Hiring Temporary Workers Can Cause Long-Term Problems

Temps can present insurance and risk management issues if precautions aren't taken.

For once, U.S. automakers can be glad they're not Toyota -- at least in Kentucky. That's because the company's Georgetown, Ky., motor plant has come under fire by a social justice group that wants to unionize the plant's workers. The group, called Kentucky Jobs With Justice, has targeted Toyota Motor Manufacturing's treatment of temporary employees, including the wages it pays them.

The situation highlights the need to be aware of potential challenges associated with the hiring of temporary or seasonal workers. Temporary workers have traditionally been a quick way to fill positions of immediate need during production swings. But more businesses are incorporating temporary employees into their long-term planning efforts, according to a survey of 150 executives by temporary staffing firm Office Team. Of those surveyed, 71% say they incorporate temporary workers into their overall staffing budgets.

While this trend means companies are taking advantage of the flexibility that temporary workers provide and that job seekers may have more opportunities for future full-time employment, temporary employees do carry risks. For one, temporaries are more likely to leave a job for an incremental salary increase somewhere else, says James McCoy, senior vice president of consulting services for Vertitude, a staffing and consulting services firm. To avoid this, manufacturers should consider conducting regular wage reviews to ensure that they're competitive in the market, he says.

Another challenge with temps is high turnover and low quality. "We've seen environments where turnover can easily exceed 100% in a year," McCoy says. But companies can improve productivity and turnover rates of temporary workers by utilizing recruiting tools, such as developing success profiles and administering assessments during the interview process, according to McCoy. "Success profiles help recruiters better pinpoint the type of individual that is more likely to be successful in a role, and assessments allow for statistical proof of these assumptions in a totally objective manner." However, he adds, these tools are much easier to implement in nonunion operations.

In addition, temporary employees can present insurance and risk management issues. Manufacturers can mitigate these potential pitfalls by ensuring that their temporary staffing providers have adequate workers' compensation and liability policies, McCoy says.

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