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0206 HR Magazine: Using Temps in HR

By Lisa Daniel  2/1/2006

HR Magazine, February 2006Vol. 51, No. 2

Making contingent workers part of your HR management strategy requires planning, communication and knowledge of the law. 

As HR director of AAF International, a manufacturer of air filtration products and systems in Louisville, Ky., Cindy Burns, PHR, understands the predicament facing HR managers who come up short-staffed at peak periods. Because they lack the budget and the long-term need for more full-time HR employees, they’re likely to opt for contingent workers—either temporary workers sent from agencies, or independent contractors.

But keep in mind “you’re going to invest the same amount of time with a contingent [worker] as you are with an employee,” Burns notes.  

To make the time spent worthwhile, and to make optimal use of the contingent worker, Burns plans ahead. She tries to forecast when she will need extra help, such as during open enrollment for health care and other benefits. Then she decides how much of the extra work her HR staff can absorb and how much—and what kinds of—work a temp can handle. For example, she has identified some clerical HR tasks that temps can do with little training.

Such planning, say sources, is key to effectively using temps as part of an HR staffing strategy—but it is only a start. Before bringing temps into the office, HR professionals also should be aware of the legal questions and confidentiality matters involved in such a step, according to staffing agency executives, HR directors and other experts. With those legal and privacy issues in mind, employers also should decide which tasks can—and which should not—be delegated to workers who are not full-time HR employees. Finally, employers should participate fully in selecting temps, rather than leaving everything to an agency.

Ebb and Flow

Burns, like many HR managers, is finding that contingent workers are a necessity, not a luxury, in HR departments whose staff members are stretched to the limit.

Indeed, trying to keep every HR skill set on staff is all but impossible, says Jeremy Eskenazi, SPHR. He spent nearly 20 years managing the in-house recruiting efforts of companies such as Amazon.com and Universal Studios. Now the managing principal of Riviera Advisors, a Long Beach, Calif., firm that specializes in internal recruiting, Eskenazi says: “I’ve tried many times to build an organization with full-time, regular employees that could handle all the functions internally. That is financially infeasible because of the ebb and flow of workload.”

Today’s companies are keenly aware of the size of their workforce and are careful to not let it grow too large, says Allan McKisson, vice president of HR, North America, for Manpower Inc., based in Milwaukee. McKisson finds that companies maintain a regular staff large enough to handle only day-to-day HR work and use contingent workers for busier cycles.

McKisson, a former vice president of Whirlpool, has seen the use of temps from both sides. He has hired temps and contractors for his own offices, and now, as an executive at one of the world’s largest staffing services firms, he also views temps from a provider’s perspective.

Employers that are considering hiring contingent workers, McKisson says, must identify the company’s core competencies—tasks that only staffers should perform—and other administrative or operational tasks that temps can handle, such as payroll processing or benefits call centers.

For example, Manpower uses temps and contractors in benefits administration, information systems and communications. But the company recently reclassified recruiting as a core function and brought it in-house, says McKisson. Other companies take a different view on the subject of using temps for recruiting, and some have found ways to minimize potential concerns about the arrangement. (For more information on using contingent staff for recruiting, see the online version of this article at www.shrm.org/hrmagazine/06February.) 

Confidentiality Concerns

Temporary employees are being plugged into HR to serve as trainers, clerks and employee relations specialists. But—with the possible exception of recruiting—temps and contractors should be relegated to lower-level clerical positions, according to both Burns and Lyn Langmade, PHR, director of human resources for McQuay International, a manufacturer of heating, ventilation and air conditioning systems, based in Plymouth, Minn.

In fact, temps are taboo for many higher-level HR positions. Companies such as Dahl-Morrow International, an executive search firm in Leesburg, Va., have placed temporary HR managers with companies for six to nine months, but some in the HR profession bristle at the thought.

“I don’t think I would recommend having temps in any role where they see employee records,” says Susan Kurdziolek, president of Turn Key Office Solutions, an HR services provider in Arlington, Va. Her reasons for that stance, she says, are privacy laws and the federal confidentiality restrictions of the Sarbanes-Oxley Act and the Health Insurance Portability and Accountability Act.

HR departments are responsible not only for protecting employees’ private financial and health information, but also for keeping watch over insider information that may give the company its competitive edge. With temps, experts note, there is a risk that the same person could work for both you and your competition. Contingent workers could be “gathering information from your organization, and they could take it elsewhere and use it,” says Eskenazi.

Although the mere mention of contingents in the HR workplace sets off confidentiality alarms, some note that contingent employees, particularly contractors, run the risk of ending their careers if they breach confidentiality. “If you mess up, you’re out,” Eskenazi says of contractors.

McKisson, too, sees the threat as minimal as long as the right people are put in the right positions. “I don’t worry about it,” he says. “It’s about making sure you hire the right people and treat them as a regular part of your team. We can’t have people do a job and exclude them from the information they need.”

HR professionals differ on how to give contingent workers company information. Robin Rasmussen, managing director of consulting firm EquaTerra’s EQuation HRO, an HR outsourcing data provider, says procedure manuals are helpful. Kurdziolek is more specific. She says every company should have a policy on who has access to employees’ personal data. Langmade, on the other hand, prefers to gauge information access on a case-by-case basis.

Eskenazi and others recommend protecting sensitive information by having temps and contractors sign confidentiality agreements, which are becoming standard for contingent workers in HR offices.

Make Fitting Choices

While contracts and confidentiality agreements may help cover employers’ legal concerns, HR also must ensure that hired temps or contractors will be a good fit for the HR department and for the organization as a whole.

Professionals across the board recommend a hands-on approach from the start. As an HR director, Burns says, “I would want to be very involved in that [hiring] process, and I wouldn’t leave it in the hands of the temp agency.” She requires four levels of interviewing for contingent employees. “We treat them as if they are our own applicant,” she says. “We want to make sure we get the right person.”

Not all employers are as careful to land the right person. One of the big mistakes companies make when bringing in temps is being careless about “the fit,” McKisson says. Employers need to consider whether the potential temp or contractor is compatible with the culture and work ethic of the office, he says.

Manpower spokeswoman Lisa Tagliapietra says it is rare that its HR temps don’t work out because so much preliminary work is done to ensure a good fit. But when a temp is mismatched, she says, a company realizes it quickly and Manpower restarts the process of finding a new worker. With 147,000 temporary workers on assignment in the United States every week, Tagliapietra says, there is a right fit for every customer.

Valerie Stinson, PHR, director of HR Extras, a temporary placement firm in Portland, Ore., says that when her temp placements haven’t worked out, it usually has been because of a lack of involvement by the client. She recalls a particular failed match in which the company refused to meet with her in advance or participate in interviewing potential temps, leaving Stinson to determine which outsiders would make the best insiders. “I can only do so much to make sure it’s a cultural fit,” she says.

Temps work out best when the organization to which they are contracted engages with them from the beginning, she adds. Rasmussen says contingent workers succeed when the company and the temp agency or contractor work in a collaborative relationship where information about the company is being shared as much as possible.

Along those lines, temp agencies encourage companies to be clear about their needs. Eskenazi recommends being specific about what you consider to be the beginning, middle and end of a job. Others say that immediate feedback—good or bad—is critical.

A Final Recommendation

The biggest mistake companies make in using contingents is failing to factor them into the overall workforce strategy, Rasmussen says.

Like McKisson and Burns, Rasmussen suggests that management take a hard look at the company’s structure and decide what can and can’t be handled by temps or independent contractors. Make long-term contingent hiring plans around the business structure, busy cycles, special projects and changes in work focus. Too often, she adds, contingent workers are underused because their duties have not been well-planned.

“I think the whole contingent workforce piece is still very loose out there,” Rasmussen says. “In so many places, it’s just, ‘Quick, I need somebody here tomorrow to dial the phone.’ As you’re doing your workforce planning, you need to make sure contingents are a key component.” 

Lisa Daniel is a freelance business writer in Burke, Va.

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 Terms and Trends 

The use of contingent workers in all fields declined during the recession set off by the dot-com collapse and exacerbated by the Sept. 11 terrorist attacks, HR professionals say. A turnaround began in 2003, according to Valerie Stinson, PHR, director of HR Extras, a temporary placement firm in Portland, Ore. Now, temporary positions in HR are growing at a faster rate than regular HR positions, according to the Bureau of Labor Statistics. The bureau forecasts that between 2004 and 2014, temporary positions for HR assistants will increase by 55 percent. While increases in temporary positions for HR managers, recruitment specialists and placement specialists likely won’t be as high, they are still expected to outpace the projected rate of increase in regular positions. There are areas where temps are shrinking in the shadow of regular HR employees, however. Regular positions are growing nearly five times faster than temporary slots in compensation, benefits and job analysis. (For more information on HR professionals using temp jobs to further their careers, see Temporary Connections.)

  Temps and the Law 

Once employers figure out what they want temps to do, they need to take into account the law. Besides the administrative details of classifying, managing and compensating temporary workers, there are liability and other legal issues.

For instance, under contracts negotiated between temp agencies and their clients, temporary workers often are considered joint employees under the law, says Lawrence Gartner, a partner at Baker & Hostetler in Los Angeles. Joint status can cause confusion, especially if lawsuits are filed. Under joint status, liability may rest with either the temp agency or the client company, or both. Liability often depends on specific contracts or state law, he says.

Usually, temporary workers lawsuits involve discrimination in the workplace or a breach of contract. The charges can be filed in unpredictable ways, Gartner notes. For example, claims may be filed against the client company over pay or against the temp agency over alleged discrimination at the client’s worksite. Contracts need to be clear about liability and which party is responsible should a problem occur, he says.

Gartner also advises employers to be aware of state employment laws. In California, for example, a person can sue a company for discrimination that occurs while the person is at the company’s worksite, regardless of that person’s relationship to the company.

Gartner recommends having an attorney negotiate and draft the initial contracts with contingent workers, then monitor contracts over time.