Temps are here to stay

American Demographics, Feb, 1996 by Jan Larson

The term "temp" brings to mind a replacement receptionist who answers phones and sorts the mail while a salaried employee is on vacation or medical leave. But this is only one of many ways of describing today's contingent work force. The term describes millions of people who, for whatever reason, do not have a sense of permanence about their jobs.

Estimating the size of the nation's contingent work force is like asking a group of scientists when and where the next California earthquake will hit. It all depends. "There is no agreement among scientists about what constitutes a contingent worker or how many there are," says Heidi Hartmann, author of a number of studies on contingent workers and director of the Washington, D.C.-based nonprofit Institute for Women's Policy Research.

The job may be tough, but researchers are scrambling to find the answers. They are counting the number of contingent workers, describing their varied life and work situations, and assessing employee attitudes toward contingent work Managers are eager for this information because the ues of temporary workers, also known as "outsourcing," is one of the hottest trends in business. Two-thirds of surveyed executives of large corporations expect to use more temporary help in the next three years, according to a 1995 study conducted by the staffing service OfficeTeam in Menlo Park, California. The reason is that more managers are using temporary workers as a competitive tool, rather than a simple means of cost control.

Outsourcing such tasks as building maintenance or fleet management is relatively common. But according to a survey by the global accounting firm Arthur Andersen & Company, a growing number of companies are hiring outsiders to take care of central business functions like tax, payroll, and pension management. "Companies are recognizing the need to focus relentlessly on their core competencies," says Dennis Torkko of Andersen's contract services practice. Contingent workers can take care of non-core but essential business functions, he says. As this trend grows, more business managers will view skilled labor as something they can lease with an option to buy.

ESTIMATES VARY

The word "contingent" is fraught with uncertainty. The term has been used to describe a variety of employment situations, including part-time work, self-employment, employment in the business services industry, and work situations of a tenuous nature. Depending on the definition and data used, contingent work force estimates range from less than 2 percent of the working population to an impressive 16 percent-plus. That's a difference of between 2 million and 19 million workers.

The lowest estimate is published by the Federal Reserve Bank of Chicago, at 1.9 million. The Bureau of Labor Statistics (BLS) publishes three estimates based on the results of a first-time supplement to the bureau's monthly Current Population Survey conducted in February 1995. The lowest number (2.7 million) derives from a narrow definition that includes only wage and salary workers who had been in their jobs one year or less and who anticipated those jobs would last an additional year or less.

The second BLS definition adds self-employed and independent contractors who consider their jobs less than long-term, which bumps up the tally to about 3 percent of workers (3.4 million). The third and broadest BLS estimate includes any worker who considered his or her job temporary, resulting in a total of 5 percent, or 6 million.

Some observers consider the numbers low, they say that the BLS definitions are too narrow. Hartmann's 1995 study of the economic impact of contingent work on women and their families found that in 1990, more than 19 million workers, or 16 percent, held contingent jobs. This number was based on the Census Bureau's 1987 and 1990 Surveys of Income and Program Participation.

The number of contingent workers grew 5 percent between 1987 and 1990, according to Hartmann's study, compared with an overall work force gain of less than 4 percent. One easily identifiable portion of contingent workers, those employed by the personnel-supply services industry, is clearly outpacing other industries. Personnel services employment increased 25 percent between 1990 and 1993, compared with 1 percent for total employment, according to BLS data.

Whatever their numbers, contingent workers are no longer limited to clerical duties. They include pink-, blue-, and white-collar workers, according to Lewis Segal and Daniel Sullivan, senior economists at the Federal Reserve Bank of Chicago. Their research focuses on the personnel-supply industry--the largest employer of contingent workers--and much less likely to get it through an employer. This indicates a growing need for affordable private options, says Audrey Freedman, an economist and management consultant based in New York City, who coined the term "contingent workers" in the mid-1980s. "Nobody is really specializing in portable benefits that workers can carry from employer to employer. If entirely self-financed, health insurance is portable, but it's also high-priced," says Freedman.