Permanent hiring of temporary workers is picking up - The Buffalo News

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Permanent hiring of temporary workers is picking up

Jamie Norton needed a job. She had lots of education, little job experience and wanted to stay in Buffalo. “I was looking for an opportunity to get my foot in the door at an organization with the potential for growth,” Norton said. “The job search was difficult.”

For four months, she worked with career counselors, went to career fairs and sent out dozens of résumés, but got nowhere.

Most frustrating was that most of her inquiries were met with silence. She got no response at all – had no way to make contact with recruiters and showcase what she had to offer.

“More than half the battle seemed to be getting an interview,” she said.

So, like more and more Western New Yorkers today, Norton overcame that hurdle by turning to a temp agency.

Superior Group evaluated her skills, plugged her into a network of recruiters and got her in front of hiring managers almost immediately.

“It takes some of the weight of interviewing off of your shoulders,” Norton said.

Her first placement was as a temporary administrative assistant with Moog Industrial Group, the aerospace company in Elma. That temporary assignment lasted a year before turning into a permanent position in purchasing at the company.

Like Norton, many of today’s job seekers are increasingly finding work through staffing agencies.

Temporary jobs grew by 20 percent in Buffalo Niagara from 2010 to 2013, accounting for 10 percent of all local job gains, according to data firm EMSI.

It’s a familiar trend during times of economic uncertainty.

When companies feel tentative in unstable economic times, they’re reluctant to take on the cost and commitment of permanent employees. Instead, they turn to staffing agencies to provide employees who can be shed easily if work demand slows.

But as the economy improves and employers get more comfortable taking on permanent workers, more of those temporary jobs are turning into permanent ones.

“It has definitely started to pick up over the last year. You’re starting to see people get a lot more opportunities in front of them,” said Bob Nealon, Buffalo regional manager for staffing agency Robert Half. “A lot of firms have started getting busier, so they’re using temporary workers as a vehicle to feel out staffing levels, and as they see it’s sustainable, they’re converting those folks over to permanent hires.”

In the Buffalo Niagara region, jobs in customer service, manufacturing, information technology, life sciences, and banking and finance are in particularly high demand.

“High-tech and high-profile companies look for good workers they can keep,” said Jerry Newman, a distinguished teaching professor emeritus in the University at Buffalo School of Management.

Companies that have workers dealing with a lot of proprietary information, such as in the life sciences, are also likely to hang onto employees.

Bidding wars

Large growth at a few local banks coupled with more stringent government compliance regulations have employers scrambling to add banking and finance personnel. IT work, customer service and administrative assistance are needed across all industries.

The conversion rate from temporary to permanent employment would probably be higher in the IT sector, experts said, but in-demand workers in those fields find they can negotiate better, faster pay raises by jumping from one contract to the next.

With their skills in such high demand, IT workers can benefit from the sort of bidding wars that result when employers compete among one another to secure their services, according to the consulting firm Staffing Industry Analysts.

Permanent hiring of temporary – or “contract” – workers has picked up across many job categories, whether highly or lightly skilled, experts said.

“It has become much more of an employee’s market and, as a result, many times we have opportunities for contract workers, but they’re deciding between two, three, sometimes four other options because of an improving, strengthening employment market,” said Scott Stenclik president and CEO of Superior Talent Resources.

Downsides to temping

Temporary employment does have drawbacks.

For the employer, using a staffing agency eliminates many of the costs and much of the work of vetting, hiring and keeping employees.

Working on a contract basis also spares them from being stuck with candidates who don’t fit in and gives the company more staffing flexibility to deal with market volatility, avoiding layoffs and the unemployment insurance costs that come with it.

That’s especially the case in call centers and customer service, where turnover is high and Buffalo has a great demand for quality employees.

“They do the legwork for us,” said Nicole Williams, a call center manager. “When we bring people in, it’s a good way to test them out and for them to test us out and make sure there’s a good relationship before we get to that permanent stage.”

Employees benefit by gaining new on-the-job skills and getting quicker entry to the workforce.

Shannon Lange sent out thousands of résumés for months to no avail before turning to a temp agency. Within a week of contacting staffing agency Office Team, she had a job working full time in a call center for a commercial real estate firm.

Six months later, that temporary assignment turned into a permanent position, complete with higher pay and benefits.

Another perk of temp work for employees, according to Newman at UB, is that they don’t have to bear the anxiety of quitting a job they don’t like and can try out a handful of companies and positions before making a commitment.

“If you don’t like the job, you ride it out for the length of contract, then move elsewhere,” he said.

But health insurance can be inadequate if it’s offered at all; paid leave and retirement benefits are hard to come by; and the nature of contract work lacks financial and job security, Newman said.

That’s why many contract workers’ end goal is to have their temporary position convert to permanent.

And although employers have increased permanent hiring of temporary workers, which has traditionally signaled recovery, they’re doing so at a slower pace than during recoveries of the past.

Slower conversions

While 60 to 70 percent of temporary workers at staffing agency Manpower typically get offers of full-time employment when the economy is booming, just 40 to 50 percent are seeing that now, said Jorge Perez, senior vice president at Manpower North America.

In Buffalo Niagara, the conversion rate is closer to 30 percent, but rising, staffing experts here said.

There is also concern that more employers are hiring temporary workers with no intention of taking them on permanently, as a way to cut costs and circumvent worker protections.

Workers hired solely on a contingent basis are specified as “temporary” or “contract” hires, as opposed to “temp-to-perm” or “contract-to-direct” workers.

“Temporary staffing went from being this little niche to being some of the biggest employers in the country,” said Sam Magavern, co-director of the Partnership for the Public Good.

The Partnership for the Public Good recently released a study tying temporary work to lower wages, dangerous working conditions, discrimination, decreased employee protections and even worker abuses.

Worker advocates urge prospective temp workers to shop around with reputable agencies to get the most-favorable terms and to work with more than one staffing agency to find the placement that is right for them.

By law, staffing agencies must also put wage agreements in writing in the employee’s native language.

The Partnership for the Public Good’s study criticizes companies that use temp agencies to fill jobs that are not temporary in nature and accuses them of using temp workers to cut costs and circumvent worker protections.

But the staffing industry sees the new prominence of the temporary labor force as a sign of the times – a necessary efficiency in a new economy, especially at a time when workers themselves are jumping from job to job more often.

It’s less damaging to workers to know they don’t have permanent employment, so they don’t buy a car or take out a mortgage they might not be able to continue paying, experts said.

“Companies have been figuring out that, rather than hire people and lay them off, which is expensive and demoralizing, it’s better to have a permanent layer of your labor force that is contingent,” said Jon Osborne, vice president of strategic research at Staffing Industry Analysts.


Temps on the rise

20%: Percentage of temporary job growth in the Buffalo-Cheektowaga- Niagara Falls metro area from 2010 to 2013, (an addition of 1,203 jobs) according to data firm EMSI.

$33,035: Average earnings per temp job in 2013 in the Buffalo Niagara region according to EMSI.

23.8%: Percentage of temporary-to- permanent hiring through recruitment growth in Buffalo Niagara in 2013, according to staffing agency Superior Group.


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