The Growth and Impact of Temporary Employment - Research Paper Example

The Growth and Impact of Temporary Employment Table of Contents Introduction 3 Overview of Temporary Employment inthe United States 3 Statistics on Temporary Employment 5 Factors that Lead to Temporary Employment 6 Effects of Temporary Employments 7 Impact of the Legislation on Temporary Employment 7 Conclusion 8 Works Cited 9 Introduction In contemporary labor force setting, the classification of workers have evolved in include different categories and types due to factors that affect the employment arena. In Montana State Government for instance, the classifications of employees clearly differentiate between permanent, seasonal, temporary, short-term, and even student interns (Montana State Government). The U.S. Department of Labor has specifically defined temporary employees as “an appointment lasting one year or less, with a specific expiration date. It is appropriate when an agency expects there will be no permanent need for the employee” (U.S. Department of Labor 1). The current paper hereby aims to present the growth and impact of temporary employment in the U.S. through initially providing a brief historical overview of temporary employment, prior to presenting current statistics on the subject. The causes and effects of temporary employment on the plight of employment condition in the country would also be examined, prior to a concluding portion would wraps up the points that were discussed. Overview of Temporary Employment in the United States Recent economic difficulties in the country and all over the world have affected the tenure, status, and working conditions of the labor force. There are rampant news that reveal increasing levels of unemployment globally and more workers seeking temporary and part-time employment to be able to support a variety of needs. According to Villarreal and Swanson (2011), aside from economic factors that influence the rate of employment, the concerns about future imposition of taxes and the costs of health care in the country preclude optimistic growth potentials for supporting and sustaining permanent employment. As such, greater numbers of people seeking employment resort to part-time jobs and temporary employment. Citing information from the Department of Labor (DOL), Villarreal and Swanson (2011) disclosed that “in 1956 there were only 20,000 temporary employees: By the early 1970s, there were 200,000 temporary employees, representing 0.3 percent of U.S. employment. In 1990, there were about 1 million temps, about 1 percent of employees. In 2000, 2.7 million temps accounted for 2 percent of employees” (Villarreal and Swanson par. 2). The characteristics of benefits eligibility for temporary employees have been explicitly indicated by DOL, to wit: “Temporary employees are eligible to earn leave and are covered by Social Security and unemployment compensation, but do not receive the other fringe benefits provided to career civil service employees. Current law allows temporary employees to purchase health insurance after they have one year of temporary service, but the employee must pay the full cost with no Government contribution. Employees are not eligible for coverage under the Federal Government Life Insurance program or the Federal Employees Retirement System” (U.S. Department of Labor par. 2). Source: Miller Thus, the disparities between a permanent from a temporary employee lie in terms of differences in the amount of compensation, health care costs, benefits given and availed, chances for promotions and advancement, job security, and retirement benefits. Statistics on Temporary Employment In a recent report written by Konen (2012), it was revealed that “more than 14,000 of the jobs added in July were in temporary help services, a sector that’s responsible for nearly half of total job growth over the past four years, according to the Bureau of Labor Statistics (BLS). The result? More than 2.5 million Americans were employed as temporary workers during the first quarter of 2012” (Konen par. 2). As more organizations have seen the benefits of contracting temporary workers, instead permanent workers, the trend in temporary employment was perceived to be on the uptrend. In the historical data collected by the American Staffing Association, it was revealed that temporary help employment have been on the uptrend since 2010, as shown below: Figure 1: Annual Trends in Temporary Help Services Source: American Staffing Association However, according to the latest employment situation released by the BLS, “In September, the number of job losers and persons who completed temporary jobs decreased by 468,000 to 6.5 million” (Bureau of Labor Statistics). The information is therefore indicative of the volatility of employment trends facing temporary workers in the local setting. Temporary workers have been exhibited to be on the rise when there is an economic upswing; but they are also the first ones to be retrenched in times of recession. Factors that Lead to Temporary Employment The growth of temporary employment in the country was noted to have been influenced by an interplay of confounding factors, to wit: “many factors played a role in the rapid growth of the temporary sector, which expanded by 11 percent annually between 1979 and 1995. About 20 percent of the increase can be explained by the decline of employment at will…Employment at will traditionally assumed that employers and employees can unilaterally end a relationship when and why they choose, unless otherwise stated by contract” (B. J. Nash 23). One of the factors contributory to increased tendencies for employers to hire temporary workers is the flexibility that the kind of employment accords (Nash and Romero). As noted, “companies use temps to respond to changes in demand without incurring the costs of hiring and firing. It is expensive to recruit, train, and provide benefits for new employees. If demand falls, the “adjustment costs” of laying off workers, such as mandatory advance notice of layoffs or severance packages, can equal as much as a full year of payroll. Firms may also use temporary workers to screen potential new employees or to fill in for sick employees” (Nash and Romero 21). Likewise, other factors in the macro-environment could influence the increase in temporary workers including oversupply of labor (graduates exhibiting the same educational backgrounds and fighting for a limited job); minimum demand for work (or virtually no job openings), and avoidance of costs associated with hiring and firing permanent workers. Effects of Temporary Employments The effects of temporary employment should be evaluated from two points of views: (1) from the perspectives of the employers hiring them; and (2) from the views of the temporary workers. Aside from noting the positive effects of temporary employment which included savings in remuneration, benefits and in apportioning amounts for unemployment insurance taxes, among others; there are negative effects of hiring temporary workers. The disadvantages of hiring temporary employees therefore include: hiring personnel that are marginally motivated (since they know that they are only hired on a temporary basis); exhibit lesser productivity; and are reportedly more anxious and depressed (Nash and Romero). From the point of view of temporary workers, the primary goal for taking this kind of employment is for economic reasons: to augment the current level of income that would enable the individual (and his or her family) to be supported by the wages to be received. Likewise, “temp workers report feeling like “second-class citizens” in the workplace, and miss feeling connected to an employer and their coworkers. Others prefer the flexibility, however, and view temp work as an opportunity to quickly learn new skills” (Nash and Romero 22). Still, some temporary workers hope that the employments are opportunities are stepping stones for future permanent jobs from the organizations that initially hired them. Impact of the Legislation on Temporary Employment The Affordable Care Act (ACA) was noted to have significant impact on temporary employment in terms of the additional cost seen to be imposed on employers with more than 50 personnel. As disclosed, “beginning in 2014, the Affordable Care Act (ACA) requires employers with 50 or more employees to offer health insurance to employees who work 30 or more hours per week or pay a penalty. At the margin, the legislation is the biggest obstacle to adding a 50th employee” (Villarreal and Swanson 2). The effect of this is more opportunities for employing temporary workers, instead of paying for health insurance of permanent employees. Conclusion The current paper effectively presented the evolution and growth of temporary employment in the United States. By tracing its meager beginnings and the rising trend that the figures indicated, it could be evidently deduced that temporary employment was the natural recourse in response to the changing forefront of the labor force. A brief overview was initially provided to include a historical backdrop and relevant statistics that exhibited the trend the temporary employment trekked. The factors that led to its increased preponderance included changes in the demand and supply of labor and the impact of the nation’s economic condition. Likewise, the impact that temporary employment impinged from the perspectives of both employers and the employees were enumerated in terms of both advantages and disadvantages noted from both sides. The enactment of ACA evidently pushes for employing more temporary workers to avoid paying exorbitant health insurance costs. The growth of temporary employment has been exhibited to following an increasing trend, but also parallels the movement of the economic condition. Despite the apparent lower benefits given to temporary workers, as compared to permanent employees, the current global economic atmosphere provides that perfect condition that satisfies the requirements for temporary employment. As aptly emphasized and concluded by Nash and Romero, “temp work is an important part of the flexibility that is one of the U.S. economy’s great strengths” (38). Works Cited American Staffing Association. "Annual Trends in Temporary Help Services." 2012. 7 October 2012 . Bureau of Labor Statistics. "Employment Situation Summary." September 2012. 7 October 2012 . Konen, Leah. "Temp Jobs: 3 Workers Say What It’s Really Like." 17 August 2012. The Fiscal Times. 7 October 2012 . Miller, Nancy. "Same Job, Less Pay: Temporary Workers Fill Labor Needs." 22 January 2011. The Fiscal Times. 7 October 2012 . Montana State Government. "Employee Definitions." November 2009. State Human Resources Division, Department of Administration. 7 October 2012 . Nash, Betty Josh and Jessie Romero. "Flexible Workforce: The role of temporary employment in recession and recovery." Region Focus (2011): 21-38. Nash, Betty Joyce. "How Temping Grew." Region Focus (2011): 23. U.S. Department of Labor. "Temporary Employees." n.d. 7 October 2012 . Villarreal, P. and P. Swanson. "Temporary Employment: The New Permanent?" 10 October 2011. National Center for Policy Analysis. 7 October 2012 . Read More