As companies emerge from the recession, many that were battered the worst are now extremely cautious when it comes to taking on new workers. This has led many to turn to temp labor, giving them flexibility that - ostensibly at least - can lead to lower costs.
However, there is mounting evidence that suggests employing such workers can not only raise costs for the company, but even jeopardize the integrity of a company's safety culture.
Most recently, the Center for Progressive Reform released a report that detailed how increasing use of temp workers - especially in the construction and warehousing sectors - may be contributing to lowering corporate accountability, and in turn, unsafe work conditions. As these companies outsource their work to temp firms, employers have less of a reason to ensure their workers are protected against common workplaces hazards.
"Their shared experience is one of little job security, low wages, minimal opportunities for advancement, and, all too often, hazardous working conditions," the report noted. "Employers of contingent labor may escape the financial incentives that are a main driver of business decisions to eliminate hazards for other workers."
Farming, construction, hotels and warehouses have all increased their use of temp labor, and in these sectors, there are several safeguards that should be in place. But when temps are involved, the company benefiting from the temp labor may not be as concerned regarding wages that must be paid if an employee spends time away form work.
Companies that use temps also don't have to worry about healthcare costs, further lowering the incentive to maintain a safe work place, according to the Huffington Post.
"This is a phenomenon that's here to stay, and it's probably increasing," said Martha McCluskey, a professor at the State University of New York-Buffalo Law School and a co-author of the report. "It's not just a supplement [anymore]. Firms that engage in hazardous work now use contingent labor as a central part of their workforce on a regular basis. That changes the picture."
The report also urges the Occupational Safety and Health Administration (OSHA) to crack down on the industries where temps are hired most, and to perform more inspections that lead to stiff penalties if conditions are found to contain workplace hazards.
According to the Post, the shift toward temp employment has become a winding labyrinth of third- and fourth- party outsourcing where little control is placed over new hires. While engineered labor, or placement services that oversee every aspect of the hiring and integration process, has proven to be an effective way to ensure a candidate will be the correct hire, many large players in several industries use traditional temp labor. Wal-Mart, for example, contracts its operations to logistic companies. These firms then hire labor firms to fill the open logistics jobs, creating a large rift between the company and the temp and raising costs all the while.
Take the hotel and hospitality industry, for example. Staffing arrangements in this sector have led to lower pay for workers and more work hazards. Hyatt is known to outsource housekeeping duties to temp labor firms, and when this occurs, corporate accountability has historically gone out the window.
"The indirect nature of the employment relationship inherently creates some special health and safety risks," McCluskey said. "Because workers by definition are working for an agency that's not designing and doing the work, number one, it can cause a lot of confusion and misunderstanding over how to allocate responsibility for the education of workers and for protective equipment."
Other staffing services, such as those that take a managed labor approach, can effectively eliminate these business risks through a cost per unit labor method that ultimately fosters a better employer-employee relationship and costs the company less.