Do temporary help agencies help? Employment transitions for low-skilled workers

Abstract. Cluster analysis and the classification tree technique are applied to investigate the relationship between the individual characteristics of Italian temporary help agency (THA) workers and their probability of achieving a temporary job. The application aims to show some advantages of these techniques with respect to traditional econometric tools. Sketches of the most common profiles among Italian THA workers are obtained as a result. Besides the typical THA worker pointed out by previous studies (young male workers, with a medium–high level of education, living in the Northern regions), two new profiles have been identified: the first comprising male manual workers with previous job experience, whose average age is over 30 and whose educational level is low; the second comprising young female workers with a medium–high level of education, working in the service sector or in the public sector. The results are compared with the more usual logit analysis and show their robustness.

This paper analyses the effects of Temporary Help Agencies (THA) on occupational mobility by performing an empirical comparison of the job‐to‐job upgrading chances of agency and regular (non‐agency) workers in Spain. We estimate a switching regression model to allow for self‐selection into agency work because of, for instance, more motivated workers being more likely to search for jobs through a THA. We find evidence in favour of the existence of self‐selection in all qualification groups considered. Concerning mobility, we find that agency workers in intermediate qualification levels are less likely to experience demotions than regular workers. THA increase the probability of high‐skilled workers achieving a permanent contract in Spain.

Based on administrative data from the federal employment services in Germany, this paper applies statistical matching techniques to estimate the stepping-stone function to regular employment of temporary help work for unemployed job seekers. Our results show that workers who enter temporary help work from registered unemployment do not enjoy subsequent greater chances of employment outside temporary help work over a four-year period. Neither, however, do they suffer from future greater risks of unemployment. While our results, therefore, do not lend empirical support to a stepping-stone function of temporary help employment for the unemployed, they do neither confirm the existence of adverse effects on the future regular employment and unemployment chances of unemployed job seekers. If anything, temporary help work seems to provide an access-to-work function for the unemployed.

Using prehire biographic and work history data, temporary help agency workers (N= 201) were classified as marginal or satisfactory. Marginal temps had characteristics suggesting poor work histories and willingness to accept any kind of employment. In prior jobs, they were paid less and more likely to have been laid off. They had also been temps for longer periods of time, and were more willing to work weekends and nights. The classification of temps as marginal versus satisfactory was validated using posthire data, showing that marginal temps had lower performance evaluations, and exhibited more counterproductive behaviors (e.g., late, absent, unsafe, or careless).

In the summer of 2008, we set out to hear from Ontario’s growing population of temporary help workers, also known as, temporary service workers. Having already conducted studies of temporary help workers in the United States, we sought to compare the working conditions of temporary workers in Ontario to those of workers south of the border. We visited temporary agencies in Toronto and conducted in-depth interviews with over a dozen temporary help workers. Their circumstances are not unlike those of their U.S. counterparts — they are not adequately rewarded for their vital on-call role in contemporary capitalism and they become “stuck” in this relatively new type of work, unable to find and secure full-time employment.

A disproportionate share of low-skilled U.S. workers is employed by temporary-help firms. These firms offer rapid entry into paid employment, but temporary-help jobs are typically brief, and it is unknown whether they foster longer-term employment. We exploit a unique aspect of the city of Detroit's welfare-to-work program, in which one in five jobs taken is obtained with a temporary-help firm, to identify the effects of temporary-help jobs on the subsequent labor market advancement of low-skilled workers. Welfare participants are assigned on a rotating basis to one of numerous program providers that have substantially different placement rates into temporary-help and regular ('direct-hire') jobs but offer otherwise standardized services. This gives rise to variation in job-taking rates that is functionally equivalent to random assignment. Using provider assignments as instrumental variables, we find that temporary-help job placements yield significant short-term earnings gains, but these gains are offset by lower earnings and less frequent employment over the next one to two years. Job placements with direct-hire employers, by contrast, substantially raise earnings over one, two, and three years following placement. The primary observable difference between these types of job placements is their effect on subsequent employment stability. Direct-hire placements roughly double the probability of ongoing employment in each of the first eight quarters following program assignment, while temporary help placements only positively affect the probability of ongoing employment for two quarters and do not facilitate transitions to direct-hire jobs. These results qualify the interpretation of a large experimental literature documenting the benefits of job placement services for labor market outcomes of low-skilled workers. We find that the benefits of job placements derive entirely from direct-hire jobs; placing low-skilled workers in temporary-help jobs is no more effective than providing no job placements at all.

The Role of Temporary Help Employment in Tight Labor Markets

We examine the effects of temporary help service employment on later earnings and employment for individuals participating in three federal programs providing supportive services to those facing employment difficulties. The programs include Temporary Assistance for Needy Families, whose participants are seriously disadvantaged; a job training program with a highly heterogeneous population of participants; and employment exchange services, whose participants consist of Unemployment Insurance claimants and individuals seeking assistant in obtaining employment. We undertake our analyses for two periods: the late 1990s, a time of very strong economic growth, and shortly after 2000, a time of relative stagnation. Our results suggest that temporary help service firms may facilitate quicker access to jobs for those seeking employment assistance and impart substantial benefits as transitional employment, especially for individuals whose alternatives are severely limited. Those who do not move out of temporary help jobs, however, face substantially poorer prospects, and we observe that nonwhites are more likely than whites to remain in THS positions in the two years following program participation. Our results are robust to program and time period.

The Role of Temporary Help Agencies in Facilitating Temp-to-Perm Transitions

Recent research suggests that nonstandard employment relations may be a source of innovation for the firm. In this article, we analyze firms' strategic correlates and perceived benefits from using two types of employment in‐termediaries—consulting firms and temporary help agencies—in their core activities. Organizations with an innovation strategy are more likely to use consulting firms in their core activities, while organizations that compete on the basis of low cost are more apt to use temporary help agencies. Moreover, managers say that consulting firms are more likely than temporary help agencies to provide them with special competencies in their core activities. © 2007 Wiley Periodicals, Inc.

Executive Overview Over the past 50 years in America, we have gone from a system of work characterized by lifetime employment at a single employer to a patchwork system characterized by low security and high volatility. A major player in our new world of work is the temporary help agency, which serves as the intermediary between workers and companies. Traditionally, temporary help agencies have been regarded, at best, as a necessary evil, and, at worst, as machines that eat up and spit out workers. In fact, the reality is far more nuanced. When job seekers' options are unemployment or degraded employment, working with the staff of an agency that has an investment in promoting its profit-making commodity—good temporary workers— gives them a distinct advantage. Agency staff help applicants and valued workers improve résumés and refine their job expectations in productive ways, and often advocate for better wages, higher-level positions, and more humane, safer working conditions for their temps. Temporary employment today is thus a double-edged sword. While, on average, agency temps receive lower wages, rarely can purchase health insurance, and have virtually no employment security, they can also be buffered from the worst aspects of new employment relations by labor market intermediaries such as temporary placement agencies.

Precarious employment has been associated with adverse occupational health and safety (OHS) outcomes across a range of studies. Temporary agency workers are particularly vulnerable, with studies showing they experience a higher incidence of workplace injury, and a greater likelihood of more severe injuries than all other employment types. Explanations for agency workers’ higher risk of injury have, to date, been impeded by data limitations associated with researching temporary employment. This article seeks to begin filling this gap through analyzing the experience of agency workers based upon two data sources. The first is a unique qualitative and quantitative data set developed from investigated temporary agency and directly hired workers’ compensation files; the second is focus groups of agency workers conducted in the State of Victoria, Australia. Quinlan and Bohle’s (2004) Pressures, Disorganization and Regulatory Failure (PDR) model, developed to explain the greater OHS vulnerability of precarious workers, provides the framework for analyzing the data. After explaining the key concepts in the PDR Model, the article analyses the data to test for evidence of economic pressures, disorganization at the workplace, and regulatory failure impacting upon temporary agency workers’ health and safety. The analysis supports the relevance of the PDR model, and provides an understanding of additional and unique risk factors which contribute to agency workers’ higher risk of injury. Temporary agency workers experience economic pressures in common with other types of precarious workers. However, these appear more acute amongst agency workers. They also confront disorganization risks, extending to mismatched placements; lack of familiarity with host workplaces; and more complex fractured communication. These contribute to workplace risks and create barriers to improving their experience. Many of these outcomes are a result of, or contribute to regulatory failure. The analysis finds strong support for the explanatory value of the PDR model as a tool for understanding how precariousness contributes to temporary agency workers’ adverse health and safety outcomes. It also suggests the complexities of the triangular employment relationship create additional economic insecurities and disorganization problems beyond those experienced by other types of workers, which the regulatory environment has yet to address.

Does temporary employment increase length of commuting: Longitudinal evidence from Australia and Germany

PurposeThe purpose of this paper is to investigate whether labour market entry via temporary work has any (persistent) effects on labour market outcomes.Design/methodology/approachUsing unique data on several cohorts of graduates from the German apprenticeship system, the authors interpret labour market entry via temporary work agency (TWA) work as a treatment and apply propensity score matching and the control function approach to investigate corresponding effects.FindingsThe results indicate a pronounced wage gap but no significant wage disadvantage in the medium term for graduates who switch to regular employment. Nevertheless, approximately 30 per cent of the graduates do not manage to leave the temporary help sector and, as a result, suffer persistent wage penalties.Originality/valueThe numerous studies that investigate the consequences of TWA work on individual labour market performance have not considered the specific situation of young workers after graduation. The rapidly increasing percentage of TWA jobs and the above average share of young workers among temporary workers call for corresponding evidence.

This dissertation explores the effects of lack of citizenship on the wages of low-skilled Non-Permanent Residents (NPRs) in Canada—a category that includes temporary foreign workers, refugee claimants, and people with temporary resident visas on humanitarian grounds. The dissertation uses the 2006 census and quantitative methods (cross-tabulation and regression analysis) to evaluate wage differences between low-skilled workers without citizenship and low-skilled workers with citizenship or permanent resident status. Differences are calculated at the industry sector level and occupation level. The analysis further considers a set of intrinsic characteristics of low-skilled workers (including sex, level of education, official language ability and country of birth) and their occupations (provincial location, rural/urban setting). Empirically, this dissertation confirms that there is a penalty attached to lack of citizenship for low-skilled workers. In absolute terms, low-skilled NPRs earn low wages. In relative terms, these NPRs earn less than both the Canadian-born and immigrants low-skilled workers employed in the same occupations. Among low-skilled NPRs themselves, the Canadian labour market exhibits a hierarchy of wages and labour experiences on the lines of workers' country of birth, province of residence, and rural/urban place of work. Among low–skilled workers born in the same country, wages improve when either citizenship or the rights attached to permanent residence are acquired. From a policy perspective, the dissertation identifies the policy origins and drivers of low wages among low-skilled non-citizens. The thesis makes the case for the relevance of quantitative outcomes analyzed through a critical social lens. From a theoretical perspective too, the dissertation also shows how the state as a biased broker (towards capital) facilitates the implementation of non-citizenship as a means to accessing cheap labour.