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U.S. Department of Labor Futurework
  Trends and Challenges for Work in the 21st Century
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Flexible Staffing Arrangements

A Report on Temporary Help, On-Call, Direct-Hire Temporary, Leased, Contract Company, and Independent Contractor Employment in the United States

Susan N. Houseman
August 1999

10. Placing Disadvantaged Workers with Temporary Help Agencies

Some states have begun using temporary help agencies to place UI recipients, welfare recipients, and other disadvantaged workers in jobs. This practice has been controversial. Opponents fear that disadvantaged workers placed with temporary help agencies will be likely to fall into a trap of dead-end, low wage, temporary employment. Proponents counter that as a practical matter, with the sheer volume of welfare recipients who must be placed in jobs, state agencies cannot do it on their own. Moreover, they argue that it makes sense to use businesses like temporary help agencies, which know the market for low skill workers and have established credibility with employers. In addition, business surveys show that employers are primarily looking for workers with some on-the-job experience. Even if placements are temporary, workers may gain valuable experience that will help them find permanent jobs in the future (Jobs for the Future 1997 and Bugarin 1998).

Temporary help agencies are no panacea for the problems facing disadvantaged workers, as is illustrated by the following anecdote. The temporary services company Manpower recently held a job workshop attended by 600 welfare recipients in the San Diego area. Of the 600 attending, Manpower asked 158 for follow-up interviews; only 43 showed up for their interview. Of these 43, Manpower placed 23 in jobs, but 3 never showed up for work, and 12 quit or were fired before the assignment ended. Thus, from the original job workshop of 600 attendees, only 8 were successfully placed (Bugarin 1998, p. 10). The problem in many cases is that the clients lack basic "soft" skills necessary to find and retain jobs: they are not punctual, have poor attitudes, lack basic job skills, and have problems with alcohol and drug abuse.

Whether using temporary help agencies--perhaps in combination with soft skill training-- to place welfare recipients and other disadvantaged workers is a desirable strategy for government agencies to pursue depends on whether disadvantaged workers are more likely to find good, stable jobs by using temporary help agencies than they are by using alternative services. The research needed to answer this question--which ideally would involve conducting a random assignment controlled experiment--has not been done.

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