RSS icon

Top Stories

Today's Contract Workers Are Highly Promotable

April 1, 1998
Related Topics: Contingent Staffing, Career Development, Basic Skills Training, Employee Career Development, Featured Article
If Horatio Alger were writing stories to inspire people to work hard and succeed today, would he be writing about contract workers—or would those workers be the dull background that his heroes overcome? The whole idea may seem fanciful, but HR professionals have a real stake in how that imaginary story would read. The use of contract workers is growing dramatically. In 1995, the Alexandria, Virginia-based National Association of Temporary and Staffing Services (NATSS) found that annual receipts for its 1,600 members (who are one segment of the contract workforce) came to $39.2 billion, and the average daily employment was more than two million workers. Moreover, roughly one person in four in today’s workforce is employed as a contingent worker, according to industry experts.

As contingents gain greater numbers in all levels of employment, HR managers won’t be the only ones shouldering responsibility for developing tomorrow’s workforce. In fact, many hiring agencies already have accepted the challenge by providing skills training for their temporary employees, thereby making them more promotable. Therefore, the options for hiring skilled contingents is improving. Human resources professionals will have to balance the benefits of using this growing army while ensuring the long-term development of their regular workforces. "I think it’s important HR professionals are clear about where temporary workers fit into their internal hiring policies," says Linda Davidson, president of Irvine, California-based The Davidson Group, a consulting firm specializing in the staffing industry. "I do believe that a blending process is taking place and the line of demarcation between the core worker and the temporary worker is becoming less pronounced."

The changing face of contract workers. It will come as no surprise to anyone who works with contract workers that the profile of the typical contract worker is changing. Traditionally, people think of contingent workers as those having clerical or light-industrial skills. These employees still are a mainstay of the contingent workforce, but today the secretary who’s a contract worker may find himself or herself working at a firm in which the accountants, attorneys, HR professionals and even the CEO also are working on the same project as contingent staff.

Indeed, contract workers tend to fall into one of three broad classifications. They may have some skills that enable them to do entry-level, technical or engineering work, or mature skills that enable them to work in a leadership capacity.

Temporary to full time is a strategy a lot of business organizations are using to locate and build up their full-time workers.

One interesting phenomenon of workers in the last two categories is the boomerang-style contract worker. Many organizations are hiring the very highly skilled people they just downsized out of a job. These people then come back on a much more tenuous basis as contract workers in their areas of expertise.

An article in The New York Times stated that 17 percent of contingent workers had previously been regularly employed by the very employers that were now hiring them on an as-needed basis. In some situations, the percentage is much higher. William Ostler, president of Training Delivery Service in Irvine, California, is quoted as saying that of the roughly 1,000 workers he supplies to Pacific Bell in an average day, up to 80 percent are former Pacific Bell employees.

Bruce Steinberg, director of research at the NATSS, explains the need for team effort in supplying a company with the properly trained contingents. "We’re in a service industry, and our goal is to help the business organization meet its goals and objectives." Today, people and businesses are using contingent employment as a way to check each other out without making a lasting commitment. "Temporary to full time is a strategy a lot of business organizations are using to locate and build up their full-time workforces. This has actually become an identified service line that staffing companies now offer," says Steinberg. Adds Jerry Houser, director of the career center at Los Angeles-based University of Southern California: "It’s not uncommon that a 13- to 15-week placement turns into a regular job. What [employers] are saying is that they like hiring this way because contingent staffing gives them a chance to find out if the option really works because it’s so expensive to hire."

In many respects, contingent status also helps individuals get into some desirable companies that they may otherwise have had difficulty entering, says Robert J. Mitchell, president of the Office Ours Division of Outsource International in Deerfield Beach, Florida. He notes that some of his previous contingent employees frequently progress in an organization to the point at which they’re rehired and promoted into decision-making positions, and then they subsequently bring work back to the agencies where they started.

And for individuals who do highly technical work, contingent assignments enable them to keep upgrading and building their skills so they continue to be highly marketable. "The information technology area is specifically designed to build people’s careers," says Steinberg. "Those people realize they’re looking for employers that are going to help them build their careers. If not, they’re going somewhere else. The workers in those skill categories are in the driver’s seat." Staffing and temporary agencies, therefore, are doing more training as a way to provide the value that makes them more attractive to employers.

Staffing agencies take more responsibility for training. As employers shift the main responsibility for career development to employees, hiring agencies are assuming more leadership. According to Steinberg, temporary staffing industry professionals are doing a lot of training. "We actually have a vested interest in improving our workers’ skills. When we improve their skills, we can send them on better-paying assignments and better service our business customers."

The advantage to workers? "It’s somewhat of a retention-and-recruitment bonus. You know, ‘Come to me, and I’ll give you training in the most current software packages and make you more employable.’ It really is a win-win situation," says Steinberg.

One company that offers an exemplary program for preparing today’s workers to move into the job of the future is Milwaukee, Wisconsin-based Manpower Inc. Its Skillware program offers training in approximately 300 different software packages, according to Gretchen Kreske, manager of strategic information. It’s a self-paced program that has caught on so well that some of Manpower’s customers have approached the company about training their regular employees using Skillware. Kreske estimates that more than two million individuals now have participated in such training.

Manpower, she says, did extensive research into what its customers wanted in a temporary employee. The answers reflected many of the same characteristics that an employer looks for in either temporary or regular employees. Customers wanted someone who asks questions if he or she doesn’t know what to do, someone who’s a problem solver, someone who goes that extra mile and someone who gets along well with customers and co-workers.

To train its employees in these soft skills, Manpower has a program called Putting Quality to Work. It’s a videotape-based classroom program that includes instructor-led discussions. For the technical individuals who want to gain new skills and create new career opportunities, Manpower has the TechTrack program. This offers the opportunity to study approximately 300 different CD-based information technology courses. Similar to the other programs, TechTrack is free to the employees, thereby giving them more opportunities for advancement.

Contingents can be trained and promoted. Many of today’s promotion opportunities are occurring within the contract worker arena itself. Says Geralynn Patellaro, human resources manager at Santa Clara, California-based 3Com, "If you work as an operator or receptionist for a managed-service provider, promotional opportunities within a specific skill group probably are greater than within a larger organization." Since she began working at 3Com, Patellaro has observed more promotions within its contract worker staff than among the regular employees in her own organization, particularly as levels of management are flattened industrywide.

Bob Livonius, executive vice president of operations at Interim Service Inc. in Fort Lauderdale, Florida, also observes the appeal of working as a contingent. "There’s a growing interest on the part of the employee to be a contract (or contingent) worker." From the worker’s viewpoint, one can get the training one needs to get better paying jobs and be eligible for career advancement at little or no financial cost to himself or herself. Because the training usually is done on the worker’s own time and at his or her discretion, the opportunity attracts those who are relatively more ambitious.

From a staffing agency’s point of view, training upgrades the skills of its temporary or contract employees. This makes it possible for the agency to fill the requests they get from their customers while increasing the billing value of their temporary employees at the same time. Training programs also help build loyalty so that workers who prefer to remain contract workers will want to continue with the same agency even as their skills and rates increase. The loyalty factor even works when the temporary employee moves into the customer’s company as a regular employee because many agencies find that as these people achieve positions in which they’re responsible for hiring contract workers, they’ll come back to the old employer.

And finally, from an HR perspective, the training offered by service agencies means that HR professionals can count on incoming contract workers having a predetermined level of competence in whatever skills are required for the job. The days when HR professionals could look to the local high school for potential employees who were prepared to work appear to be over. In "Flexible Employment: Positive Work Strategies for the 21st Century," published in 1996 in the Journal of Labor Research, author Edward A. Lenz quotes a U.S. Census Bureau study that indicates employers had "lost confidence in the ability of the American education system to prepare young people for the workplace."

Don’t neglect regular employees’ development. As beneficial as contingent staffing is, HR also must consider the long-term ramifications. For example, where does this new staffing paradigm leave the rest of the regular workforce?

"A lot depends on the organization and whether it has a strong position and policy of promoting from within," says Davidson. "If it does, the entry-level person has an easier time moving up through the ranks." But if the organization bases its hiring and promotional decisions strictly on job qualifications, she adds, the regular staff will find itself facing a more competitive environment. HR managers, therefore, should be clear about where temporary workers fit into a company’s overall staffing strategy and communicate expectations to one’s regular staff, temporary workforce and the staffing agency. "There’s little question that temporary workers are and will continue to be attractive candidates for open positions," says Davidson. Adds Katherine Pedergast, vice president of human resource management at Boston, Massachusetts-based Northeastern University: "I see internal and external staffing solutions complementing each other. The entry-level opportunities always will be rich with growth potential, and most organizations try to balance opportunities for mobility with new perspectives for employees."

This trend of sourcing skilled contingents underscores the importance of regular workers taking responsibility for developing their skill portfolios. However, the situation doesn’t absolve HR from training and developing the core workforce too.

For regular workers looking for a modest improvement in their professional status, they may be able to get promoted within their skill classification or by changing jobs to different employers. However, for any ambitious worker who dreams of going from the mailroom or switchboard to an office with a window, HR professionals should be prepared to counsel regular workers on the specifics of what they need to learn to make themselves more attractive and competitive for higher-level positions.

While HR staff members develop such counseling programs, they’ll also need to be sensitive to the possibility that some regular workers may not be entirely comfortable working side-by-side with contingent workers. Employees may feel threatened, fearing their jobs will be eliminated or that they’ll be replaced by a contingent with better skills. Regular employees’ morale may decline and thereby affect their productivity and loyalty to the organization. Says Patellaro: "Occasionally, regular employees see that independent contractors have more freedom, flexibility and higher earnings than they do. The disparity may cause them to reevaluate their career choices." If HR professionals are aware of such insecurities, they’ll be able to better counsel all types of employees on ways to boost their careers.

Davidson suggests concrete ways to handle this sensitive situation:

  • Establish and communicate an internal hiring/promotion policy that clearly outlines the company’s position on internal posting and hiring decisions. This should include a process that both regular and temporary workforces must follow to be considered.
  • Identify and outline the knowledge, skills and abilities (core competencies) required for each position. Hiring decisions will be easier to make and to explain if this is done in advance.
  • Give the core staff direction on how they can prepare themselves for higher-level positions (tuition reimbursement programs, internal training opportunities, job shadowing and participation in special projects).
  • Set expectations early, starting with the job interview. Let candidates know what the process is for moving up the ladder. If an applicant comes in the door with an understanding that hiring and promotional decisions aren’t based strictly on longevity or seniority, chances are he or she will be more proactive about his or her own skill development.

Opportunities are bright for contingents. For many temporary workers, moves up the career ladder will include a sidestep into regular employment at some point and then movement up the career ladder in the traditional way. The main difference from the past, however, is that they’ll probably start a few rungs higher when they take that regular job than the historical model of the typist or mailroom clerk. "Professionals who are newly entering the workforce will be able to take advantage of several career paths—one by working their way up the ladder and also by working through flexible staffing firms," says Bob Whalen, president of Office Specialists Inc., a regional flexible staffing firm in Peabody, Massachusetts.

Indeed, the trend toward using contract workers is creating whole classes of workers such as the information-technology employees who thrive on new challenges. These people want to move from job to job for the new opportunities for work and learning. They’re reluctant to take regular jobs because they don’t want to become stagnant. HR managers may find they need to be prepared to observe these workers carefully and develop incentives to build loyalty to the company among those whose attitudes and skills blend best with the company culture. The possibilities are endless. "We’re beginning to move away from looking at this group as throw-away workers. Instead, [employers] are viewing them as an important part of the whole part of the human capital of the organization," says Davidson.

Workforce, April 1998, Vol. 77 No. 4, pp. 42-48.

Recent Articles by Donna Albrecht

Comments powered by Disqus

Hr Jobs

View All Job Listings