The temporary or contingent worker industry has been around for more than 50 years, and has steadily grown in the scope of workers that are provided. Temporary workers are hired as nurses, engineers, accountants and clerks, but also as day laborers and service industry workers. The larger the company, the more likely it is to use temporary workers. It is estimated that temporary labor firms employ approximately 2.8 million of all U.S. workers and that in the first quarter of 2007, this industry generated $17.4 billion dollars of revenue. Since 1990, temporary labor revenue dollars have almost tripled.

Building service contractors wishing to leverage their market share by offering a broad range of services to their clients may find additional revenue dollars in providing trained workers to bridge the gap in industries that have traditionally had in-house janitorial staffing such as hotels, schools, government facilities and hospitals.

Since BSCs typically have access to a large labor pool and understand the necessity of having a considerable number of applicants available to start work on short notice, the temporary labor business is a good opportunity for BSCs to add to their book of business.

Contractors have the financial advantage of billing the customer weekly for a solid cash flow to fund the venture. Other benefits include potential bottom line profits of 20 percent or better and no outlay of capital equipment.

A good barometer for pricing is to take the employee’s hourly rate, plus benefit/tax burden percentages by man-hour, administrative and payroll fees, then calculate the amount of desired profit. Rates will vary by the position and type of labor that is needed such as skilled or unskilled. In temporary service agreements, the client and the providing company agree on a billing rate per man-hour, however, some pliability will be needed with the client when the available labor pool requires a higher wage rate than anticipated.

While this side of building service contracting is very lucrative, it’s certainly not without its distinct challenges.

Communication
To be successful in this type of endeavor, it takes a great deal of communication between the customer, staffing provider and the employees.

When placing a job order, the client needs to fully understand the lead time it might take to place qualified people in his building, the time reporting and billing process, the amount charged by job position, and the person in the company who will be the point of contact for job orders and employee issues. For the contracting firm, it is vital to know the duration of time it is expected for the job to last, and to ensure the employee understands the length of the assignment. Often, in a rush to get workers, both the client and the contractor fail to adequately communicate or discuss this basic information.

Prior to placing an employee with a client, both an up-front discussion and written agreement must be in place regarding hiring the employee. It’s natural for a client to want to directly hire a person that performs well, but the contracting firm may be out money, especially expected profits, unless strict guidelines are in writing. Likewise, the employee needs to understand they are not to approach the client asking to be hired without a BSC’s consent.

Communication is not only key with the client but with the employees as well. The employee needs to recognize that issues such as absenteeism, injuries and changes in employment status must always be conveyed to the contract manager as well as the supervisors at the job site so that minor misunderstandings do not occur.

Labor Issues
Background screening and documentation are two vital aspects of contract labor agreements as well as any type of employment verification process. Many temporary labor firms do not have any pre-employment requirements other than the desire to work; therefore, some applicants that respond to hiring ads for temporary placement often have questionable backgrounds or may fail a pre-employment drug screening test. Most clients require the applicant does not have any felony convictions but may not consider misdemeanors as a disqualifying factor to work in their facility. It is imperative to have these requirements communicated early in the contract so that time is not wasted on inappropriate employees.

Most drug screens take 24 to 48 hours for results to be available, and in a rush to get workers, the client may apply pressure on the provider to hurry the process. While it’s tempting to place an employee on a job site before the results of a drug screen, this can be a potentially explosive situation. Make sure the client understands the time necessary to complete all pre-employment screening.

Documentation is key for any kind of employment records but even more so in a temporary labor situation. Keeping documentation concerning background screening and drug testing, I-9 forms and timesheets if accessible provides BSCs with a safety net should any question from the client or employee ever arise.

Safety
While safety plays a key role at any job site, it becomes crucial in a temporary labor agreement. BSCs with excellent safety performance can see those records deteriorate if their safety program is not enforced at job sites. Some BSCs actually separate the temporary labor division and have a separate workers’ compensation policy so that their premiums are not affected company-wide.

Conditions in which employees will be working must be expressed in detail while negotiating the labor agreement. Injury reporting can easily become damaging for any company if not done properly. If an employee is injured on-site it is the responsibility of the employee or the on-site supervisor to inform the contract manager of the incident as well as provide documentation noting the nature of the accident. As soon as the contract manager has this documentation in possession, it is crucial that he completes an injury report for his own company and directs the information to the corporate risk manager.

With the need for contract labor rising in today’s job market, a profitable partnership between clients and provider companies can emerge with hard work and attention to the details that affect the venture.

Bethany Linly Greene, environmental services recruiter, and Dannette Heeth, CEH, NREMT-B, director of medical treatment facilities and infection control officer, work for Aztec Facility Service in Houston.




POSTED ON: 10/1/2007