Playing the Staffing Accordion
Patrick McKenna doesn’t hold down a full-time job, and his financial future has never looked brighter. McKenna, an engineering mechanical designer, has carved a full-time career out of working temporarily for businesses.
McKenna of Durham, who has been a contract temporary worker for the last five years, has never been unemployed and says he always has more work than he can do. He works both through staffing agencies and his own company, 3D Specialist, to find jobs.
Five years ago, he decided his employer at the time didn’t seem to have any loyalty towards its employees and he didn’t want to be tied to just one employer. So he took the plunge as an independent contractor. “The money is good, my wife has the benefits covered and ever since I have been inundated with phone calls,” McKenna says. “I have never been out of work for more than one week. I’m getting phone calls just about every day.
On top of all that, he says the money is much better than full-time gigs as he commands around $40 an hour for most jobs. He generally works at a company for about nine months and makes about a third more than he would as a full-time employee.
For many companies, temporary workers like McKenna are becoming a critical component of their staffing plans. That includes Kollsman Inc. in Merrimack, an avionics, military and medical technology manufacturer with 580 employees. For the past four years, Kollsman has filled approximately 10 percent of its positions with temporary workers, says Jack McStravock, vice president of human resources.
McStravock uses temporary workers as a way to stabilize his workforce and deal with short bursts of activity without layoffs once those bursts subside. Kollsman uses most of its 50 to 58 temporary employees in its subsidiary, KMC Systems Inc., which produces medical devices.
McStravock says temporary workers are as skilled as his employees and he sees no disadvantages.
Thermo Fisher Scientific in Newington uses temporary workers for lower-level manufacturing positions, generally hiring people on a temporary-to-permanent basis. That allows the company to fluctuate its head count when necessary without eliminating any positions. During the past year, temporary workers made up about 5 percent of its workforce, says Karen Brieger, the senior human resources generalist.
Companies like Kollsman and Thermo Fisher Scientific are keeping staffing firms hopping, with NH firms placing thousands of temporary workers annually, according to those in the field.
“Instead of committing to that person, an employer says let’s date for a while, let’s see if you like it here and if I like you and not make that full 100 percent investment,” says Tracey Madden, president of McIntosh Staffing Resources, LLC in Dover.
Madden, whose firm places office and professional workers, says temporary workers are valued in both strong and uncertain economic times. In cyclical markets, temporary workers allow employers to fill or eliminate positions without layoffs, she says. With the economy gaining strength, it’s an employee’s market and people are jumping between jobs. That, says Madden, means “somewhere along the way we will need some bodies to Band-Aid the situation.”
During the past four years, McIntosh Staffing Resources experienced brisk business in temporary placements, which accounted for 75 percent of its business. That’s starting to shift slightly as there was a higher demand for permanent placement workers in 2006, and temporary placements have dipped to 70 percent of the firm’s business.
Following the Market
Starting with the dot-com bust in 2001 and 2002, David Gutierrez, president of TY MARK Associates, LLC in Bedford, saw an uptick in the demand for temporary placements. At its peak right after the dot-com bust, temporary placements accounted for 50 percent of TYMARK’s business. It has since dropped to a steady pace of 20 percent.
TYMARK places clients throughout New England in numerous fields, including manufacturing, distribution, engineering, and finance, Gutierrez says.
Unemployment trends in NH reflect the cycles experienced by Madden and Gutierrez. The economic boom of the late 1990s plummeted into a recession in 2001. The state unemployment rate rose from under 3 percent in January 2000 to more than 4.5 percent by the middle of 2002, according to NH Department of Employment Security data.
That rate has been steadily dropping since then, and unemployment has remained at 3.5 percent between November 2005 and November 2006, the last month for which data was available.
“It was like a jobless recovery in that the economy stabilized, but the job count didn’t go up and then it was very, very, slow in coming back,” says Anita Josten, an analyst with employment security, of the slow decline in the unemployment rate. She says businesses are now cautious about investing in people until they are more certain about the economic outlook.
Gutierrez describes the lure of temporary workers in terms of two economic powerhouses, Wal-Mart and McDonald’s. The Wal-Mart mentality is “I want it, I want it in abundance and I want it cheaply,” says Gutierrez. The McDonald’s mentality is you pull up to the window and “minutes later you pull away with every meal you want, exactly how you want it.”
Gutierrez says temporary employees can fill both needs. In the first case, temporary employees do not require employers to pay ancillary costs, such as health care, vacation time and other benefits. He also points out they don’t carry the same liability issues as full-time employees. In the second case, temporary employees arrive trained and ready to be productive.
“In this day and age, the reality for every business owner is you need flexibility and you need to make as much income as you can with as much profit margin and minimum liability,” he says.
The needs of Wentworth Douglass Hospital in Dover fall more along the McDonald’s line of thinking. The hospital uses temporary workers for short- and longer-term clerical jobs when regular employees are not available. The hospital currently hires temporary employees to fill only two of its 1,600 positions on a regular basis.
In late January, Wentworth Douglass needed a fast typist for a seven- to 10-day job and additional staffing for two to three months in a physician’s office switching from paper to electronic records.
Human Resources Manager Kim Jacques called Madden and the two employees arrived ready to work two days later. Jacques says temporary workers usually fill in for a leave of absence, a seasonal project or a gap between job vacancies. And since Madden is also a consumer at the hospital, “she’s familiar with the community and is able to refer the right candidate for the job,” Jacques says.
There is no law in NH limiting the length of time employees can be hired on a temporary basis. Placements range from as little as a few days to years. McKenna says his average stint at one company is about nine months, during which he often does other jobs on the side on nights and weekends. Kollsman uses temporary workers for periods averaging 90 to 120 days.
Whatever the length of service, companies that focus on temporary staffing firms say business continues to be strong. Michael Leccese, vice president of Technical Needs in Salem, says temporary staffing services command competitive fees for two basic reasons: They actually save companies money and time.
Since placement companies do the screening, records checking, and interviewing, companies get skilled candidates without having to spend the time to find them, says Leccese. “It’s the speed of getting somebody in and it’s the cost,” he says. “It’s a lot more effective if they need someone for a short time.”
Copyright Laurentian Business Publishing Inc. Mar 01, 2007
Provided by ProQuest Information and Learning Company. All rights Reserved