What kinds of occupations, employers, industries and public workforce system job seekers do temporary staffing agencies serve? What wages and benefits do public workforce system job
seekers receive?
As stated earlier, temporary staffing agencies provide low-skill to high-skill workers for most occupations and most industries. Some staffing agencies hire low-skill workers for light industrial work, general clerical and day labor. Some agencies hire medium-skill individuals for positions such as administrative assistant, customer service representative and licensed practical nurse (LPN). And some agencies hire high-skill individuals for positions such as computer scientist and engineer.
As with permanent workers, generally the more skilled a temporary worker is, the better the wages and benefits that he or she receives. It also appears that the more skilled a worker is, the more likely it is that their staffing positions are temp-to perm or permanent as opposed to temporary.
For some larger companies, all entry-level workers work for a staffing agency. For example, entry-level workers at Solo Cup work for Adecco and entry-level workers at the Rite Aid distribution center work for Strategic Edge Solutions (SES) Staffing or Doherty Staffing Solutions.
In general, temporary staffing agencies are placing most public workforce system job seekers in positions in warehousing (order picker/packer, forklift driver), food service, clerical and housekeeping. Most individuals are working in warehouses, hotels, restaurants, healthcare facilities, and offices in general. For low-skill positions, staffing agencies are looking for individuals with some work experience and some agencies require a high school diploma or equivalent. For medium-skill positions, staffing agencies require high school diplomas or equivalent, and experience in the position. Low-skill workers generally make $8 to $9 per hour to start and do not receive benefits unless they become permanent workers. Medium-skill workers generally earn $12 to $15 per hour. Benefits?
[David Stevens’ data/analysis from Workforce System at Work report]
[MOED data]
Customers who got jobs with staffing agencies earned slightly lower wages than all of its customers did ($7.90 vs. $8.10). In the four occupational groups with the most staffing placements, which represent 80% of MOED’s staffing placements, the wages for staffing placements is the same as all MOED placements in two occupational groups, building and grounds cleaning and maintenance ($8.00), and production (manufacturing) ($7.15), lower in one
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group, construction and extraction ($7.37 vs. $8.00), and higher in one group, office and administrative support ($9.77 vs. $8.50).
MOED analyzed its job placements from July 1, 2001 to June 30, 2002 and found that the industry with the most adult job placements was employment services with 782 or 14% of placements.
This was followed by healthcare with 773.
The average wage in employment services was $8.39, compared with $9.02 for all adult placements, and 64% of adults placed in this industry received benefits, compared with 78% of all adults placed. Employment services was the fifth most common industry for youth placements
(5% of youth placements). They earned $7.01/hour and 9% received benefits, compared with
$7.12/hour and 27% receiving benefits for all youth placements.
The Family Investment Program (FIP) places some of its customers with temporary staffing agencies, mainly temp-to-perm agencies. FIP does not work with staffing agencies that lay off workers after a few weeks. However, some FIP customers work for these staffing agencies on their own. It is important to note that FIP customers must work full-time, unlike most customers of the public workforce system, so sporadic temporary work does not work for them.
FIP has placed customers with Aramark, Spherion, Manpower, Kelly Services, Abacus, and
Snelling & Snelling. The program has placed customers in warehousing, assembly, clerical,
GNA/CNA, driving (non-CDL), food service and security positions and they have worked in hotels, restaurants, stadiums, hospitals, doctor’s offices, and the airport. Customers with limited work experience can get light industrial and clerical jobs. Agencies that hire on a temp-to-perm basis screen individuals more carefully than agencies that hire on a temporary basis, according to the FIP staff. Their customers generally make $6-8 per hour and receive no benefits for entrylevel jobs and can make $12-14 per hour after nine months.
In general, Catholic Charities’ St. Jude’s Employment Center does not place clients with staffing agencies but has placed a few clients with Adecco. According to the staff, St. Jude’s serves primarily unskilled and low-skilled individuals. The organization tries to help clients get a job that they would be unable to get on their own and it feels that clients generally can get low-skill temporary jobs on their own. The staff said that some of St. Jude’s customers work for staffing agencies to make some quick money but they are looking for permanent jobs. However, St.
Jude’s does not arrange these temporary jobs. Clients have had light industrial and hospitality jobs.
Some employers were interviewed to see how employers use staffing agencies. Rite Aid operates an 800,000 square foot distribution center in Harford County where it employs 1,500 individuals
(1,200 Rite Aid employees and 300 temporary employees). The company works with two staffing agencies, Strategic Edge Solutions (SES) and Doherty Staffing Solutions. Rite Aid selected these agencies because it feels that they provide good service and they provide on-site service. The company fills all of its warehouse and maintenance positions, about 40 job openings per month, through the staffing agencies. 50% of the job openings are the pick/pack position, in which individuals fill Rite Aid store orders, which pays $9.00/hour with no benefits. The other positions are loading/unloading, which pays $9.00/hour with no benefits, and material handler, which pays
$10.25/hour with no benefits. After six weeks, Rite Aid either hires temporary workers permanently or fires them. If they become Rite Aid employees, they receive a raise ($9.00/hour to
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$10.65/hour, and $10.25/hour to $11.25/hour) and receive health, dental and vision insurance,
401K, and paid vacation.
The Baltimore Marriott Waterfront Hotel works with Hospitality Staffing Solutions (HSS),
Nationwide and others, which it selected after interviewing and auditing several agencies. The hotel uses staffing agencies to fill entry-level positions including housekeeping, dishwashing and banquet service, and hires about ten individuals for these positions combined per year. The staff would not disclose wage information but said that temporary workers are paid about 50 cents less per hour than their permanent counterparts and are offered health and dental insurance by their staffing agency. If workers become permanent, they are offered health insurance, 80% of which is paid for by Marriott, as well as the aforementioned salary increase.
A few temporary staffing agencies were also interviewed to see who they hire and which positions they fill. Spherion hires low-skill to high-skill workers for temporary, temp-to-perm, and permanent positions for most industries. Most public workforce system customers are hired for lower-skill positions (warehouse picker/packer, general clerical) and a few are hired for customer service and administrative positions. 90% of these positions are temporary and the other 10% are temp-to-perm. Individuals are placed in all industries but particularly warehousing, telecommunications and financial services. Employers include Comcast, Visa,
Direct Merchants Bank, and Bionicare.
For the lower-skill positions, individuals usually need to have a high school diploma and
Spherion prefers to hire individuals who have good communication skills, are at least somewhat computer literate, and have some work experience. For the customer service and administrative positions, Spherion hires individuals with general software and customer service skills and usually with six months to six years of experience in the position for which they are being hired.
Wages are from $8.50/hour for entry-level warehouse positions and average $12-$15/hour for customer service and administrative assistant positions. Employees can get health insurance through Spherion at a good rate but must pay most of the premium.
Aramark Staffing was also interviewed. It provides workers for other Aramark operations, including healthcare, food service, and facilities management, which have contracts to provide services to other companies. The Aramark representative interviewed estimates that her company employs about 2,500 city residents. She said her company is struggling to recruit workers and called the situation “critical”. She also oversees staffing in DC, Chicago and Atlanta and said Aramark’s recruiting situation in Baltimore is the worst. The number of job applicants is down. Aramark sometimes has to bus in workers from DC and Philadelphia. She also said the work ethic is generally bad in Baltimore. Aramark tried to go to an on-line job application but the effort failed here, unlike Philadelphia, because many job seekers lack sufficient computer skills.
Aramark fills positions in housekeeping, grounds keeping, patient services, cooks, maintenance, and others. Aramark hires individuals with at least six months of experience in the position for which they are applying. Unfortunately, said the Aramark representative, many of its employees do not have a high school diploma. Wages range from $7.50/hour to start for lower skilled
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positions to $18.00/hour for supervisors with extensive experience. Employees receive health insurance after 30 days. Vacation leave depends on the company contract.
What kinds of services, particularly training, do temporary staffing agencies typically provide?
Many staffing agencies provide limited computer training, according to Harry J. Holzer.
1 The interviews with staffing agencies supported this. Spherion offers computer tutorials in Microsoft
Office, QuickBooks and many other programs to individuals who already have most of the skills needed by its employer clients. It also offers soft skills training and resume writing to these individuals. The company also offers an Internet-based typing tutorial to all of its employees.
Aramark provides training in soft skills, ServSafe (food handling safety), Team Tips (alcohol service safety), customer service, and banquet service.
How long does it take temp-to-perm workers to become permanent workers, and what percentage of temp-to-perm workers become permanent workers?
Of course, the time it takes a temp-to-perm worker to become a permanent worker depends on the staffing agency, the employer, and the worker. However, it generally takes six to twelve weeks to become a permanent worker. At Marriott, it takes three to four months for temp-toperm workers to become permanent. After six weeks, Rite Aid either hires temporary workers permanently or fires them. At Aramark, all workers are temporary in the beginning and are eligible to become permanent after six weeks. Spherion’s temp-to-perm workers must wait three to four months on average before becoming permanent employees.
However, most of the agencies and employers that were interviewed reported that 40% or less of temp-to-perm workers become permanent. Some staffing agencies assign their temporary workers to different jobs before they are scheduled to become permanent in order to continue selling their services as temporary workers. Currently, 33% of Aramark’s temporary workers become permanent but this figure has been falling and was 65% four years ago. At Rite Aid, about 40% of the temporary workers become permanent employees. The St. Jude’s staff also thinks that most temp-to-perm jobs do not become permanent. However, Spherion stated that
90% of its temp-to-perm workers become permanent employees. The company explained that most of the medium-skill workers (e.g. administrative assistant and customer service representative) who do not become permanent do not possess the right skills at the right time or lack the required degree or experience.
Eastside Career Center model
1 Holzer, Harry J., “Encouraging Job Advancement Among Low-Wage Workers: A New
Approach”, The Brookings Institution Policy Brief, Welfare Reform & Beyond #30, Washington DC,
May 2004.
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Goodwill model
Goodwill Industries of the Chesapeake started its own temporary staffing agency, Goodwill
Staffing Services (GSS), in 1996 to give its clients opportunities to gain work experience. GSS sees itself as an intermediary matching skills with labor needs. GSS operates much like other staffing agencies do. It developed a business plan with the help of the Baltimore Community Wealth
Collaborative. GSS charges employers for a worker's wage plus a 50% mark-up for overhead, the total of which is a little less than other staffing agencies charge. However, unlike most staffing agencies, GSS encourages its employer customers to hire its temporary workers permanently.
Employers may hire workers permanently any time and without paying a finder's fee, which often discourages employers working with other staffing agencies from offering workers a permanent position.
GSS has a pool of about 400 individuals. Anyone may work for GSS. Almost all participants have at least one barrier to employment (e.g. ex-offender, elderly, homeless). Over the years, GSS has served more men than women but has served an increasing number of women recently to the point where now only 60% of its clients are men. Participants are ages 16-70 and most are lowincome. 80% of GSS workers are ex-offenders, many of whom were imprisoned for drug offenses. Through Project Bridge, a program managed by Goodwill, ex-offenders are placed in transitional employment within 72 hours of release from prison. They work in a transitional job for two to four months and then are placed in permanent positions.
GSS places individuals in temporary or temp-to-perm jobs but its goal is to place them in tempto-perm positions. It places customers in entry-level positions or positions one or two rungs above entry-level and in primarily administrative, warehouse, retail, truck driving, manufacturing, custodial, transportation and logistics, and material handler jobs. GSS works mostly with medium and smaller employers as the contracts with larger employers are awarded to the large national staffing agencies.
GSS workers make a little less than $8 per hour, about the same as other entry-level temporary workers. If they work at least 75 hours per month, GSS workers are eligible for health insurance through GSS but they pay the entire premium. GSS offers workers vouchers to buy clothing appropriate for work. It also offers to buy them bus passes when they start their job and takes the cost out of their first paycheck. In addition, Geriatric Nursing Assistant (GNA) Training and
Clerical and Computer Skills Training are available to all of Goodwill’s clients who meet the eligibility requirements, including GSS workers.
From January 1 until August 20, it placed 62 customers in temp-to-perm positions and 367 customers in temporary positions. According to the program staff, one of GSS’ most significant challenges is finding employers willing to hire ex-offenders. It also is confronted by the misunderstanding that all of its clients are disabled and unable to work. Meeting employers' needs is also a constant challenge. GSS is working on improving its screening of workers and wants to offer workers more training in the future.
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There are advantages and disadvantages to placing public workforce system job seekers with staffing agencies but most of these individuals who can get permanent jobs are not well served by staffing agencies. It is important to make clear that the following is an assessment of how well public workforce system customers, most of whom are low-skill, are served. It appears that medium and high-skill individuals are better served by staffing agencies.
The most obvious disadvantage of temporary jobs is that they are less secure than other jobs, which results in unemployment. This includes many temp-to-perm jobs. As stated earlier, only
40% or less of low-skill temp-to-perm workers become permanent. Some staffing agencies assign their temporary workers to different jobs before they are scheduled to become permanent in order to keep them. In addition, low-skill temporary jobs tend to pay slightly less and are less likely to offer benefits than low-skill permanent jobs. However, Harry Holzer found that the wages of low-wage temporary workers grew from their initial job to their subsequent jobs.
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Molly Nash of St. Jude’s also pointed out that temporary jobs lack structure. “Welfare mothers need structure,” she said. When their job assignment changes, temporary workers often have to figure out new transportation, job responsibilities, employers and sometimes childcare. This would be challenging to most individuals, let alone low-skill individuals who are already struggling and often lack good problem-solving skills. In addition, CASA of Maryland and the
Homeless Persons Representation Project found that day laborers, short-term temporary workers who provide manual labor, are often mistreated, at greater risk of injury, and paid less than permanent workers performing the same duties.
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Nevertheless, temporary jobs have some advantages. Sometimes when workers cannot get a permanent job they can get a temporary job. Temporary jobs also provide work experience.
Individuals also can gain access to higher-wage employers through temporary work. In addition, many staffing agencies offer limited computer training, according to Harry Holzer.
4 However, one staffing agency interviewed, Spherion, restricts this training to administrative assistants who already have most of the skills needed by its employer clients. In addition, some workers like temporary jobs because they like the diversity and challenge of doing different jobs. Some individuals also like staffing agencies because they can work when and how much they want to.
However, this does not apply to many public workforce system customers who usually need to work full-time.
Generally the more skilled a person is, the better he or she is served by staffing agencies. For example, it appears that the more skilled a worker is, the more likely it is that their staffing positions are temp-to perm or permanent as opposed to temporary. In addition, as stated earlier,
2 Holzer, Harry J.
3 “Baltimore’s Day Laborer Report: Their Stolen Sweat”, CASA of Maryland and the Homeless Persons
Representation Project, December 2004.
4 Holzer, Harry J.
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some staffing agencies offer certain computer training only to workers who already have most of the skills needed by their employer clients.
This generalization also holds true within the group of low-skill individuals. Staffing agencies hire the most qualified workers among low-skill workers. Even for low-skill positions, staffing agencies are looking for individuals with some work experience and some agencies require a high school diploma/GED. The St. Jude’s staff said that staffing agencies generally are not interested in hiring its clients, many of whom are very low skilled.
Temporary jobs make sense for public workforce system job seekers who are unsuccessful getting permanent jobs. And medium and high-skill individuals are better served than low-skill individuals. However, most other customers of the public workforce system are not well served by temporary staffing agencies. Unfortunately, many of the jobs available to low-skill individuals are temporary so they often have no choice. Increasing numbers of low-skill individuals are temporary workers with low pay, no benefits, and no job security, and are treated like easily replaceable resources.
While not innovative, the FIP staff stressed the importance of developing a good relationship with staffing agencies, including screening its customers and sending them only customers who will be successful. Similarly, the Aramark representative feels that staffing agencies and the public/non-profit workforce system need to interact more. She said that the activity level of public and non-profit workforce agencies has dropped in the last few years. For example, she said that there were many more job fairs a few years ago. A Spherion representative suggested that public and non-profit agency staffs call when they have customers with the skills for their openings. She also recommended that public and non-profit agency staffs provide staffing agencies with their names and phone numbers.
One staffing agency representative said that job opening ads that are sent to one career center are often not shared with the other career centers and would like them to do so.
The FIP staff is interested in seeing if staffing agencies can provide its customers with work experience for less than it pays its current service providers to do so.
The St. Jude’s staff recommended that all employers, including staffing agencies, be educated in interpreting criminal background reports.
Other models from around the country
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