In late 2009, the organization now known as the Alliance for the American Temporary Workforce (AATW) began their web presence as FITE (Fairness & Information for Temporary Employees). Their mission, originally to, “establish fair rates of pay (emphasis mine), increase access to health insurance, and improve permanent-hire rates for the millions of Americans working through staffing agencies,” now reads, “to provide accurate information to help Americans make better decisions about temporary employment.”
Because of the ASA (American Staffing Association) and the staffing owners behind it, AATW insists that “the values of temporary employment have been greatly overstated, and the negative impact on workers, the economy, and the United States as a whole have been largely ignored.” Additionally, they make several claims about temporary employees, stating that temps:
- Receive 25-50% less pay on average for the same work
- Cost Employers about the same as permanent workers
- Are twice as likely to receive taxpayer funded assistance
- Are 50% more likely to be seriously injured or killed on the job
- Rarely have health insurance provided by their employer
- Are equally as likely to work full-time as non-temp workers
- Can work for an indefinite period of time as "temporary"
- Rarely have sick days, holidays, or vacation days
- Can be fired at any time for any reason
For the sake of argument we’ll go ahead and accept the majority of these statements as prima facie (although if anyone wants to refute any of them in the comments, feel free!). However, as someone who has spent the past fifteen years in a staffing industry role working to help bring people and employers together, I do have some issues with the way these statements and others made on the AATW website, in the absence of perspective, portray our industry. Let’s analyze a few.
1. “[Temporary employees] Receive 25-50% less pay on average for the same work”
One could just as easily say that new employees within their first 90 days of employment receive 25-50% less pay than their more experienced co-workers. Given that temporary employees are generally the newest employees at any given company, of course they would receive less pay! This would not only be expected, but, if the opposite were true the sky would fall, the moon would turn to blood, every Tractor Supply in the country would immediately sell out of pitchforks, and unions would miraculously form in places where they’ve never before been able to gain traction.
Quoting the old FITE mission above, I emphasized their goal to ‘establish fair rates of pay.’ I realize they have since removed that phrase, but it remains an overall theme of these types of organizations and movements, particularly in the anti-staffing realm. If the market dictates it and people freely agree to work for it, it can be argued that any wage is ‘fair.’ Sure, certain market pressures tend to drive down the cost of labor over time. For example, uncontrolled, massive unskilled immigration works to significantly drive down the cost of unskilled labor in this country. However, given several facts, including that 1) staffing agencies are in direct competition with each other (which keeps markups down), 2) this magical, amazing thing called the ‘market’ actually exists, and 3) slavery is illegal, staffing agencies’ effect on overall wages is likely minimal at most. For my part, I know I am constantly encouraging my clients to raise wages to meet market demands. If someone can go down the street and do the same job for $2 more per hour, how can I possibly recruit for them?
"The AATW seems to think we just sprouted up like weeds between people and businesses with a sign saying ‘pay us.’"
2. “[Temporary employees] are 50% more likely to be seriously injured or killed on the job”
Whether or not the 50% figure is entirely accurate, it does stand to reason that temporary employees would be more likely to be injured and (God forbid) even killed on the job. One could just as easily substitute the word ‘new’ for ‘temporary’ and the results would be similar. After all, the most dangerous period from a workers compensation standpoint is an employee’s first 90 days. They aren’t familiar with their surroundings, their muscles aren’t yet accustomed to the job’s physical demands, and they are trying to learn something entirely new. Although some assignments do last longer, the majority of our workers are well within that first 90 days.
Of course, none of that means temporary agencies shouldn’t do more to encourage and ensure the safety of their workers. In fact, more than one seminar at last year’s ASA Staffing World Conference focused on just that. That’s right, when staffing owners and managers get together they talk about things like completing hazard survey guides, being their client’s safety partner, ensuring their clients have job task analyses completed for every position, and even, yes, dropping clients with poor safety records. We have MODs too, and although a significant part of the service we render involves incurring some of the risk, we can’t afford to put our employees in harm’s way any more than our clients can.
3. “[Temporary employees] can be fired at any time for any reason”
Really? Unless you’re a public service employee, a member of a union, or a government bureaucrat, you probably fall within the category of people who can be ‘fired at any time for any reason.’ There are, of course, illegal reasons to fire people, but those laws apply to staffing agencies as well.
4. “In general, a staffing agency bills its clients about 50% more than it pays its workers.“
First of all, yes, we unapologetically exist to make a profit. However, the 50% figure is grossly and irresponsibly overstated. Unless the job is extremely high risk from a workers comp standpoint, we don’t charge anywhere near that percentage. Their FAQ bemoans the fact that there are, “approximately 17,000 independent companies working out of 35,000 locations in the US. By comparison, there are only 14,000 McDonald's locations in the US.” Given the reality of the ruthless dog-eat-dog nature of staffing industry competition both for clients and for employees, one wonders how agencies would get any business if they charged that kind of markup. In reality, markups are constantly being driven down by the market.
5. “Temporary staffing agencies skim a portion of worker's wages for every hour that they work for them indefinitely. The fee is hidden from workers and is entirely unregulated. The practice is known as ‘fee splitting.’”
Here AATW sets up a straw man and then proceeds to promptly and easily knock it down. First of all, ‘fee splitting,’ according to their cited source, “referred to a form of collusion in which an employer (or foreman) agreed to hire workers from a certain agent in return for a share of the fees collected from these workers. Such collusive arrangements resulted in increased fee rates, since employment agents were caused to charge enough to cover both their own costs and the gratuity paid the employer.” While their source does deal with the evolution of fee charging practices (including trying to redefine ‘fee-splitting’ as the collaboration of government and staffing agencies to put unemployed people to work), ‘fee splitting’ is truly a thing of the past and has absolutely nothing to do with how most staffing agencies price their product.
6. “Temp workers are employed by a third party for-profit labor middle-man. The middle-man does not produce a product or service (emphasis mine). It does not control the work of the employee. The middle-man, or staffing agency, bargains for the highest rate an employer is willing to pay for labor and the lowest rate an employee is willing to accept. The difference is their profit. This is what the term ‘temp’ really means.”
It’s amazing to me how 17,000 independent companies could operate over 35,000 locations without producing a product or a service! This is an untrue and, quite frankly, ridiculous statement to make. If staffing agencies didn’t provide a service for the profit they make, the market wouldn’t let them stay in business. In fact, staffing agencies that charge too much, fail to control their costs, or gain a bad reputation in their market go out of business every day.
I’ve covered a lot of the value staffing agencies add to the market in my other work on Staffing Talk. As odd as it sounds, this organization seems to think we just sprouted up like weeds between people and businesses with a sign saying ‘pay us.’ In truth, we provide a valuable service to two different clientele – employees and employers alike. It’s just valuable enough that employers actually pay us real money for the services we render, and it’s also valuable enough to prompt new job applicants to sign up with us every single day.