HRM textbook

CHAPTER 5 PERSONNEL PLANNING AND RECRUITING 155
Yet using employment agencies requires avoiding the potential pitfalls. For
example, the employment agency s screening may let poor applicants go directly to
the supervisors responsible for hiring, who may in turn naively hire them. Conversely,
improper screening at the agency could block potentially successful applicants.
To help avoid problems:
1. Give the agency an accurate and complete job description.
2. Make sure tests, application blanks, and interviews are part of the agency s
selection process.
3. Periodically review EEOC data on candidates accepted or rejected by your firm,
and by the agency.
4. Screen the agency. Check with other managers to find out which agencies have
been the most effective at filling the sorts of positions you need filled. Review the
Internet and classified ads to discover the agencies that handle the positions you
seek to fill.
5. Supplement the agency s reference checking by checking at least the final candidate s
references yourself.
Temp Agencies and Alternative Staffing
Employers increasingly supplement their permanent workforces by hiring contingent
or temporary workers, often through temporary help employment agencies.
Also known as part-time or just-in-time workers, the contingent workforce is big and
growing. In 2010, about 26% of all jobs private-sector employers added were temporary
positions, two to three times the comparable figures for the last two recessions.
Several things contribute to the trend toward using more temporary employees. One
is continuing weak economic confidence among employers. Another is the trend
towards organizing around short-term projects. For example, Makino, which manufactures
machine tools, now outsources the installation of large machines to contract
firms, who in turn hire temps to do the installations. Flexibility is another concern,
with more employers wanting to quickly reduce employment levels if the economic
turnaround proves short-lived. 77
The contingent workforce isn t limited to clerical or maintenance staff. It includes
thousands of engineering, science, or management support occupations, such as temporary
chief financial officers, human resource managers, and chief executive officers.
Employers can hire temp workers either through direct hires or through temporary
staff agencies. Direct hiring involves simply hiring workers and placing them on the job.
The employer usually pays these people directly, as it does all its employees, but classifies
them separately, as casual, seasonal, or temporary employees, and often pays few if any
benefits. 78 The other approach is to have a temp agency supply the employees. Here the
agency handles all the recruiting, screening, and payroll administration for the temps.
Thus, Nike hired Kelly Services to manage Nike s temp needs.
PROS AND CONS Employers have long used temps to fill in for permanent
employees who were out sick or on vacation. But today s desire for ever-higher productivity
also contributes to temp workers growing popularity. Productivity is measured in
terms of output per hour paid for, and temps are generally paid only when they re
working not for days off, in other words. Many firms also use temporary hiring to give
prospective employees a trial run before hiring them as regular employees. 79
The benefits don t come without a price. Temps may be more productive, but
generally cost employers 20% to 50% more than comparable permanent workers
(per hour or per week), since the agency gets a fee. Furthermore, people have a
psychological reference point to their place of employment. Once you put them in
the contingent category, you re saying they re expendable. 80
When working with temporary agencies, ensure that basic policies and procedures
are in place. For example, with temps, the time sheet is not just a verification of hours
worked. Once the worker s supervisor signs it, it s usually an agreement to pay the