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Global Temps Fill the Workforce Void

October 1, 1998
Related Topics: Contingent Staffing, Global Business Issues, Featured Article
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If you were Captain Kathryn Janeway on TV’s "Star Trek: Voyager" and you needed an emergency doctor, you’d just conjure up a holographic M.D. using the ship’s computer. And voilá—you’d have an instant medical staff. At least that’s what she’d do.

If only it were that easy. Although business managers can’t create people with computers (however much they’d like to), they’re increasingly looking to other "virtual" solutions to fill staffing gaps with global temps or global free agents. These people are workers that U.S. firms hire to do work on a temporary or contingent basis, just like American temps—only these workers don’t live in America.

The need for these instant temps has been fueled by two factors: a record low U.S. unemployment rate and a growing world preference for free agency (read: not full-time workers). These forces are changing the very nature of the work contract and how human resources managers staff their organizations.

When those factors are coupled with the intensity of the growing global business world, you’ve got forces that could send the average HR professional into orbit trying to find staffing solutions. The good news is you don’t have to go quite that far. But you may have to go farther than you’ve gone before.

To obtain enough of the right kind of talent, the world’s business and political communities are realizing they have to change the way they think—and legislate—about staffing. The legal hurdles are now being challenged by all sorts of international groups. If the legal battles are solved, the floodgates to global staffing will be opened. And the Internet and other communications breakthroughs can be used to their fullest advantage in facilitating candidate searches and ongoing communication with global temps and contingent workers.

"The corporation of the 21st century will need greater flexibility in hiring and developing its human resources," says Brian J. Bohling, senior vice president of human resources for CDI Corp., a Philadelphia-based provider of engineering and IT staffing services. "And the workforce of the new millennium will comprise a new race of nomads who seek greater balance between work and home. The answer will have to be a more creative approach toward deployment of the ‘virtual worker’—the permanent temporary employee." Bohling suggests this trend is already taking hold worldwide and represents an interesting staffing development worth exploring.

A growing interest in hiring contingent workers.
For months, the U.S. unemployment rate (4.5 percent at press time) has been making it tough for employers to find enough people for their job openings. There simply aren’t enough American workers to go around. And in certain markets, like information technology (IT) specialists, the shortage is reportedly even worse.

Because of this shortage of full-time workers, companies have been filling the gaps with just-in-time help—or temporary workers. A recent article in the July/August issue of Houston-based Tempdigest magazine says that contingent workers are a large and important component of the U.S. workforce, and their importance is likely to increase in the future.

"Some observers go further and predict that the temporary workforce will grow faster than the permanent one for years to come," say the article’s authors, Peter Allan of the Lubin School of Business at Pace University in New York City and Stephen Sienko at AT&T Corp., based in New York City. Allan and Sienko also point to the fact that Manpower Inc., the Milwaukee-based staffing firm, is now the largest employer in the United States.

Many U.S. employers say they like having the option of a just-in-time workforce. And experts predict the use of contingent workers will grow in the future. Will these workers help staff the virtual organizations we seem to be moving toward? Indeed, Workforce’s exclusive forecast on workforce trends 10 years from now ("HR 2008: A Forecast Based on Our Exclusive Study," January 1998) predicts that cocooning will become more popular as workers look to their homes for refuge from the pressures of a more competitive workplace and depersonalized society.

And they’ve already started cocooning. In 1997, the U.S. Bureau of Labor Statistics (BLS) estimated 12.5 million workers were employed in "alternative work arrangements" out of a total workforce of 126.7 million people. The BLS broke the total down further: 8.5 million are independent contractors, 2 million are "on-call" workers, 1.3 million are employed by temporary-help agencies and 800,000 are employed by contract firms. And the number of workers who are employed by temporary and leasing agencies (professional employer organizations) has doubled in just the last 10 years alone.

A recent article in Fast Company entitled "Free Agent Nation" (December/January 1998) highlighted the growing desire of American workers to become free agents—slaves to no one and islands unto themselves. Out of a growing psychic need for people to find synchronicity between who they are and what they do, millions of workers are breaking free from organizational bondage.

To help accommodate them, membership organizations such as Manhattan, New York-based Working Today, are helping get contingent workers better (and less-expensive) access to health care, office supplies and other supplies at a discount. The organization (which represents 35,000 contingents) claims it’s the opposite of a labor union. It doesn’t help workers bargain for wages and perks, but helps them bargain for the stuff with which to work.

All this new-fangled contingent work is changing the very nature of the work contract. It’s becoming less of a full-time worker world, and more of a work-as-needed world. At the same time, however, on a separate, parallel course, businesses have become more global, and are continuing to do so.

Our Workforce panelists predict that in the next 10 years, there will be a continued emergence of a world marketplace, which will require development of an international workforce. Most staffing experts say that successful businesses will increasingly recognize that these previously unconnected forces—the benefits of a contingent workforce and growing their businesses globally—will have to merge. Other countries are realizing the same thing.

Temps as free agents:
a growing global reality.
The United States isn’t alone in relying on contingent workers. Large Japanese firms have long used contingents and temporary workers to fill in staffing gaps and to prevent their full-time workers from being laid off. And, according to the Tempdigest article, the use of contingents is also increasing in Europe, especially in the Netherlands, Great Britain and France.

That statistic is confirmed by CIETT (a French acronym for the International Confederation of Temporary Work Businesses), now based in Brussels, Belgium. CIETT, which represents staffing firms internationally, says the number of people involved in temporary work has increased significantly worldwide over the last 50 years. CIETT estimates that the daily average number of temporary workers on assignment through temporary work businesses (TWBs) is around 3.5 million in CIETT’s 24 member countries alone.

According to the European Commission’s "1996 Employment Report," in the European Union, more than 50 percent of the unemployed who found jobs in 1995 took temporary positions. Many of these temp and contingent workers connect with companies through contract agencies or on their own, as opposed to using staffing firms to find work.

According to the Independent Homeworkers’ Alliance (IHA), an Ontario, Canada-based membership organization that serves people who work out of their homes in global locations, there are 48 million home workers in North America. The IHA says companies such as AT&T, IBM, Hallmark Cards, JC Penney and thousands of other firms routinely use qualified home workers. For example, the IHA’s Web site lists jobs for writers, photographers, graphic artists, technical analysts, freelance programmers, medical transcriptionists, Web developers and word processors, among many others.

There’s already been a big spike in the number of international temporary workers hired in the high-tech industry. High-tech companies such as Digital Equipment Corp., Microsoft, Silicon Graphics Inc., AT&T and Northern Telecom Inc. have been relying more on temporaries to work as computer systems analysts, computer programmers, engineers and technical writers.

Legalities frustrate attempts at hiring global free agents.
So the interest and practice of temp and contingent work is growing both in the United States and abroad. But many legal problems prevent companies from hiring temporary workers from abroad—at least in the sense of physically bringing the people to America to work.

The laws governing international work are a touchy subject, and often a frustrating reality, for firms trying to be "borderless" in their hiring and staffing practices. Globalists want a borderless free market for labor. Nationalists want American workers in American jobs.

"The legal aspects are [certainly] there," says Mike Johnson, president of Johnson & Associates S.A., a corporate communications firm based in Brussels that specializes in advising international organizations about communications strategies. "Countries like Belgium—that exist to frustrate would-be entrepreneurs—have bans on independent workers who only work for one client. These bans are led by unions worried about part-time and low-paid workers taking over their jobs."

Legislation of temporary work differs a lot from one country to the next, according to CIETT. The extent of regulation ranges from active acceptance and encouragement (such as in the United States and the United Kingdom) to outright prohibition (such as in Italy and Greece). In those countries where temporary work is prohibited, unregulated forms of black-market temporary help services have emerged.

The absence of the provision of legitimate, organized temporary help services has thus resulted in undesirable practices and insecure forms of temporary work. CIETT’s members hope to bring greater recognition of the contribution of TWBs to overall employment and consequently a decline in such undesirable practices.

In fact, for example, there’s a consortium of Europeans who are trying to erase European laws that limit teleworkers from shopping their skills and talents, at least domestically. Called the "Diplomat Project: European Charter for Telework," the project’s sponsors—partners and expert advisers in all the European countries—are seeking to promote consensus, commitment and action by obtaining commitment to a European Charter for Telework and adopting pan-European telework guidelines. They hope to have a common charter signed by all relevant organizations by 2002.

The charter states their project came from a common frustration: "Europe has a great number of nations, a multitude of regions and myriad city administrations; within these a bewildering variety of rules, regulations, registrations, currencies and tax regimes. The resulting maze of protocols, affecting work practices and business, constantly erodes the competitiveness and efficiency of both traditional and modern European organizations." It seems many Europeans are pushing for more free agency, as well.

Back in the States, the situation is just as difficult in smoothing out the legalities to use international labor. For example, the health-care worker shortage has long been a problem for health-care organizations. And many such firms still look for workers abroad to fill staffing gaps. For example, human resources professionals at Maxwell Healthcare (part of StaffMark Inc.) in Tulsa, Oklahoma recruit and hire between 80 and 100 physical and occupational therapists from Australia, New Zealand, Philippines, South America and other countries each year. The firm sends several recruiters overseas a couple times a year so they may recruit these skilled workers. In some cases, depending on the country, they use local agencies, but they also work with local universities and newspapers to find people.

H-1B visas limit the number of global temps in the U.S.
One of the biggest challenges Maxwell’s HR team faces each year is the cap on H-1B visas. Right now, there’s a fight in Congress over visas for foreign workers who want to work temporarily in the United States. The current law allows 65,000 workers into the country each year. In 1990, Congress established the H-1B visa program with the intent of allowing companies the ability to attract the "best and the brightest" to domestic industries that needed temporary access to highly skilled workers. A worker with an H-1B visa can stay in the United States for up to six years, and many hope to land with employers who’ll sponsor them for a green card, which grants permanent residency. From there, they can apply for citizenship.

At issue is whether there are enough qualified domestic workers to fill what the Labor Department estimates will be 1.3 million computer-industry job openings through 2006. Computer-related H-1B applications received by the department more than doubled from 1995 to 1997, from approximately 80,000 to 177,000. The number of H-1B visas granted during those years grew as well. In 1997, 65,000 such visas were dispensed by September 1, the first time the annual cap set by Congress was reached. When the cap was reached this year in mid-May, many companies stepped up their lobbying efforts to raise it.

In July, Republican leaders in Congress shelved a compromise bill that would have gradually raised the cap to allow 115,000 workers to enter the States annually by 2001. This came after the White House made a veto threat saying the bill didn’t adequately protect domestic workers. Congress was expected to take another look at the bill in September when it returned after a summer recess.

"There will be a problem if nothing is done, unless some legislation is passed on October 1—there are already 20,000 visas pending at the Immigration and Naturalization Service (INS)," explains Ali Cleveland, assistant manager for legislative programs at the American Council on International Personnel, a membership organization that lobbies on worker immigration issues for Fortune 500 companies.

"My experience has been that employers are really trying to hire the most qualified individual for the position so they can better compete internationally," says Kathy Noecker, a partner with the law firm of Faegre & Benson LLP in Minneapolis, who assists employers wanting to get immigration visas for workers. Many employers, in today’s low unemployment market hovering at 4.5 percent, are just trying to find and hire any qualified workers. "The H-1B visa category has been helpful to allow employers to focus on who’s the most qualified applicant, taking into account the difficulties and expense and hassle of getting the H-1B visa," she says. "It’s still often the best option for them if they can’t get a qualified U.S. worker."

Hiring talent by maneuvering around the legalities.
Some firms have found ways to get around the current U.S. legal process. For example, Troy Design Inc., based in Detroit, is a labor subcontractor for such big-name companies as Chrysler and General Motors. Because the unemployment rate in Michigan is only 1.3 percent, the firm, which supplies engineers and other skilled workers to its clients, often can’t find people in-state. It often goes out of the state or out of the country to find people.

"We have agreements with overseas companies to bring in people subcontracted to our company," explains Ron Willbanks, director of recruitment. Willbanks says it finds foreign firms with U.S. subsidiaries that send workers over on an E visa. Troy Design then hires those workers and subcontracts them out to its clients. "There’s a big to-do about Americans taking these jobs. But nobody’s taking them. I have 200 openings right now. If you want to load up a train and send it down here, we’ll hire the [people on it]," says Willbanks. It’s not easy for employers.

But the process isn’t a piece of cake for the job seeker either. "I’m a Canadian citizen who just recently received a green card," says Sandy Pretzlaff, director of competency development at Phoenix, Arizona-based MBATechnologies Inc. "This process took four years. It was extremely difficult, tedious and frustrating. Do Americans realize what people go through to be able to work and live here?"

Perhaps not. But the difficulties have been intentional legal maneuverings to slow the importing of global talent. And the future of the legalities surrounding global temping remains to be seen. In the meantime, companies will continue to seek the best people for jobs, and where those people are located will continue to decrease in importance. What will help most are today’s new technologies.

New technologies will aid global free agency.
Fire up the International Herald Tribune online (www.iht.com), and you’ll run into page after page of workers looking for jobs, and companies with jobs to fill. And it’s only one of hundreds of Web sites where jobs are posted and found. The Internet has exploded with job-seeking and job-placement activity—and is probably the single biggest border-busting technique to revolutionize recruitment since the want ad. It has opened communication internationally as no single person-to-person technology has before.

According to a national survey "NetWorking ’98" commissioned by JWT Specialized Communications, a marketing and employment communications company based in Los Angeles, 70 percent of HR pros who took the survey are using the Internet to post job openings this year, compared to 21 percent in 1996. The survey also found that 70 percent of active job seekers are more apt to use the Internet over traditional methods, such as job fairs, professional recruiters, temp agencies or word of mouth.

Newsgroup job postings have jumped tenfold in a few years, from 342,759 several years ago to more than 3 million by 1996, according to the Internet Business Network (IBN), a Mill Valley, California, enterprise that monitors electronic recruitment. IBN estimates Web-based electronic transmission and posting of resumes will double this year to 2.5 million. Yet experts say U.S. companies aren’t connecting with independent contractors in other countries as much as you might think.

"It seems to me that people are beginning to put their skills up for hire, but I would hesitate to say globally," says Mike Johnson of Johnson & Associates S.A. Johnson, who frequently lectures on HR issues worldwide, is the author of a book on teleworking, Teleworking—in Brief (Butterworth Heinemann, 1997), and authored a just-released research report "Building and Retaining Global Talent: Towards 2002" in conjunction with The Economist Intelligence Unit based in London and Hewitt Associates LLC based in Lincolnshire, Illinois.

"There are a lot of Indians working out of places like Bangalore on programming for U.S. firms, and there are also a lot of call centers in places like Ireland—but for single operators [people who aren’t affiliated with staffing agencies], I think it’s tougher," says Johnson.

Johnson says he knows a few translators and some technical writers who are working worldwide through e-mail, but the problem for most of these people is that their reputation is usually in a small niche or geographic region. "This means that unless [they] take it upon [themselves] to go see people in say, Silicon Valley, [they’re] not going to get work just coming out of the blue."

But with 346,000 information technology jobs vacant in America, recruiters and managers are desperate to hook up with these people. Face-to-face meetings aren’t always necessary. But if they are, satellite interviewing and cameras on computers have made remote networking more possible, and still cost less than a plane ticket in most cases.

"Dealing with local high-end contract labor is difficult," says Dayle Bown, CEO of Tapestry.Net (www.tapestry.net) a Santa Cruz, California-based industry-specific Internet job-search and recruiting service. "I suspect dealing with international contract labor is even more difficult. However, if the H-1B visa situation was different, we’d be looking to do a lot more full-time international hires, especially in the development area."

Many sources say the people are out there. It just takes some work to find them and make arrangements to work with them. The Internet will make this increasingly possible in the future.

Though you may never be able to instantly create people like in Star Trek, there may be hope for a global solution to staffing with the use of temps and contingents who can do work from anywhere.

Workforce, October 1998, Vol. 77, No. 10, pp. 60-68.

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