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A Deal with Just One Staffing Agency

July 20, 2001
Related Topics: Candidate Sourcing, Featured Article
Since its founding in 1997, Exiss has rocketed from 100 employees in a smallfactory to 850 employees who work in two 90,000-square-foot manufacturing facilities.To accommodate staffing needs that peak during the March-to-Labor-Day horseand livestock showing season, Exiss previously relied on four different staffingcompanies, divvying up its personnel needs fairly equally among them.

Name:ExissAluminum Trailers, Inc.
Location:ElReno, Oklahoma
Business:Livestocktrailer manufacturer

    Although the factory is located 30 miles outside Oklahoma City, it’s stillwithin a metropolitan area of 1 million people in six counties. The median ageis 32 and the median income is $26,800. Despite the fact that Exiss pays wagesof up to $11 an hour and offers the relative luxury of an air-conditioned workenvironment, its peak demand for labor coincides with the region’s seasonalupswing in the higher-paying construction industry. Like many other manufacturers,Exiss finds that its productivity is seriously eroded by instability withinits factory workforce.

    The annual turnover rate is 30 percent. In a dual effort to lower turnoverand make seasonal hiring easier, the company’s human resources director,Christopher Smith, last November eliminated the previous strategy and substitutedan exclusive agreement with a single staffing firm, Express Personnel Services,which has eight franchise offices in the area.

    “Because they were hiring off-site, neither the temp agency nor the employeewas bonded,” Smith says. Rather than solving the seasonal labor demand,the strategy proved inefficient. “We found the turnover rate higher withtemporary employees. Our intent is to draw in a higher-quality workforce.”

    It’s a workforce critical to Exiss’s mission: filling the uniqueneeds of its customers. Within the world of rodeo circuits and equine shows,horse owners and cowboys spend the spring and summer in pursuit of blue ribbonsand jackpots. Weekend after weekend, they cover hundreds of miles in trailer-haulingpickups bound for destinations like the Tri-State Barrel Race in Colcord, Oklahoma,or the Equine Affaire at the Los Angeles County Fair in Pomona, California.

    Livestock trailers, including the ones made by Exiss, are subdivided and includeRV-style sleeping and eating quarters for the driver. A top-of-the-line eventtrailer costs $47,595 and has three animal stalls and 13 feet of living space.

    To keep the production of those trailers running smoothly, two Express hiringsupervisors, virtual extensions of Smith’s department, are located on Exiss’spremises. The supervisors screen and place job candidates using the descriptionsthey previously have written after shadowing workers on each assembly line.

    The supervisors also perform drug screening and “integrity testing,”which is a criminal-history check with state law-enforcement authorities. Screeningpotential employees for past criminal behavior is believed to cut workers’compensation claims. A high percentage of bogus claims have been found to befiled by people with criminal histories, says Cindy Fairchild, an Express vicepresident.

    The arrangement yields other benefits for the trailer maker. Since Expresshas responsibility for its recruits, the staffing company provides its own payrolland benefits, including workers’ compensation. The staffing company alsoprovides a safety expert who makes recommendations on precautionary measures,such as having workers perform light calisthenics before beginning each shift.

    Express also holds quarterly focus groups during employee lunch breaks. Thecompany brings in free pizza and provides facilitators who listen to workers’gripes and rumors, even at 1:30 a.m. Smith says he also gets important informationabout the workplace and how conditions could be improved during exit interviewsconducted by Express.

    Part of Express’s compensation is results-based. So far, Smith says, it’stoo early to say if the arrangement is meeting company goals, but early indicationsshow turnover declining by 2 percent a month.

    “Putting our eggs in one basket makes me uneasy,” Smith says. “Ifyou can gain efficiency, though, then you’ll be ahead,” because turnoverwill be lower.

    Fairchild says it can be a challenge for a company to hand over HR functions.While a risk-averse employer may believe that dividing up staffing requirementsacross several services will permit sampling from a broader talent pool, infact, she says, the strategy backfires. The employer ends up without the loyaltyof any single staffing company. And the temporary workers who are referred havevarying degrees of skill, because different staffing services use differentcriteria when screening job candidates.

    Referring to the agreement between Express and Exiss, Fairchild says, “Whenwe know they’re counting on us, we pull out all the stops.”

Workforce, July2001, pp. 64-66 -- SubscribeNow!

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