Temp Workers Lower Costs But Also Lower Company Morale

STAFFING with temporary personnel may save companies money, but it could also dampen the morale of regular full-time workers, a Rutgers University researcher finds.

``Companies are going crazy with [the use of temporary employees] as a way to increase their output as the economy picks up, without hiring full-time employees,'' says Gayle Porter, an assistant professor of management at Rutgers University School of Business in Camden, N.J.

But overuse of temporary staff can lead to workplace tensions that could have far-reaching effects on a company, she says. Ms. Porter and two researchers from Ohio State University recently conducted a pilot study of nurses' attitudes about their work at a large Midwestern hospital. Of 32 departments, nine were staffed exclusively with regular employees, and 23 had staffs that included one or more contingent workers. The researchers found that the nurses who worked with temporary staff:

* Were more likely to say they had too much work to do.

* Were less satisfied with their pay level.

* Felt under more pressure to perform.

* Felt the company was willing to sacrifice quality to save money.

Because companies do not have to honor traditional employee agreements such as severance pay when they hire temporary employees, these workers are being used to fill the workplace gaps and to save money on benefits. ``Organizations are gun-shy about rebuilding their staffs,'' Porter says. ``If economic growth falters, the companies don't want to re-lay off their workers.''

Although full-time workers usually receive health and retirement benefits that contract employees do not, the contract employees often receive equal or greater pay. In addition, full-time employees are typically given more demanding work than temporary workers and may feel as if they are carrying a heavier load.

``[Temporary workers] can become unhappy with their levels of work and pay, and often feel as if they're under more pressure to perform,'' Porter says. Management could counteract full-time workers' anxieties about job security and workloads by explaining that contract workers are being hired to avoid future layoffs, she adds.