Permanent vs' Flexible Staffing: Making Use of Contingent Workers

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Permanent vs. Flexible Staffing Making Use of
Contingent Workers

• Presented by
• Josh Bohnen, Rob Mason, Hillary Quinn

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Title Page

• http//www.hypnotic.com/reebok.aspx

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Overview

• What is a contingent worker?
• Persons who do not expect their jobs to last or
  report them as being temporary
• Those whose do not have an implicit or explicit
  contract for ongoing employment
• Referred to as just-in-time staffing and
  disposable workers

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What is a Temporary Workforce?

• A temporary workforce consists of workers who are
  brought in to deal with.
• Unexpected increases in workload
• Cover employee absences
• Handle special assignment
• Help with seasonal work
• Short-term duration projects
• Can work for periods lasting from a few days or
  hours to a few years

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Temporary vs. Permanent Employment

• Permanent
• Full-time, long-term jobs
• Enjoy benefits such as
• Pensions
• Health insurance
• Vacations
• Temporary
• Jobs not expected to last
• Explicit or implicit contract for ongoing
  employment
• Benefits not usually included

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Who are these workers?

• Traditional Temporary Workers
• Unwilling or unable to commit permanently
• Disproportionately young
• Perceived benefits
• 20 of staffing firms
• Transitional Workers a Bridge to Permanent
  Employment
• First-job hunters, reentering labour force,
  welfare transition, quitting and looking for a
  better job
• Used as showcase of skills and observation by
  employers
• 55 use temporary work as a bridge to permanent
  employement

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Sources of Temporary Workers

• Independent Contractors or Free Agents
• On-call Workers
• Temporary Help Agency Workers
• Workers provided by Contract Firms

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Statistics

• 90 of US employers use contingent or temporary
  employment
• There are currently 5.2 million contingent
  workers employed in the U.S., and the Advisory
  Council predicts that number will quadruple over
  the next 10 years
• 52 of temporary workers would prefer permanent
  employment

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Advantages

• Staffing Flexibility
• Peak Hours and increased capacity can be handled
• Lower Benefit Costs
• Rapid Availability
• Able to terminate without severance costs
• Access to skills otherwise unavailable
• Future Employment Screen
• Instant Staff
• Training Costs are minimized

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Disadvantages

• Lack of Commitment
• Lack of developed skills
• Employees come in with only raw ability
• High Turnover
• Lowers Employee morale
• Difficult to integrate
• Company Security

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Real Life Example
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Cost/Benefits in Monetary Terms

• Benefits administration
• Overtime
• Competitive Wages/Salaries
• KSAOs assumed to be present
• Controlling Training Development Costs
• Non-wage and benefit costs must be low
• Career Development costs and Union Activity
• Can input costs be recovered?
• Unit of output cost / Productivity
• Term of employment

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Costs/Benefits

• Controlling T D Costs
• Non-Wage and benefits must be low
• Career Development and Union Activity
• Can input costs be recovered
• Productivity/ Unit of Output Cost
• Term of Employment

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Managerial Implications

• Can help make better hiring decisions
• Assess job/person and job/org fit
• Provides greater managerial flexibility
• Project management capabilities/Adjust to
  economic uncertainties
• Leave fulfillment
• Depends on nature of employment
• In general contingent workers are less satisfied,
  but this has no correlation to productivity
• Union atmosphere may complicate work
  relationships
• Managing employee expectations

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Organizational Effects

• Organizational goals may not be embedded in
  employee behaviours
• Employees may not be integrated into
  organizational culture
• Interpersonal relationships between permanent and
  contingent workers
• Social contract between employer and employee is
  uncertain
• Studies suggest that flexible staffing is not
  often incorporated in organizational strategy
• Diminished level of commitment is not apparent
  according to a study

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Relevancy to Business Trends

• Ideal for the growing small enterprise
• Consistent with technological change
• Ability to adapt quickly
• Specific skills available as needed
• Growing prevalence of team based performance
• Opportunity to recruit and retain the best
• Expertise in non-core areas

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Relevancy to R S

• Save substantial costs in screening and testing
  of applicants
• Streamline selection process
• Focus is on organizations needs
• Problems regarding performance appraisal and
  predictors of performance
• Does not allow self selecting out
• Loss of intellectual capital / tacit knowledge

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Discussion Prompts
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Discussion Prompts