manager.

Another factor for lab managers to consider is that temporary employees have different motivations than conventional employees. Outstanding temporary employees can look forward to higher salaries in their current or future assignments. However, they can’t expect promotions. One motivating factor may be the hope of being hired as a permanent employee.

Hiring temporary employees

Increased use of contingent workers often requires lab managers to integrate their core employees and temporary employees. Sue Marks, CEO of staffing firm Pinstripe (Milwaukee, WI), observes that more companies are using temps on project teams with their own long-term employees. As a result, she says, the selection and treatment of these workers is just as important as that for the core workforce.

Lab managers can use two strategies when hiring a contingent worker. The first is a minimum time investment approach in which the manager reviews résumés submitted by the staffing firm and chooses one individual. However, it is almost always a worthwhile time investment to interview one or more individuals for the temporary assignment, discussing their skills in some depth, assessing whether they will be compatible with the laboratory culture, and then picking the most suitable individual and contracting for their services. While you can immediately terminate the work relationship whenever you become dissatisfied with the individual’s performance, valuable time has still been lost. It is well worth an hour or two of your time to personally interview candidates to reduce the chances of bringing in an unsatisfactory contingent worker.

Retaining temporary employees

One issue when using temporary workers to complete projects on time is keeping these individuals at work until project completion. Stanley Nollen, Professor of Business at Georgetown University (Washington, DC), and Helen Axel, Senior Research Fellow at The Conference Board, a New York City research organization, characterize professional and technical temps as having “little or no attachment to the company at which they work…They have neither an explicit nor implicit contract for continuing employment.” With few ties to the company, many temporary workers job hunt on a continuous basis and are more likely to resign unexpectedly than are company employees. What employers like most about contingent staffing, the ability to easily dissolve the company/temporary worker relationship is also a major cause of dissatisfaction with using contingent workers.

Contingent worker mobility calls for special retention techniques such as payment of a bonus if the temp is still at work upon successful completion of the project. However, managers shouldn’t make promises they can't keep. In the case of high performance contingent workers, lab managers can promise to look for other temporary assignments within the company or to recommend the individual for employment with the company. However, they can seldom guarantee a new temporary assignment

Managers should also do what they can to make sure the workplace is a pleasant environment for contingent workers. In many workplaces, temps report company employees often treat them with a lack of consideration and respect. Managers can improve retention of contingent workers by counseling company employees to treat temps as they would each other.

One way of keeping contingent workers in harmony with your company’s culture is to hire company retirees as temps. They understand the company culture and still have ties of loyalty to the firm. Many company employees still know them. Company retirees are also a known quantity. Managers can consult their personnel files to determine their strengths and weaknesses. For example, Dr. Lynn Slaugh, who retired from Shell Chemical as a Distinguished Scientist, the top of Shell’s technical ladder, is one of many retired researchers who have worked as contract employees in one of the firm’s laboratories.

Nollen notes that this type of hiring is particularly common after corporate downsizing. During downsizing some companies reduce their staffing levels too much, he observes. As a result, companies may hire back some of their former employees as contingent workers. Helen Axel sees fewer quality problems with such temps “because they have a track record when you hire them.”

Continuing education

Providing continuing education opportunities could be an effective retention tool for some temps, particularly younger ones. An increasing number of firms that supply contract laboratory workers, such as Kelly Technical Services and Manpower, Inc., are providing continuing education courses for their employees. It’s a win-win situation. By increasing their qualifications, staffing firms can charge companies higher fees for their services. The higher fees result in higher salaries for contingent workers increasing the likelihood they will work longer for companies using their services.

Changing project staffing levels

R&D staffing levels are set in response to the need for employees on various projects. In the initial stages of an R&D project, company employees work on new product and manufacturing process concepts. These are usually full-time company employees although some may be highly trained consultants often with quite specialized skills. As projects move into process optimization and scale-up phases, additional scientists, engineers, and technicians often are needed to operate a pilot plant and perform analyses. The people brought in to do this are often contingent workers. Then as the product or process is commercialized, analyses are standardized and production is moved to a fullscale plant, these contingent employees are let go while company employees move on to other R&D assignments.

This enables employers to avoid the morale and other problems associated with staff reductions, says Denise Rousseau, Professor of Organizational Behavior at Carnegie Mellon University in Pittsburgh and author of “Psychological Contracts in Organizations: Understanding Written and Unwritten Contracts” (Sage Publications, Thousand Oaks, CA). Conducting a staff reduction, even when done with compassion and sensitivity, is emotionally devastating for everyone involved — including many managers. Dr. Bill Carroll, Vice President of Research at Occidental Chemical and former American Chemical Society president, has spoken movingly of the emotional anguish he experienced in having to conduct a staff reduction at his firm. Survivor syndrome, the negative emotions felt by employees who have survived a staff reduction, can reduce workplace productivity and job satisfaction. By hiring contingent workers whose tenure is understood by all to be limited, employers avoid many of the negative emotional consequences of staff reductions.

Downsides of using contingent workers

Besides having little loyalty to the company, another downside is that using large numbers of temps instead of hiring their own employees can undermine staff morale. Economist Ann Davis at the Bureau of Economic Research at Marist College (Poughkeepsie, NY) believes the presence of contingent workers serves as a constant reminder to regular employees that they can be replaced. Carol Harvey, Associate Professor of Management and Marketing at Assumption College (Worcester, MA), believes company employees won’t remain compliant and motivated if they believe contingent workers could take their jobs. Their fears can surface in the form of lower productivity and increased employee turnover. They can also reduce employee focus on their jobs and result in a larger number of laboratory accidents.

Using temping as a staffing screening tool

Many contingent workers hope to leverage their temporary assignments into full-time positions — and many do. A 2006 ASA survey of 13,000 current or former temporary and contract employees indicated that 53% of those who remained in the work force moved on to permanent jobs.

Anecdotal information included in the ASA survey indicated that “temp-to-perm” working arrangements are growing rapidly in popularity. This trend is changing the way some laboratories recruit new employees. For example, the manager of the Surfactant Applications Group at Shell’s Westhollow Technology Center (Houston, TX), Dr. Edwin Rosenquist, repeatedly hired laboratory technicians in this manner. Only the best contract employees received job offers from Shell after he and the supervising chemist evaluated their work as temps for six to twelve months. The company has recently used the same approach in hiring young analytical chemists. Familiarity with the contingent employee’s work can help companies afford incorrect employment decisions when hiring permanent employees. Common employment factors such as inflating qualifications on one’s résumé become less of a concern when managers and coworkers have seen first-hand how well the contingent worker fulfills his/her job responsibilities.

Supervising temps

Different supervision techniques for temporary employees are needed for two reasons. The first is the limited and sometimes uncertain duration of their employment. The second is that temporary employees actually work for the staffing company that provides their services, not for the laboratory itself.

When supervising or working with contingent employees, lab managers need to be aware that these individuals are unfamiliar with the employer’s policies and procedures. In particular, lab managers should verify that contingent laboratory workers have the proper safety equipment such as safety glasses, take company safety courses, and follow company safety procedures.

Lab managers should remember that the staffing firm, not their own employer, actually pays the contingent worker's salary (paying them out of the fee paid to the staffing firm). You should limit salary discussions by suggesting the temp ask the staffing firm these questions. Of course, if you’re happy with the contingent worker’s performance, call the staffing company and let them know. A delayed raise could result in an excellent contingent worker accepting a more lucrative temporary or permanent assignment with another firm.

The contingent worker’s limited loyalty to the company means he/she is more likely to need closer supervision that a company employee. Like a new employee, the temp’s capabilities and diligence often are unknown. However, managers shouldn’t constantly stand at a temporary technician’s shoulder being sure he/she is working and shouldn’t ask others to frequently report on the temp’s behavior. Contingent laboratory employees should be given clear deadlines with their assignments. Initially, it is a good idea to hold informal daily discussions with the temp to discuss daily progress and discuss future work. As contingent technicians, scientists, and engineers become more familiar with their assignments, this close supervision often becomes less necessary and informal weekly reviews of progress frequently suffice.

Another important consideration is that lab managers need to be sure that temporary employees are aware of confidentiality requirements both for the proprietary information they learn on the job and the intellectual property that they create. This intellectual property belongs to the company not to the contingent employee or the staffing firm.

Finally, the presence of temps in the laboratory often means managers must adapt their management techniques for company employees. They must be prepared to deal with the resentment many company employees feel towards contingent workers particularly after a lab downsizing. Even in the absence of staff reductions, bringing in relatively large numbers of temps can undermine company employee morale. As noted above, the presence of contingent workers serves as a constant reminder to regular employees that they can be replaced.

The staffing company perspective

Staffing firms succeed by maintaining a roster of highly qualified people they can provide to companies needing temporary staff members. The staffing firm’s goal is to reduce turnover and thus reduce recruitment costs. Global staffing firm Adecco (global headquarters Glattbrugg, Switzerland), which employ 700,000 people in temporary positions in client companies, recently created a new position, “chief career officer,” to help accomplish this. Bernadette Kenny has the responsibility of meeting the career needs of contingent workers so they stay with Adecco enabling the firm to provide quality temps to corporate clients. To do this, she supervises Adecco employee learning, training, and talent development.

Conclusion

By screening potential contingent workers, hiring them for suitable assignments and supervising them appropriately and effectively, managers and supervising scientists/engineers can assure that the contingent employment experience is rewarding for the temp, the manager, the client company, and the staffing firm.