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Temporary Solutions

Photo by Christopher Gardner

Succumbing to Temp-tation: Candidates at San Jose's Target Personnel Services receive free training in graphics, spreadsheet and word processing software.

Silicon Valley companies love the flexibility and affordability of temp workers, but are we creating a working underclass?

By Laura Stuchinsky

Silicon Graphics prides itself on its open-door policy. Everyone, from the CEO down to the entry-level grunt, has a cubicle. Most are purple. Not only is it difficult to determine rank from a quick scan around the office, but it's impossible to distinguish the temporary workers from the regular employees. The only clue to their presence is the larger cubicle occupied by a satellite office of ADIA Personnel Services, a temporary agency that places temp workers at the 3-D computer systems company.

Temporary workers comprise 10 percent to 12 percent of Silicon Graphics' workforce, 300 to 500 of the estimated 4,000 employees at the company's Mountain View headquarters--an arrangement that has become fairly typical in Silicon Valley. Eric Lane, the company's director of worldwide staffing, calls it "flexible staffing."

Temporary workers allow companies to increase or decrease their workforce at a moment's notice, in response to the market or the release of a new product. Lane explains: "No one wants to be on the front page for having laid off so many workers, but you want flexibility."

The flexibility--to the tune of 2 million workers nationally--may cushion corporations, but turns workers into "economic shock absorbers," argues Chris Benner, a UC-Berkeley doctoral student who is studying the growth of the temporary workforce for Working Partnerships USA, a nonprofit organization affiliated with the Santa Clara County Labor Council. And temporary agency workers are a fraction of a much larger pool of contingent workers, which include part-timers, on-call/day laborers and independent contractors. And most of them labor without the health and retirement benefits provided "permanent" employees.

"What do they mean by flexibility?" he asks. "If it's being done on the back of the majority of workers, that's a real problem."

The word "temp" brings to mind a fleet of pink-collar workers: secretarial and administrative support personnel who answer phones, tap away on keyboards and patiently file reams of paper.

Temporary workers remain disproportionately female and African American; women hold 53 percent and African Americans 22 percent of temporary-help agency jobs. But temps are employed in a wide range of occupations, from computer programmers to home health aides, accountants to electronic assembly line workers. According to the Federal Bureau of Labor Statistics, 49 percent of the temp workforce in 1994 held white-collar jobs while 40 percent worked in blue-collar occupations.

Take Rachael Able, for instance. Able, not her real name, has a master's in business and a law degree. The 40-year-old Belmont resident has worked in marketing and sales in the Santa Clara Valley for years. She even ran her own business. But she hasn't been able to nail a regular job since her marketing position with a music software company dissolved months ago. So, like an increasing number of Americans, she's temping until she finds permanent work.

While corporate America was throwing workers overboard to lighten their loads during the recession, temporary agencies were reeling them in. Between 1989 and 1994 the number of people employed by temporary agencies rose by almost 350,000, or 43 percent, while overall employment rose only 5 percent, according to the BLS.

In Santa Clara County, between 1990 and 1994, temporary employment grew by 48 percent while overall employment fell by 1.6 percent, according to California Employment Development Department data. In fact, Santa Clara County employs approximately three times as many temporary workers as the national average.

Vera Garcia longs for a permanent, full-time job on the children's ward of a hospital, but because of the current turmoil in the health industry, the 41-year-old has turned to a temporary agency specializing in home health care. Not only was her pay cut, but her monthly hours became unpredictable. Her teen-age son was forced to sleep on the coach when she moved from a two-bedroom to a one-bedroom apartment to reduce her expenses. "I haven't gone to a dentist in two years," she says. "It's been a real struggle for me. All I can afford is a used car that keeps breaking down."

Some people like the flexibility of working on a temporary basis, being able to take time off whenever they choose. But according to the BLS, 63 percent of those employed by temporary help agencies and 60 percent of on-call workers or day laborers would prefer a regular job. Only 10 percent of independent contractors said the same, but they typically earn higher hourly wages.

Considering the fact that contingent workers toil without the private safety net stretched beneath most permanent employees, that response is not surprising. While nearly half of all temporary agencies offer benefits such as health, paid holidays and vacations to their workers, few workers actually receive them, according to the BLS, usually because workers fail to meet the agency's eligibility requirements, typically working a minimum number of hours a week over a period of time. Many workers elect not to participate in health plans since agencies usually require them to pay part or all of the costs of coverage.

Plus, depending upon how far up the food chain they've climbed, temp workers may find their paychecks are a bit thinner than those of permanent employees. According to the BLS, the average hourly wage for a clerk employed by a temporary help agency in November 1994 was $6.78 an hour. But a regular employee in the same job would have earned $9.75 an hour, not including benefits, according to a weighted average of 1993 BLS figures adjusted for wage increases.

"It's very worrisome when people who need permanent work can't find it," says Stanford University labor economist Myra Strober. "We don't want a two-tier system where people who have permanent employment have benefits and people who don't, don't. That's a dangerous situation."

"A lot more people are falling through the private safety net," agrees Gary Burtless, senior labor economist with the Brookings Institute. Experts know that when people don't have health care, the public winds up paying the bill, Burtless notes. What they don't know is what it will mean when large numbers of people retire without the cushion once provided by private pension plans.

Beyond the social costs, critics say there are other implications of a temp-heavy workforce. "The problem is, the phenomenon erodes the traditional relationship of employee loyalty to employer," contends William Jiang, a San Jose State University business management professor. "On both sides there is much less commitment. This may backfire. The costs of having employees not as committed to your company may or may not be offset by the labor savings. It may impact productivity as well."

Some workers describe a workforce divided on the basis of employment status.

"You're just a temp," Joyce King recalls hearing numerous times while she did temporary work in human services for a year and a half. "You're not really part of the company." According to King, who requested anonymity, while the rest of the staff at one Silicon Valley firm went to lunch, she was directed to stay behind and answer the phones. "Oh, we'll get the temp to do it," she overheard someone say.

On some assignments she felt as if regular employees were reluctant to teach her too much of their job for fear they might be replaced by her.

That's the kind of tension one-time electronics production manager Rich Loveman says he also saw on the job.

Loveman worked in Silicon Valley for 13 years before switching to real estate, in part because of the transformation he was witnessing in the workplace.

"There was a huge amount of animosity between temporary and permanent employees," Loveman says. Plus, he continues, many temporary workers were resentful when they weren't hired as permanent staff--and most weren't. "To me, as a production manager, it seemed to be a waste of time."

But Lane of Silicon Graphics disagrees.

"It does create different management issues," Lane accedes. "When you have a party and the permanent employees are invited and the temporary employees are not, it's certainly noticed. But depending upon the manager," he insists, "it's not an issue."

But Bruce Steinberg, spokesperson for the National Association of Temporary and Staffing Services, believes the cyclical nature of temporary jobs gives many workers a chance to gain experience, update their skills, and get their foot in the door of a potential employer.

Temp agencies serve as "a bridge to full-time employment," Steinberg says. In fact, NATSS claims to have reduced unemployment levels by helping to move about 5 percent of the workforce into permanent jobs.

Vicki Bartelt of Target Personnel Services in San Jose agrees. "While companies interview to exclude [candidates]," she says, "we interview to include. It's in our best interest to have a large pool of workers. We're even willing to train them to get the jobs." Indeed, on a busy Monday in Bartelt's office, candidates absorbed résumé advice, and signed up for free instruction in Lotus, Windows and other software skills needed in many administrative jobs.

"The nature of how we do our jobs is changing very dramatically, and quickly," Steinberg adds.

"The concept of 'cradle to grave' employment doesn't exist anymore, if it ever did. Job security is not with the company. It's within the individual and the individual's ability to update their skills."

"People talk about everyone becoming an entrepreneur, a business of one, but in my estimation, quite a number of people don't have the skills to do that," counters Maureen Clark, owner of the human resources consulting firm Clark & Associates and a career counselor. "To a certain extent there's sort of a survival of the fittest."

It's important that business be able to compete effectively, Clark adds. "But a strategy that moves forward on one front but moves backward on a social front is not a long-term strategy."

Most experts agree on the rapidity with which change is occurring in the workplace. Where they differ is over the inevitability of the process. For instance, Benner notes that the United States could regulate its temporary help industry. Most of the industrialized nations stipulate the percentage of temps a company can employ, how long they can use them, and what benefits they must offer. Strober proposes that health benefits and pensions be made portable.

Working Partnerships USA is exploring the idea of organizing a worker-run hiring hall, a strategy being pioneered by the telecommunications union, Communications Workers of America. And the SEIU is aiming to organize every temporary health-care worker in the county. Still, analysts predict that the temporary help industry hasn't yet peaked.

"This is not a trend," Clark warns. "This is a complete revolution in the way we work."

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