'Temps' Sought on Short Notice
JUST-IN-TIME delivery is moving off the factory floor and into the office, as more companies demand temporary help on short notice. Even though companies are using fewer temporary workers during the recession, there have been an increasing number of rush orders in the past few months, says Karen Hardcastle, Boston's branch manager for Tad Temporaries, a nationwide temporary-help service firm.
In the past, customers usually gave a day or two for her office to find temporary workers for the company. These days, she says, it is common for customers to call at 8 o'clock in the morning and want a worker by 9.
Thomas Routhier, owner of Routhier, a small temporary-employment service firm in Boston, has also seen an increase in rush orders in the past few months. He cannot always find workers in such a short time.
Though not all "temp services" cite such a trend, the increase in rush orders is not limited to the Northeast, where the recession has hit hardest.
Remedy/Temp, with 80 branches concentrated in California and Arizona, has seen these "ASAP" requests for help increase 48 percent in May from April, says Paul Mikos, the company's president.
The reason, Mr. Mikos explains, is that many firms have cut back staff to the bone, and are waiting until the very last minute to figure out the workload for that particular day and then calling "temp" services for help.
David Leibowitz, vice president of American Securities and an analyst of the temporary-help industry, concurs with Mikos, noting that rush orders are prevalent among companies that have cut their payrolls drastically.
However, Jane Riesterer, spokeswoman for Kelly Services, the nation's largest temporary-employment service, does not note a surge in short-notice orders. She says these have been a regular part of the business for years.
There are about 3,500 temporary-help services in the United States, providing more than 1 million workers a day to clients ranging from small businesses to Fortune-500 companies. By using temporary workers, businesses keep payroll costs down.
Between 1980 and 1989, the temporary-help industry grew at an average rate of 9.3 percent a year, almost five times faster than permanent employment, according to the National Association of Temporary Services.
ONTRARY to what many people believe, the industry is not recession-proof.
"Anybody who tells you we are doing well during the recession are not telling the truth," says Mitchell Fromstein, chairman of Manpower Inc., the world's largest temporary-help firm. Manpower's annual sales growth dropped to 7 percent last year from 15 percent in 1989. And earnings were down 25 percent last year from 1989, he says.
Kelly's $330 million in first-quarter sales were down 7 percent from last year, and earnings dropped 47 percent. The poor earnings reflect increased price-competition in the industry, says Kelly spokeswoman Barbara Pardue. She says price-cutting pressure preceded the start of the recession last year.
"A few years ago, when clients asked for temporary workers, they seldom asked about prices. But these days, they frequently asked about prices first, and shop around for the best rate," says Ms. Hardcastle of Tad.
In New England, some small temporary-help services are going out of business. Even nationwide companies, such as Kelly and Adia Personnel Services, are consolidating offices in Boston due to the reduced demand and the competition, says Hardcastle.
As more people are looking for jobs during the recession, the quality of temporary workers is increasing, says Mikos. A year ago, any qualified person who came to Remedy was sent out to work because the company had more jobs than it could fill, Mikos says. Today, this is no longer the case.
Familiarity with computers and other office automation skills are in high demand at most temporary-employment companies.
At the same time, the companies compete to retain their workers. If temporary workers are not satisfied with an agency, they can simply go to other agencies. This will increase costs in training new workers and recruiting efforts. For this reason, Mikos says it is very important to treat his workers well.
Kelly and others pay vacation and holiday pay for their temporary workers. However, the most important thing, Ms. Riesterer says, is to keep workers busy.