Employment Agencies: Are They the New Trend?

It seems that lately, more and more companies are using temporary associates and contract employees rather than hiring directly.

According to
http://www.statcan.ca/Daily/English/050126/d050126b.htm, "Temporary work accounted for almost one-fifth of overall growth in paid employment between 1997 and 2003 despite a period of economic growth and favourable employment conditions." (The Daily, 2005)

Why are employers going this route? Why not just hire employees directly and let them go if they don't work out? What makes an employer decide to go the temp or contract route?

As a recruiter for an employment agency, I can testify to many different reasons for this choice, although, the main reason would be liability. The employer has little or no liability when working with contract employees. The agency that hires the temp and places he or she on the assignment is responsible for recruitment, interviewing, skill assessments, payroll, workers compensation costs, and benefits. The client pays a fee for these services, but once the fee is paid, the burden of responsibility is taken away and put directly on the agency.

In addition, the client does not have any obligation to keep the contractor past a certain time, and, can in fact release them at any time regardless of reason. The burden of responsibility to follow the laws, once again, falls on the agency placing the employee. State and federal laws will always apply, but they do not apply to the client.

For example: A contracted employee is pregnant, and because of her pregnancy, she misses two to three days a month of work. Legally, an employer cannot release an employee due to pregnancy issues. Or, they can if the job is not done satisfactorily, but it's a complicated process. When the employee is a temp or contractor, the client has no obligation to keep her employed. They only have to call the agency and have the employee released from the assignment. The agency, on the other hand, does have to follow the laws and tread very carefully when making the decision whether or not to keep the employee and find her another assignment.

So, it's clear that there are benefits to hiring contractors, but there are also negatives, and employers do need to consider these negatives before making the choice of whether to go contract or not.

When a client hires a temporary employee, they do have to be aware that the employee is most likely looking for full time, permanent employment and will be looking elsewhere if his/her current opportunity has no promise of becoming permanent. It may also be a challenge to find employees who are willing to take limited benefits. Most agencies do now offer health insurance and some other benefits but not nearly the full benefits packages that employers will offer to full time, permanent associates.

Now, what are the benefits to be coming a temporary or contract employee as opposed to just hiring on permanently with a company? Surprisingly, there are many more than one would expect.

By working as a temp, the employee has the opportunity to get a foot in the door with a good company when the opportunity may not have presented itself otherwise. For example, someone who has a background in Human Resources but does not yet have a degree is having a hard time finding a job in her field of choice. She signs up with a temp agency and agrees to do short term assignments just to make some extra money while searching for permanent employment.

The employee is called to do a one-week assignment covering for a receptionist who is out sick. The assignment happens to be at a large company looking for an HR manager. This employee, upon the completion of the week assignment, has made some strong contacts within the company and now has the opportunity to not only apply for, but also get an interview for the HR position. Had she not been open to working as temp, most likely her resume may not have been considered because of the educational background that she was missing.

Another neat benefit for the employee is the opportunity to try out different companies and different jobs to see what works best. Or, if a person has a limited schedule due to health issues, school, or child-care, temping is a way to work when available and not work when not available.

Signing on with an employment agency can be a grueling process. The initial interview normally takes two plus hours, as there is application and paperwork, testing, and an interview with a recruiter. The testing generally consists of skill assessments in MS Office programs, forklift and production knowledge, and personality tests, depending on one's skill set and the type of job applying for. Once the initial interview is over, though, the employee will not have to come back in to the agency for any reason other than picking up information on the job assignment once placed. Her or she will, however, most likely be sent on interviews with clients prior to being hired.

Prior to entering the staffing industry, I really didn't know a thing about it. I stumbled upon it by accident but have since realized what a fantastic resource employment agencies can be for both employers and prospective employees.

http://www.statcan.ca/Daily/English/050126/d050126b.htm