THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Sunday, October 16, 1994 TAG: 9410150262
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY LON WAGNER, STAFF WRITER
LENGTH: Long : 186 lines
Colonna's Shipyard survived its first 110 years in business without temporary workers.
Sometimes, when things got busy, the Norfolk shipyard had to hire more workers, then lay them off when business died down. If Colonna's couldn't find enough workers, it had to turn away a job.
During the past 10 years, a solution to the ebb and flow of ship repair has emerged: temporary-help services.
Shipyards have learned what other businesses discovered long ago: Hiring ``temps'' can be less expensive than full-time employees and provides low-budget flexibility. Employers can quietly build up and shave their work force, all without the public relations mess of announcing layoffs.
The increasing reliance on temporary workers has raised some cutting questions not easily answered. Are temps as efficient, skilled and reliable as full-timers? And are there enough of them?
At Hampton Roads shipyards and other businesses, the debate rages.
``In the past you would write and say, `This is terrible, because these are not good jobs,' but now it's not clear,'' says Donald Ratajczak, director of the economic forecasting center at Georgia State University. ``You can't say it's good or bad, you just have to say it's different.''
The shaky business climate has helped temporary services proliferate. About 20 percent of new jobs created in the country are filled with temporary workers, Ratajczak says.
The overall percentage of temps is much less, but growing.
People employed through the services now make up between 1.4 percent and 3 percent of the work force, depending upon which expert is doing the calculating. The National Association of Temporary Services says 1.9 million people are working through temporary-help services every day.
In Hampton Roads, temporary help seems to be the perfect solution to fluctuations of the ship repair business, and uncertainty about the future of the economy has sent many other companies scurrying to the temp services. Companies figure that if they are unsure of how long an upswing in business will continue, they would be better off to plug job openings with someone else's workers until they are sure the demand is permanent.
``The peaks and valleys in this business demand that you be able to say, `I need 10 more guys today, and next week I won't need them anymore,' '' says Ken Imondi, production manager at Colonna's.
A volatile economy has helped ignite the temp boom nationally.
Time magazine, in an article that has becomea war cry for both temporary services and their critics, estimated last year that the country's contingent work force now numbers 35 million.
The article said that Manpower Inc., a nationally franchised temporary service, had become the nation's largest private employer. Time's figure of 600,000 people on Manpower's payroll is disputed by the industry. That number counts all the people who worked for Manpower throughout the year, but on any given day Manpower still sends between 80,000 and 120,000 people to work.
In the article, headlined ``The Temping of America,'' Time suggested the rapid growth in non-full-time workers meant that by the end of the decade contingent workers would outnumber full-time workers.
But the Time article lumped all non-full-time workers together: the nearly 2 million temporary service workers, and 34 million part-timers, free-lancers, consultants and contractual workers.
``That Time magazine piece was probably the most erroneous, misleading, biased piece of journalism that I have ever seen,'' says Bruce Steinberg, spokesman for the temp services association.
Some legitimate workers' rights questions have arisen along with the growth of temporary services. Even by the temp services association's count, only 4 percent of temporary service workers have received life insurance, and only 3 percent have ever received sick pay. Just 8 percent get health care benefits.
``Probably out of the president's health care proposal, the only thing I had any sympathy for was a portable package of benefits,'' says Tom Godfrey, president of Colonna's Shipyard. ``That way (temporary workers) could carry (benefits) with them from job to job.'' TEMP WORKERS' RIGHTS?
Temporary services place their employees in the unusual gray area of having to please two bosses at once: the temporary service that sent them out, and the company giving them the work.
If a dispute over productivity, performance or tardiness arises, a temporary worker may find himself or herself without a defender. In fact, that's one of the things businesses like about temporary workers: If they don't like the way employees are performing, they send them home and ask for somebody else.
``If the temporary service argues with the company, they can just say, `Screw you, temporary service, I'm going to somebody else,' '' says a Virginia Beach man who has worked for several area temporary services.
The man, who asked that his name not be used because he didn't want to be labeled a troublemaker by the temp services, is also concerned that the services don't do thorough background checks on their workers.
To check his theory, the temporary worker said, he has put false references on his applications at several services. They were apparently not checked, he said, because he was sent out on a job the next day.
The services say they check out the workers as best they can. If they send a problem worker out to a client, it may mean that employer will go to a different temporary service the next time.
John Farris, owner of Omnibus temporary services, said his service normally does background checks, including police records, and will do drug screenings for military contracting jobs.
``It is incumbent upon us as the employer to make sure the person has the experience to do the work,'' Farris said. ``Probably, the newer the company, the less likely they are to have a long-term pool they've checked out.''
As the temporary services continue to increase their stake in the overall work force, their owners know they will have to provide more benefits to their workers. Godfrey, at Colonna's Shipyard, knows one of the biggest slaps at the temporary services is that their workers get less money to do the same work as full-time workers.
``I'll be honest,'' Godfrey said. ``I think there are companies who have used this contractual vehicle simply to avoid paying union wages.''
Andy Hulcher, founder of Happy Hour Personnel, said he offers benefits to his workers - but they have to pay the full cost.
Hulcher said he thinks health insurance for temporary workers will eventually become mandated. A lot of people working for the services are between jobs and have no benefits.
``It is something that is really going to make or break this industry,'' Hulcher said. ENOUGH WORKERS TO FILL THE GAP?
Whenever the labor force or business conditions change directions, temporary services seem to come up with a way to fill the gap. The latest example of the amoebalike existence of the services is something called temp-to-perm, or temp-to-hire.
The services basically provide a worker to a company that thinks it might want to add to its permanent payroll. If the person proves himself or herself, the company can buy out the worker's contract with the temporary service. That gives the worker and the company a noncommittal way to check each other out.
One of those folks is Barry Irvin, a 36-year-old Chesapeake resident. He is one of Colonna's temporary workers who rises and falls with the ship repair business.
Colonna's has hired Irvin three times - and let him go twice. Frankly, Imondi says, he'd like to permanently hire Irvin if the workload continues.
Irvin is a first-class shipfitter who makes $11 an hour on his temporary assignment. He's also a skilled welder.
``I've worked for a lot of temporary services,'' Irvin said. ``A lot of places right now don't want to hire full-time people, that way you don't have the overhead, the benefits.
``That way, when the work runs out. . . . `See you later,' '' he said. ``But it's better than being unemployed.''
Happy Hour's Hulcher said ``the real chill'' in the temporary service industry these days is that good workers like Irvin are rare.
Happy Hour, which provides workers to hotels, restaurants and caterers for big events, just raised its pay rates 20 percent to help it recruit more workers.
``Right now you have a lot of people nipping at this niche,'' Hulcher said. ``When I first started this, we were a luxury for the hotels; now it's a necessity, and we're having a hard time finding people.''
What may also ultimately slow the growth in the temporary services is what created them: the nature of the labor force.
Sometimes shipyards, even when dealing with two or three temporary services, can't find as many workers as they need to complete a job that has come in at the last minute.
In some cases, a long-term improvement in the economy could also throttle the temporary services. Godfrey said it would be cheaper for Colonna's to hire full-time workers than temporary workers. But Colonna's has found it only has enough year-round work for 300 full-time employees. When it gets busy, the shipyard will hire another 60 to 70 temporary workers.
Management experts think this is the future composition of U.S. industry: a core of full-time workers and a supplemental temporary work force that contracts and expands with business.
``Generally, the temporary workers are less efficient than permanent workers,'' Godfrey said. ``The cost savings is you don't retain them, you dismiss them when you don't have the work. It sounds pretty crude, but that's the reality of it.'' ILLUSTRATION: Color photo
MOTOYA NAKAMURA/Staff
Temporary workers such as William Thompson, left, help Colonna's
Shipyard handle the ebb and flow of the ship repair business. The
Norfolk yard can support about 300 full-time employees year-round;
during busy periods, it hires 60 to 70 temps.
Graphic
STAFF
TEMPORARY WORKERS
SOURCE: National Association of Temporary Workers
[For complete graphic, please see microfilm]
Photo
MOTOYA NAKAMURA
Barry Irvin, left, temporary worker at Colonna's Shipyard
by CNB