Over a roughly 15-year span from about 2005-2020, the temporary staffing industry underwent a metamorphosis. Once regarded primarily as suppliers of day labor, top temp agencies evolved into full-fledged partners of the clients they served, offering their services as long-term solutions rather than stop-gap fixes.
Now, the COVID-19 pandemic has marked another stage in the staffing industry’s maturity, with agencies stepping up to address their clients’ growing and complex needs amid widespread staffing shortages and new regulations regarding worker protections.
Again, partnership has been a key component of the industry’s evolution — this time with insurers taking the long view in their role as trusted advisers. While staffing firms work with employers and employees on achieving long- as well as short-term goals, insurers work with the staffing firms to address their big-picture needs with services that go well beyond writing coverage.
David Armendariz, the general manager of Atlanta-based Lucas Group’s Technology division, embraces the big-picture approach — one reason Forbes named his agency one of America’s best temporary staffing firms of 2020. Lucas Group, Armendariz says, doesn’t merely fill clients’ job vacancies with qualified workers; it takes the extra steps to ensure both employer and employee succeed.
“How to make a hiring decision when you can’t shake a person’s hand is something that we’ve talked to a number of our clients about,” Armendariz told Forbes, describing Lucas Group’s approach to hiring during pandemic. “On the candidate side, it’s the same thing. People are having to make career choices without being able to see the inside of an office, so we’re helping our clients create communication, virtual environments and ways to see the culture of a company.”
For the best insurers of temporary staffing firms, the big picture includes analyzing not only their clients’ and prospective clients’ risks, loss history, assets and objectives but also the relevant records of the organizations those clients and prospects serve. Sometimes, that means telling a client, “No.”
Before one Alera Group staffing client contracted with a large employer in Illinois, for example, we discovered that the employer average 150 to 200 Workers’ Compensation Insurance claims per year. Partnering with that employer, we informed the agency, would present undue risk not only to the workers it placed but also to the agency itself. The client followed our advice.
“We wanted that contract,” one of the staffing agencies later said. “But saying no prevented injuries to workers we place and probably saved us a million dollars.”
Changing Regulatory Landscape
New legislation in the state of Washington underscores the importance of Workers’ Compensation Insurance and another coverage every temporary staffing agency should have, Employment Practices Liability Insurance (EPLI), and it indicates a possible trend in worker safety protections.
Effective July 25, 2021, the new law (SHB 1206) requires staffing agencies to “inquire about the worksite employer’s safety and health practices and hazards at the actual workplace where the employee will be working to assess the safety conditions, workers’ tasks, and the worksite employer’s safety program.” The assessment must be performed before the start of the placement contract.
As reported by JD Supra, the Washington law “provides the staffing agency and the temporary worker the statutory right to refuse a new job task when it has not been reviewed or the employee has not had appropriate training to do the new task.”
Earlier this year, Washington also strengthened protections for all employees — including temps — who complain about workplace safety violations. “Employers and staffing agencies are prohibited from retaliating against an employee who reports safety concerns,” JD Supra says.
Other legislation affecting temporary staffing, including at the federal level, may be on the way. Hospice News recently reported:
“A bill recently introduced in the U.S. House of Representatives would grant federal funds to home-based providers for the recruitment, retention and advancement of direct care workers, including hospices. The bill could be an important vehicle for policy change at a federal level in support of a growing need for these workers in hospice.”
Knowledgeable, diligent insurers will be up to date on such legislation and advise their clients of the potential ramifications.
The Business of Relationships
As the country was in various stages of emerging from the COVID-19 pandemic in late spring and early summer of 2021, the number of job openings appeared to vastly exceed the number of people looking for work — a situation widely attributed to supplemental unemployment benefits provided by the federal government. But that may have been a misperception.
The New York Times recently reported on the employment picture in Greater St. Louis, where businesses are having a difficult time filling vacancies despite Missouri’s recent halt to federal unemployment benefits. The Times found a job market in which employers and prospective employees have vastly different concepts of what constitutes fair and attractive wages, benefits and working conditions.
Like Forbes, the Times spoke with a temporary staffing executive who regards big-picture partnership as integral to success. She advises her clients to take a similar view:
“Amy Barber Terschluse, the owner of three Express [Employment Professionals] franchises in St. Louis, handles mostly manufacturing, distribution and administrative jobs. Wages, hours and a short commute are what matter most to job seekers, she said, and few would work for less than $14 an hour.
“Ms. Terschluse said she had also had to educate employers, who have gotten used to low wages and the ability to dictate schedules and other conditions.
“Some employers, she said, have also gotten into ‘a vicious cycle of replace, replace, replace.’”
The temporary staffing agencies who emerge from the pandemic as success stories will be the ones who provide their employer clients with good people and place their employee clients in jobs with good working conditions and long-term employment opportunities. Most likely, they’ll also be the ones who partner with an insurance agent or broker who knows their industry, knows their particular business and takes an active role in managing risk, at least in part by assessing their relationships with clients and prospects.
Better Absence Management Through Employee Engagement
Whether you’re an employer in temporary staffing or any other industry, you know that managing employee time off has never been more challenging. The keys to successful absence management are engagement and communication.
Join Alera Group on July 15 for a timely webinar on employee engagement and absence management. You’ll learn how to keep employees aware and engaged, and ensure your organization’s policies align with your long-term business goals. To register, click on the link below.
About the Author
Managing Director, Staffing Practice
GCG, An Alera Group Company
Tony Spina is Managing Director, Staffing Practice, at GCG, An Alera Group Company. He works to ensure the profitability of his clients through risk management programs designed to meet their specific needs, striving every day to build and maintain relationships that lead to true partnerships with his clients. With more than 10 years’ experience in the insurance industry, Tony has developed areas of specialty in temporary staffing, home healthcare and durable medical equipment (DME).