It was all a big sham, I finally saw after working for 11 months as a temporary worker at a warehouse for a global supply chain solutions company. The use of temporary staff was not about reducing costs for the company, either through flexibility, withholding benefits, or lower wages. Nor was it about increasing productivity for the company, either through agency screening of employees, or offering full-time status as an incentive. Indeed, the use of temporary staff had little or nothing to do with these business practices. Temporary workers were brought in by the company primarily as a means to turn the staff against each other. Over a period of four years, first as a temp and later as a full-timer, I watched as the workers argued with each other, criticized and insulted each other, and directly undermined each other in an artificially created, viscously competitive work environment.
One of the biggest justifications for using temporary workers is the flexibility it provides in staffing, and the cost savings as a result. Temporary workers can be leased for only the precise number of hours that their labour is required. In this way the company can cover fluctuations in business, and keep labour costs as tight as possible.
But if business increased, the company could ask the permanent staff to stay overtime or work weekends just as easily as the temporary workers. Indeed, whenever the volume of goods coming through our warehouse increased, the Lead Hand called together both the temporary and permanent staff and asked for volunteers for overtime. While at least half of the permanent staff declined to work longer than eight hours, so to did many of the temps decline company demands for overtime work. On every occasion, half of the temps walked out after eight hours and declined weekend work. Ultimately, the company relied on permanent staff just as much as temp workers, to cover any spike in business.
So too could the company have asked the permanent staff to go home early on the slow days just as easily as asking the temporary workers. Indeed, in periods of slow-down management asked if anybody wanted to leave work early. Several of the full-time guys always agreed to go, and it would have been more if the company did not require them by contract to stay for forty hours per week. Going home early cut into discretionary days off and potentially holidays, and so some of the full-timers declined the company request to leave work early. Moreover, I had seen full-timers approach the Lead Hand on their own initiative to leave work early on slow days.
The company could also be flexible with its permanent staff in the event of a prolonged downturn in business. When cutting staff and wages through a voluntary reduction in hours of work was insufficient, the company could always resort to layoffs. Indeed, under the Employment Standards Act of Ontario, an employer can serve an employee with a “Temporary lay-off,” which is partially defined as “a lay-off of not more than 13 weeks in any period of 20 consecutive weeks.” Thus the employer has three lay-off months to work with, and up to five months if they provided that employee some work during that time, such as can occur when business fluctuates as much as it did in our department.
Temporary workers, then, afford the company no more flexibility in staffing than permanent workers. Permanent workers are just as capable of covering peaks in business through overtime, slow days through voluntary reduction in hours, and prolonged slow downs in business through layoffs. The regular use of temporary workers cannot be justified by the argument of staffing flexibility and controlling wages.
Another justification for the use of temporary workers by the company is the opportunity to withhold employee benefits, and again save money. As temporary workers are employed by the staffing agency, the company can exclude them from the benefits plan set up for the so-called full-time staff.
But company benefits did not necessarily cover the full cost of any claims. Custom made orthotics was covered for only 70 percent, with the remaining 30 percent covered by the employee. Employees also paid for 25 percent of prescription medication, and anything over $30 for visits to the massage therapist, physiotherapist, and chiropractor, among other services. A 20 percent deductible was also in effect for some dental care. On top of the deductible for many benefits, there was a weekly premium from eight to ten dollars paid by the employee. Through these direct and indirect costs, the 13 full-time staff in our department contributed $13451.92 to the company benefits plan between April 2005 and January of 2008.
Nor was the benefits plan being fully utilized. One of the staff made no claims for the first two and a half years, and another claimed nothing in his first year. Only two of the guys claimed for orthotics, two for chiropractic, one for massage therapy, one for eye glasses, and five for dental benefits. Four of them made no claims for medication. Moreover, no dental claims were allowed for the first nine months of employment. For short-term disability, if the company doctor assessed the injury as minor, the employee was denied time off work and required to work on light duties. As a result of the low number of employee claims, and the conditions imposed on the benefits, the company paid out only $13989.26.
The payroll savings program cost the company even less than the benefits program. Only one out of the thirteen staff involved in my departmental survey had signed onto the company-sponsored Defined Contribution Pension Plan, and was engaged for only seventeen weeks out of the period from April of 2005 to January of 2008. With the company contributing four percent of his gross pay per week into the fund, as the specified maximum, he collected only $514.45 of company money. That $514.45, along with the company benefits contribution of $13989.26 mentioned above, added up to $14503.71, which was only $1051.79 more than the total benefits contribution from the employees, or only $420.68 per year. That was hardly enough to justify using temps.
Temporary workers, then, afford the company virtually no cost savings on benefits over permanent staff. The permanent staff has to pay a weekly premium, a deductible on most claims, and most under under-utilize the program, including the payroll savings program. The regular use of temporary workers cannot be justified by the controlling of benefit costs.
The third cost-reducing justification for the use of temporary workers by the company is the savings on wages. Temporary workers work for the staffing agency, which can offer their labour at a lower wage than the full-time company staff. By maintaining as many temps as possible on staff, the company can significantly reduce its payroll, and also exclude the temps from any company bonus or incentive plans.
But the wages were not all that was involved in a company paying for a temporary worker. The staffing agency had to pay for recruiting its temporary associates. Part of that recruiting was advertisement, such as with websites, and the phone book. After getting potential workers through the door, they had to be screened. I filled out a lengthy questionnaire about my employment background and skills, and then underwent an interview. Finally, I had to take a computer aptitude test when I indicated some background in Microsoft Excel. All of that advertising and human resources involved in recruiting cost money, money I am sure the agency added to the bill when it leased a temp to a company.
Another cost of a temporary worker was the administration. To begin with, the agency had to provide training and orientation. Two of us were brought into a room to watch a video on health and safety, and then a company video about good manufacturing practices. We were then tested us on both videos, and then also introduced to agency policies and procedures. The second part of that administration was getting paid. While we punched in and out at the company, it was the agency that directly paid us. Weekly payroll was carried out by the agency, a cost which, along with the training and orientation, would have been added to the company’s bill for leasing us as temporary workers.
A third cost of a temporary worker was staffing agency infrastructure. Every month the lease for the agency office had to be paid. Further infrastructure included all of the necessary equipment, such as computers, printers, regular and specialized software, video machines, fax machines, and telephone systems. Moreover, there were desks, chairs, and filing cabinets, along with more basic supplies such writing instruments, stationery, and envelopes for all correspondence. Finally, the agency had to invest in recruiting and training its own personnel. All of those costs could not be borne by the staffing agency. Instead, they had to be calculated as part of the overall bill for leasing a temporary worker to a company.
Temporary workers, then, afford the company no savings on wages over permanent staff. In leasing a temporary worker from a staffing agency, a company has to pay not only for the wages, but also the recruiting, administration, and infrastructure behind that worker. Moreover, the company also has to pay for the profit. The regular use of temporary workers, therefore, cannot be justified by the argument of controlling wages.
Obtaining Better Workers?
Temps are also justified as a means to boost company productivity. One of the ways in which this boost in productivity supposedly takes place is by getting higher quality or more suitable workers. Staffing agencies specialize in staffing, in screening applicants and providing the most reliable and properly trained of their temporary associates to your business, maximizing efficiency and output.
But the temporary workers were hardly screened at all by their respective staffing agencies. I failed the test on Microsoft Excel and still was dispatched to the job. Many other temps must have failed their tests as well, as hardly anybody showed up with prior training in Excel. Moreover, practically nobody arrived in that department with prior experience in shipping freight. The same was true for agency screening on PITO. I had not driven a forklift in at least five years, and never operated a walkie, and was still dispatched to that job. Only five temps that arrived were apparently trained on a walkie, and two of them were so poor they had to be re-trained, by the company.
The agency did no better in screening temps on heavy lifting. While the questionnaire asked if we could lift seventy pounds, it should have asked if we could lift tens of thousands of pounds. That was the requirement for lifting on the brick-load, a 53-foot transport truck un-loaded by hand by a crew of eight guys. Sometimes we got four of these trucks in a day, each one with a thousand or more boxes. It was very hard work, and while some of us adapted to the task, very many more of the temps who arrived on the crew over the next three years did not. Some guys would show up, barely get through one truck, and just disappear.
The staffing agencies also misunderstood screening for personality. Very few of us were just the “warm bodies” the agencies and the company were looking for. We had to make a living, support families, save money for tuition, and support the arrival of family members from overseas. We were naturally ambitious and competitive. We did not like being perpetual temporary workers, and this caused the company a lot of problems. On multiple occasions I argued with the Lead Hand and the Supervisor about when I was going to be hired on full-time. Other temporary workers argued as well, pointing out that they were told that they would get close to, if not the full 40 hours per week.
Clearly staffing agencies are unable to obtain more effective workers for the company. Only half of the temps were wiling to work the expected overtime hours, and the large majority did not possess the job-related skills or the “warm body” mentality. The use of temporary staff, then, cannot be justified on the grounds of obtaining better workers and boosting productivity.
Evaluating The Workers?
Another way in which temporary workers supposedly boost performance and productivity is through the incentive to get hired on full-time with the company. Full-time status is not guaranteed to you as a temporary worker. If you work hard and contribute to the company, you receive the rewards of a full-time employee. Through this approach the company can get the maximum performance from its staff.
But full-time status was not offered as an incentive to temps who worked hard and learned new skills for the company. To begin with you received little support for training. The full-time staff were not about to just let a temp take over the role of shipper. If an opportunity did arise, then you had to compete with half-a-dozen other temps. I waited several months for an opportunity to train as a shipper. Support for training on the Powered Industrial Trucks was equally weak. While at first management allowed unlicensed people to practice on the walkie and forklift truck, and eventually be tested for a license, this practice was shut down not long after I arrived at the warehouse.
Learning new skills for the company did not necessarily mean promotion to full-time status. A fellow named Mukhtar could move fast on the computer and just crank out the orders for the entire shift. Eight months later he still was not hired on full-time, and did not achieve that status until transferring to a third department and higher position four months later. Faisal had an even poorer experience as a temp worker in our department. Within a few months he was shipping freight from the Option trucks as efficiently as Mukhtar, and yet after 14 months he was still working as temp, and was then let go by the company.
The company promoted some people to full-time status who did not distinguish themselves in skills or effort. Walter did not learn any of the shipping procedures. All that Walter could do was ride a walkie, fold packing slips and help out unloading trucks on the DAV crew. While Ophir could load and un-load trucks, he also did not learn to do any shipping. The same was true for Davis when he was hired on by the company in 2009. All of the tasks they performed were important, and all of these guys deserved to become full-timers. But after adding up all of their skills, these guys hardly contributed more to the operation than Muhktar and Faisal.
Full-time status was not being offered as an incentive to the temporary workers. There was little support for training in the shipping and other skills that you supposedly needed to get hired on by the company. If you did learn these skills you did not necessarily get promoted to full-time status. And some staff were promoted despite being average. The use of temporary workers cannot be justified as a means to enhance staff performance, and consequently boost company productivity.
Dividing The Workers
The use of temporary workers by the company was not about enhancing labour flexibility, or withholding benefits from the workers, or paying out lower wages. Nor was the use of temps about better screening or evaluation of potential staff. The company achieved virtually no cost savings or increase in productivity by using temps. What the company achieved was division among the staff. With only a few full-time positions available over a period of four years for dozens of temporary workers brought into the department, it was only natural that we would compete and turn on each other for so much of our time on the job.
One of the ways we competed with each other was over the opportunity to learn new skills. I came into work early to lay claim to the DAV work station. I started arranging the area and opening up the appropriate programs on the computer to let the guys know I was in charge. When one guy realized that he would have to shove me out of the way to get in, he left. Other temps challenged for the opportunity to ship the freight, and when my presence was not enough, I didn’t hesitate to swear at them. “I’m doing the shipping,” one of them said to me one day, to which I responded, “Fuck you, I’m doing the shipping.”
Another way in which we competed with each other was by trying to elevate ourselves over other temporary workers. One temp, with only a few months on the job, was attacked when he told a new temp what to do as a fresh truck arrived and had to be un-loaded. First the new guy argued, and then he pushed the other temp in the chest and knocked him to the floor. A similar situation developed when, as a shipper, I assigned a task to a new temp. He refused to carry out the task, and when I said, “If you don’t like it fuck off,” he responded, “No, you fuck off. You’re an agency guy just like me.”
The temps also verbally attacked each other as lazy and weak. “Come on, do something,” one of them said to another at the work station for shipping Option one day. “Would you do some work,” all of us shouted at one temp on the DAV crew. Not long after, that temp’s work assignment was cancelled. If a temp did not do overtime work, or supposedly took too long on break or lunch, it was immediately noticed by the other temps. I asked to take half a day off after doing a lot of overtime work, and when I returned, one of the temps immediately said to me, “Are you all right now, with your day off?”
Making mistakes on the job was another source of verbal attack between the temps. Whenever a box was placed on the wrong skid when we unloaded trucks by and, we jumped on each other. “Oh look”, we would say, “you fucked-up again.” Elsewhere in the department it was the same. “That guy doesn’t know how to ride a walkie,” one temp would say about another. Some temps would even involve the Lead Hand. I had stuck the packing slips on the wrong side of some TV boxes while they were lying on their sides, and instead of approaching me directly so I could fix the mistake, the one temp told the Lead Hand and really embarrassed me.
Not only did we dump on each other for apparently being lazy and weak, and for any mistakes on the job, but also for not being ambitious enough in learning new skills or helping the company. “That guy doesn’t do any shipping,” we would all say to among each other. “All that guy does is fold packing slips,” was another regular comment among us, despite the fact that somebody had to do that task. Then there was the matter of overtime work among temps. While half of the temps refused to put in overtime, and were not required by law to do so, the rest of us still gave them a hard time about not helping the company.
The temps also turned on each other whenever it appeared that one of us was gaining some advantage. One day a temp came up to me and said, “Did you get overtime today?” He did not get overtime hours, and I replied, “I did, have you got a problem with that?” Another temp turned on me as I took over shipping duties. Whenever I gave a task to a new temp, he would jump in and say, “You don’t have to listen to him.” Later on that same guy went after another temp on the rumour that he was going to be hired on full-time. “Why is he getting hired on,” he said? “All he does is fuck things up.”
This abuse of temporary workers, in the name of good business, has perhaps been the most insidious and effective corporate move against workers over the last two decades. North American corporations have succeeded in seriously undermining unity among labour where it counts most, on the shop floor. If workers are to restore a better work environment for themselves, and be stronger in the fight against managers for a fair portion of the fruits of our economy, then the abuse of temporary labour must be eliminated. Companies already have a three month probationary period in which to evaluate a prospective employee. The same three month rule should be applied to any temporary worker leased by a company. In this way, if the company relies heavily on temps as regular staff, they will have a high turnover and a substantial number of only minimally trained staff. The company will be compelled to hire on most temps soon after they arrive, and the competitiveness and conflict between the temps will virtually disappear.