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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

7. Training

Related to concerns over wages, benefits, and job security is concern that, without strong attachments with firms, workers in flexible staffing arrangements will not receive training they need to keep abreast of technological developments and to secure good jobs in the future. However, there is little evidence available on the training of workers in flexible staffing arrangements and most of it pertains to the temporary help industry. NATSS reported that temporary help agencies spent $260 million to provide skills training for 2 million workers and another $75 million for workplace orientation and other "soft" subjects. About half of these expenditures are computer related (Stamps 1997). While no historical data exists against which to measure these expenditures, some large temporary staffing firms such as Manpower and Kelly Girls have reported large growth in their training expenditures in the area of information technology. A survey of training by temporary help agencies has recently been completed by David Autor, Frank Levy, and Richard Murnane. However, the results of that survey were not available at the time of this writing.

There is also concern that contract company workers are less well trained than regular employees and thus more prone to accident. In a study of the petrochemical industry, Rebitzer (1998) found that low-tenure contract company workers were more likely to be injured than low- tenure regular employees. Rebitzer blamed this fact on liability laws which encouraged the petrochemical firms to make the contract companies responsible for providing safety training of their workers, even though the petrochemical firms were better qualified to provide this training.

8. Why Firms Use Flexible Staffing Arrangements

Several employer surveys have been conducted on the use of flexible staffing arrangements. These surveys provide evidence on why firms use flexible staffing arrangements and why firms have been increasing their use of certain types of staffing arrangements in recent years. One of the earliest such surveys, conducted in 1981, investigated firms' use of agency temporaries, direct-hire temporaries, and on-call workers in six broad sectors (Mangum, Mayall, and Nelson 1985). The Conference Board and the Bureau of National Affairs have conducted surveys of their members, who are generally large and sometimes foreign-based companies, on their use of flexible staffing arrangements (Abraham 1988, 1990, Bureau of National Affairs 1994 and Conference Board 1995). Small-scale surveys of large corporations have been conducted by Christensen (1995) and Kahn (1996). Recently, two large-scale surveys have been conducted on nationally representative samples of employers on their use of flexible staffing arrangements: a survey of 550 employers sponsored by the Upjohn Institute for Employment Research in 1996 (Houseman 1997) and a survey of 1000 employers sponsored by the National Science Foundation (Kalleberg, Reynolds, and Marsden 1999). In addition to employer surveys, several researchers have conducted firm or industry case studies, which shed light on employers' motivations for using flexible staffing arrangements.

Collectively, this research has identified several key factors behind employers' use of flexible staffing arrangements, including fluctuations in their staffing needs, savings on wage and benefit costs, screening workers for permanent positions, and accessing special skills.

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