Management and Organization of Temporary Agency Work

Here to Stay: The Management of Temporary Workers and Work Agencies

The past two decades have brought significant changes in the employment landscape – and figuring large in this has been the rise in the use of temporary workers across Europe and in many other developed economies. According to Eurostat, in 2013 just over 20 per cent of employees in the Netherlands had temporary contracts, and in Spain, Portugal and Poland the figure was even higher.

Since the late 1990s, Koene has been tracking developments in labour markets for temporary workers, the related rise of private employment intermediaries, and the various regulatory frameworks put in place to deal with this. He also regularly brings together HR practitioners, academics and policymakers to discuss issues surrounding the use of temporary work.

What began in the second half of the last century as an adhoc solution to temporary labour shortages and peaks in demand has now become a mainstream strategic approach to sourcing labour. It’s an area that is often contentious, prompting concerns about exploitation, dwindling job security and the undermining of wage levels and working conditions. Yet there is little doubt, says Dr Bas Koene of the Erasmus Centre for Human Resource Excellence at RSM, that the use of temporary workers, either independent contractors or hired through intermediary agencies, is here to stay.

What particularly fascinates him is what this growing dependency on temporary workers – and in particular those hired through temporary work agencies – means for HR management and organisational practices. It is a key area he feels has not received sufficient attention:

“Most of the theory on how to manage people in organisations addresses people with permanent positions. However, as companies change, that’s no longer the reality for many people. When there is a lot of insecurity and a succession of short-term jobs, long-term perspectives and the long-term promises of the company become less clear, and what’s needed from the company in terms of HR practices also starts to change.

“Having HR practices aimed at what were traditionally your core employees no longer works. We need to reconsider what that means for the organisation, and how practices need to be changed and adapted to get the best out of these ‘blended’ workforces in which permanent and temporary workers work side by side.”

His most recent contribution to the debate is a book published in March 2014 which he hopes will break new ground by illustrating the diversity of approaches and practices around the world. In Management and Organization of Temporary Work, Koene and his co-editors Professor Christina Garsten of the University of Stockholm and Copenhagen Business School, and Professor Nathalie Galais of the University of Erlangen-Nuremberg, bring together cases from across Europe and North America, drawn from many different industries.

“The book provides a rationale for why it is important to take not just a socio-economic or political perspective on temporary work but also to see it as something that needs to be dealt with in an organisational context,” says Koene. “Most studies have focused on the contributions made by temporary work agencies to the overall labour market, rather than on how they reflect and contribute to a new way of organising and understanding employment.

“As we discuss in the book, temporary work has both advantages and disadvantages, and it makes certain things different, and that’s what makes it interesting. If you bring in temporary work agencies, you also add a layer of organisation between the labour market and the actual execution of work. So a significant focus in the book is on what temporary work agencies can offer there and what is involved for all parties in managing that triangular relationship in a productive and sustainable way.”

The book is structured around four main themes. Looking first at the nature of work, it explores how our notion of ‘temporary’ is shifting and what this means for the relationships between workers and organisations. Next it examines the kind of strategic choices that companies make when deciding how to structure temporary employment, particularly when using intermediaries. A third section focuses on how to manage the temporary workforce when this becomes a significant part of the company’s overall workforce – and considers what impact this has on employee identity and commitment. The final section explores how temporary agency work is organised and managed in different national contexts, highlighting variations and the changes that are taking place.

Temporary agencies are often vilified, says Koene: they are held responsible for commodifying workers, and playing a major part in creating markets that are increasingly transactional and short-termist in nature. To understand what is really needed to manage sustainable flexibility in the labour market, we require a more dispassionate analysis of what agencies actually do, he argues – something which was the focus of some of his earlier research:

“What we saw is that although they operate in a very marketised environment where people relate to one another through legal employment contracts rather than by building relationships, the agencies themselves are in fact building relationships all the time – with client organisations and also with the temporary workers who are on their books.” That, he adds, is the only way that an agency will be able to hold true to its promise to find its clients the workers or the jobs they need, at the point when they are needed.

This promise is of growing importance in the management of temporary relationships, he stresses. Temporary workers are no longer confined to relatively low-value, peripheral activities: very often they are now engaged in work that is core to the organisation – as, for example, when consultants are brought in to manage key projects. This makes it all the more important to consider how to integrate these temporary workers effectively into the organisation.

But even if organisations use temporary staff in roles they regard as less core, there are still advantages to be gained from ‘active management’ of these workers, says Koene. “Paying special attention to them and trying to deal to with their specific needs and possibilities is really important to make them productive, and keep them motivated and attentive in their jobs.”

Those issues of motivation and commitment are ones which he is exploring in his latest research, looking at how temporary agency workers perceive HR practices, what matters to them, and how it affects their attitude to work and their perception of their own performance.

Dr Bas Koene of the Department of Organisation and Personnel Management is a member of ERIM and of the Erasmus Centre for Human Resource Excellence. He is also Director of the RSM Case Development Centre. 

Koene, B.A.S., Garsten, C. & Galais, N. (Eds.). (2014). Management and Organization of Temporary Agency Work. New York: Routledge.