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Canada's Federal Government and the Temp Industry

There was yet another article in the local paper today taking a run at the temporary help industry ... and once again it is to do with the Federal Government. Let's look at some realities:

What do these agencies do:

They supply qualified labour in a "just in time" environment at extremely competitive prices.

In order to do this the agencies manage literally thousands of applicants ... they screen, interview, test and comply with all federal and provincial employment rules. They respond to RFPs, provide security checks, and report back into the government on a regular basis creating EVEN more mountains of paperwork.

Government managers could not "get stuff done" if they did not have access to this flexible workforce capable of stepping in at a moments notice to cover off absences, take on projects or just help cope with peaks in workload.

Let's examine some of the "Knocks" against this industry:

1. Profits ... some people suggest that the staffing industry charge HUGE markups on the cost of an individual. It is funny how the facts so easily elude people who talk about this:

(a) The HUGE markups include all of the federally and provincially mandated deductions that include income taxes, CPP, EI and workers comp.
(b) Tacked somewhere in the markup is a piece to cover off the costs of the agency operations and its staff, in addition to financing the payroll for the temps until the government pay their invoices.
(c) After all of those direct costs Statistics Canada numbers suggest that the staffing industry profits are in the 3 to 5 % range ... hardly excessive.

2. Temps are an expensive solution for the Federal Government.

An "apples to apples" comparison would suggest that temps are actually a very cost effective solution when you consider the costs of training, pensions (indexed), benefits, various options for leave (paid maternity leave, stress leaves etc), and the management time required to manage an employee's career etc.

3. The Government should have their own in-house agency to save money.

The government does a lot of things well, and a number of things not so well. Here are just three reasons why the government doing it themselves would not be a good option.

(a) Speed. The government is not known to operate fast, and that is a critical factor in the temporary help industry. When a client needs help they need it now, not "in a while".
(b) Cost. It would be my contention that to get enough government workers to operate an internal agency they would far exceed the costs of the existing agency staff. It is a very fast paced, high volume environment and I'm not convinced that a unionized, government-manned operation could do it ... and certainly not in a cost effective manner.
(c) Bureaucracy. The temporary business is paper bound today, complying with all of the various levels of government regulations. Imagine how much more bureaucracy would be associated with an internal government operation. Look at the Public Service Commission who are trying to deal with a rising tide of retiring employees and have a great deal of trouble just keeping up!

4. The temporary workers are cheated out of getting government jobs.

An interesting perspective but totally wrong. Many, many temps go on to find full time employment in the Federal government having got their start through an agency. There are those who don't get a full time job but would like one ... there could be a lot of reasons for that:

(a) There might not be a long term position available;
(b) The temp might not have the right qualifications (even though they are doing the job ... whole other story);
(c) The government manager might not WANT the person as a full time employee.
(d) There might be an ongoing "competition" through the government process that the temp is not eligible to partake in.

Individual concerns about not being hired usually have very good reasons. We know that the government hire lots of temp employees into their full time ranks. A staffing industry survey suggests that 80% of temps use "temping" as a bridge to something else, a new career, a new job, a new employer, etc.; about 20% of temps CHOOSE it because it fits their lifestyle, they don't want a "regular" job.

5. The use of temps is a means of getting around the government process.

(a) If the government was my business I would have to ask myself whether there is something wrong with the process!!!!
(b) Government managers need to get things done ... so operating within their guidelines they get people where they can. Perhaps the government should talk to their managers and ask how they can make things better.

Canada, like every industrialized nation will be faced with growing skills and labour shortages as we emerge from this recession. Government should be looking at new and innovative ways to attract, hire and retain people through right now, not finding ever more creative ways to hurt an industry that brings so much value.