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Making temp dollars pay
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May 11, 1998: 1:37 p.m. ET
Experts: Research and choose a temp agency before the need arises
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NEW YORK (CNNfn) - Temporary-help agencies have become an increasingly important resource for small businesses, but experts say smaller companies often don't get the best value for their temp dollars.
That's because many small businesses, operating permanently in fire-fighting mode, don't screen staffing agencies carefully -- or if they do, don't establish a relationship until a crisis hits.
Unfortunately, Cherri Carbonara, marketing director for Houston-based Corestaff Services, says small businesses who don't set up a temp-agency relationship in advance can find it hard to get last-minute needs met.
Why?
Most agencies won't send a temp over until a client business fills out a company profile and submits to a credit check -- steps that take time to complete.
Even if your business glides through the credit check and turns around its profile in record time, the temp you need might not be available at the last minute.
"If you call on Friday afternoon during an emergency and you're starting from square one, it's a difficult situation," says Carbonara, whose firm places 100,000 temp workers through about 100 U.S. offices. "We'll still do our best, but if you can provide a little more advanced notice, that makes it easier to line someone up for you."
Sudden needs
Despite hurdles like credit checks, more and more small businesses -- already short-staffed, and often having no human-resources department to conduct lengthy employment searches -- are turning to temp agencies for help.
Agencies not only assist businesses in times of sudden need, but often supply staff on a "temp-to-perm" basis, where workers start as temps but sign on full-time if employer and employee get along.
Employers often must pay agencies "settlement fees" -- usually a percentage of the worker's first year of salary -- when temps join up full time. Nonetheless, many small companies jump at the chance to get not only a pre-qualified temp worker, but to keep that employee permanently if the person works out.
That's especially true in supercharged industries like high tech, where an unfilled position today might mean a lost chance tomorrow.
GoldMine Software of Pacific Palisades, Calif., has about 100 permanent staff members, but keeps a large contingent of temps passing through as well.
The company uses four or five empty office spaces as "temp cubes" to house the stream of project workers it uses each month.
GoldMine production manager Michael Thornburg brings temps in to handle short-lived, routine tasks such as stuffing envelopes for large direct-mail campaigns. Other times, he relies on temps to handle upswings in data-entry workloads.
Often, Thornburg's temps become permanent employees.
"In a very high-growth company like this one, we don't have the luxury to advertise, canvass 20 different applications and then train an individual," Thornburg says. "Using a temp agency, we have a productive employee in 24 hours."
But other small businesses have become frustrated with the process.
Marissa Verson Harrison, co-founder of San Francisco-based InterActive Public Relations, has just about given up on using temp-staffing services.
She's found that asking some of her 25 staffers to work overtime works better than taking time to bring an outsider up to speed.
"I've used temp agencies, but we tend to shy away from them whenever possible," Harrison says. "With temps, you have a learning curve, and training is a strenuous exercise for our staff. I don't want to put that kind of strain on current employees."
Getting control
If you're convinced that temps will fit in your company, experts say it's worth investing some time and energy to get the right ones.
Getting control of your temp-agency relationship isn't hard, though it does take some time, thought and research.
For starters, it's best to know your agency well and make sure their policies address concerns like training, or replacement of unsuitable workers, industry executives say.
For example, many agencies offer employee benefits to long-term temps, but some don't -- and that could affect the quality of the temps you get.
Staffing-company managers recommend that before you consider working with an agency, find out how they attract, screen and retain temps.
"Look at how the (agency) tests their employees," says Andrew Wyatt, senior vice president and general manager of Troy, Michigan-based Kelly Services Inc., which places about 750,000 employees per year through its 1,600 offices worldwide. "Find out if they do background checking. And after they hire, do they offer skills enhancement to employees?"
Also, industry execs suggest finding out what an agency will do for you if the employee has a long training period, or doesn't work out at all.
Many agencies provide a day or more's credit for time the employee spends getting up to speed. Additionally, a lot of agencies don't charge you anything if the temp just doesn't cut the mustard.
Finally, experts say that before you request a temp, make sure you know exactly what you need the worker for.
Many companies -- especially inexperienced small businesses -- pay higher hourly rates than necessary because they call in an overqualified temp.
"Most companies' tendency is to overestimate the skills they need," notes Dan Murphy, national director of temporary services for Dallas-based Source Services Corp., which places 10,000 people per year out of its 54 offices.
Murphy also advises that once you've decided to call in a temp, double-check the billing rate to be sure you're comfortable with the charges involves.
"You'd be surprised how many times companies don't even ask (about hourly rates)," Murphy says. "Companies are so excited about getting someone in that (fees) get lost in the shuffle."
-- by Anne Zieger for CNNfn Interactive
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