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Temp agencies need to be reigned in and reformed

  • Last Updated:
  • Jul 14th, 2012 2:37 pm
[OP]
Deal Guru
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Dec 7, 2009
13841 posts
1337 upvotes

Temp agencies need to be reigned in and reformed

Let's talk about temp agencies.

I was chatting with a buddy of mine last night over a couple of beers, and he was telling me that he's been a temp at his company for 8 months. He told me that some of his co-workers have been temps going on 2yrs! I was taken aback. At what point does the word, "temp" become meaningless?

We need clear definitions of what this industry's role is in Canada. There needs to be time limits set on how long the relationship between agency and employee persists before a company decides to piss or get off the pot. The company in question is very successful, and is quite generous with bonuses to their management staff, so it's not an issue of them needing the money more than the employees working on the floor.

My buddy told me his morale is pretty much zilch, and there is almost no incentive for him to go above and beyond his job description, aside from getting fired - but because this company has retention issues with floor workers, it's doubtful that would happen.

I have a few ideas...

- Put a 6 month expiry date on non-compete contracts between employees and temp agencies. Employees should be able to openly negotiate full-time employment after that date without worrying about their job.

- Clearly define the service being offered by the temp agency and scrutinize the terms. If they are recruiting and interviewing, then they should do that. If they are filling a hole in short-term labour, then they should do that. I recognize the value in the services they offer, but acting as middle-man, in order to exploit loopholes to deny employees benefits, raises and job security is not a viable industry in a 1st world country, or any country for that matter.

- Agencies should be paid a flat fee, and not leech off the backs of the workers. The goal should be to facilitate relationships between employees and employers, not to form and endless parasitic relationship wedged between two parties.

I'm open to further suggestions.
In a perfect system, corporations would fear the government and the government would fear the people. - David Wong

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11 replies
Deal Addict
Feb 5, 2010
2764 posts
178 upvotes
I can lecture you for hours on this topic. But typing it out is alot of work.
[OP]
Deal Guru
User avatar
Dec 7, 2009
13841 posts
1337 upvotes
I'm always open to new ideas. Give me the quick n' dirty version and we'll go from there.

Or I could pay you for all that hard work, but I'd have to hire a 3rd party to make sure you don't overcharge and I won't have to continue paying you once the work is done. :razz:
In a perfect system, corporations would fear the government and the government would fear the people. - David Wong

Check out caRpetbomBer's picks in this thread.
Deal Addict
Apr 7, 2011
1826 posts
385 upvotes
Don't dump on the agencies, the culprit is the company.

Companies like agencies because they create a buffer between the firm and the worker. That buffer allows them to lay off with out severance and gives them a relationship that doesn't meet the employer/employee meaning for tax and HR law purposes.

Most of the time the company and agency will negotiate that no fee needs to be paid to bring someone on permanently after some point - one year or six months is typical.
Member
Dec 9, 2007
229 posts
28 upvotes
Syne wrote: Let's talk about temp agencies.

I was chatting with a buddy of mine last night over a couple of beers, and he was telling me that he's been a temp at his company for 8 months. He told me that some of his co-workers have been temps going on 2yrs! I was taken aback. At what point does the word, "temp" become meaningless?

We need clear definitions of what this industry's role is in Canada. There needs to be time limits set on how long the relationship between agency and employee persists before a company decides to piss or get off the pot. The company in question is very successful, and is quite generous with bonuses to their management staff, so it's not an issue of them needing the money more than the employees working on the floor.

My buddy told me his morale is pretty much zilch, and there is almost no incentive for him to go above and beyond his job description, aside from getting fired - but because this company has retention issues with floor workers, it's doubtful that would happen.

I have a few ideas...

- Put a 6 month expiry date on non-compete contracts between employees and temp agencies. Employees should be able to openly negotiate full-time employment after that date without worrying about their job.

- Clearly define the service being offered by the temp agency and scrutinize the terms. If they are recruiting and interviewing, then they should do that. If they are filling a hole in short-term labour, then they should do that. I recognize the value in the services they offer, but acting as middle-man, in order to exploit loopholes to deny employees benefits, raises and job security is not a viable industry in a 1st world country, or any country for that matter.

- Agencies should be paid a flat fee, and not leech off the backs of the workers. The goal should be to facilitate relationships between employees and employers, not to form and endless parasitic relationship wedged between two parties.

I'm open to further suggestions.
You misunderstand the situation; the company does not want your friend as a full time employee, they are willing to pay a temp agency continuously just to have the privilege of being able to let him go easily if the situation calls for it and not to have to pay the benefits they would have to for a regular full time employee. If your friend's skills are valuable and he was truly hard to replace he would most likely be head hunted for a flat fee as you described. If the company wanted him as a full time employee there is most likely a buy out clause that would be far cheaper than what they'd pay anyway to keep him a temp for another year.

Before you blame the company, understand the company exists to be as successful as possible, not to provide your friend a well paying job.
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May 3, 2009
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Abel4Life wrote: I can lecture you for hours on this topic. But typing it out is alot of work.
Thats were Siri comes in handy...
Deal Fanatic
Sep 23, 2007
5061 posts
1150 upvotes
My company is forced to use temps because of a company wide hiring freeze. It's not a complete freeze...if you want to hire someone permanent, you could. It's just that you have to get a bunch of signatures and HR will sit on it for a few months. Meanwhile all that work needs to be done by someone...with no real prospect of hiring a permanent staff, we hire temps and sometimes it takes 3-6 months to hire someone full time.

I can agree that some temp agencies have lame practices but the culprit is NOT the temp agencies. It's a combination of the company and also the labour laws in Canada. Sure, they protect the workers well. But on the flip side, hiring the wrong person has never been more costly. When you hire temps, the cost of hiring mistakes is greatly diminished. Companies may often find temps cheaper, but after seeing the bills, I don't think there's significant difference.

I often compare job searching to dating. How would you feel if there's a law to set a time limit or the number of times you can meet a person before deciding to get married? Temp agencies give companies a chance to maintain "casual" relationships while looking for the right person. I don't think it's wrong. I think the job market is not in the candidate's favor to begin with. With or without temp agencies, you'd feel like crap being unemployed.
Sr. Member
Apr 13, 2007
509 posts
55 upvotes
BananaHunter wrote: I often compare job searching to dating. How would you feel if there's a law to set a time limit or the number of times you can meet a person before deciding to get married? Temp agencies give companies a chance to maintain "casual" relationships while looking for the right person.
A brothel is a pretty good analogy for a temp agency.
[OP]
Deal Guru
User avatar
Dec 7, 2009
13841 posts
1337 upvotes
Ryougo wrote: You misunderstand the situation; the company does not want your friend as a full time employee, they are willing to pay a temp agency continuously just to have the privilege of being able to let him go easily if the situation calls for it and not to have to pay the benefits they would have to for a regular full time employee. If your friend's skills are valuable and he was truly hard to replace he would most likely be head hunted for a flat fee as you described. If the company wanted him as a full time employee there is most likely a buy out clause that would be far cheaper than what they'd pay anyway to keep him a temp for another year.

Before you blame the company, understand the company exists to be as successful as possible, not to provide your friend a well paying job.
If they didn't want him, why string him along for 8 months? The culprit is the temp agencies simply because they exist to profit by creating a buffer between employer and employee. The world would be a better place if they didn't exist. Looking around this forum is sad, because the majority always support the status quo, no matter what it is. ALWAYS, no matter the issue! All of the injustices in the world can be justified and explained away, and it's never anything to get upset about. Reform is never necessary. The usual suspects side with whoever is in power, regardless of the circumstances, which when you think about it, explains German nationalism in WWII.

To use the relationship analogy, would you string someone along for years at a time without committing to them? Is that fair to them?
In a perfect system, corporations would fear the government and the government would fear the people. - David Wong

Check out caRpetbomBer's picks in this thread.
Deal Addict
Oct 14, 2004
1443 posts
413 upvotes
Toronto
Syne wrote: If they didn't want him, why string him along for 8 months? The culprit is the temp agencies simply because they exist to profit by creating a buffer between employer and employee. The world would be a better place if they didn't exist. Looking around this forum is sad, because the majority always support the status quo, no matter what it is. ALWAYS, no matter the issue! All of the injustices in the world can be justified and explained away, and it's never anything to get upset about. Reform is never necessary. The usual suspects side with whoever is in power, regardless of the circumstances, which when you think about it, explains German nationalism in WWII.

To use the relationship analogy, would you string someone along for years at a time without committing to them? Is that fair to them?
Sorry, but how are they stringing him along? Are they promising him a full time job if he sticks around? A temp agency needs to fill placements. If your friend continues to stay, then the temp agency is ok with that. They keep getting paid their portion, and as long as he is performing, then they are happy. Your friend must also be somewhat satisfied if he continues to work there. He could just as easily leave and go somewhere else if he is not happy. The temp agency will then just find someone else. The gov't/CRA won't care as long as all of the proper taxes are being paid.

Edit: Also, don't forget...the agency did provide him with a job. Obviously he was happy to take it in the first place...so it couldn't have been all bad.
Member
Dec 9, 2007
229 posts
28 upvotes
Syne wrote: If they didn't want him, why string him along for 8 months? The culprit is the temp agencies simply because they exist to profit by creating a buffer between employer and employee. The world would be a better place if they didn't exist. Looking around this forum is sad, because the majority always support the status quo, no matter what it is. ALWAYS, no matter the issue! All of the injustices in the world can be justified and explained away, and it's never anything to get upset about. Reform is never necessary. The usual suspects side with whoever is in power, regardless of the circumstances, which when you think about it, explains German nationalism in WWII.

To use the relationship analogy, would you string someone along for years at a time without committing to them? Is that fair to them?
They want him as a temporary employee, just like some people want casual relationships. Like a relationship maybe they're literally misleading your friend saying if he stays there x amount of months they'll hire him full time, if that's the case he can quit if he's feeling mislead. You keep saying soandso is evil because they exist to make a profit. Guess what, your friend works to make a profit, if he could make more doing the exact same job he would probably leave immediately.
Deal Addict
Feb 5, 2010
2764 posts
178 upvotes
Syne wrote: If they didn't want him, why string him along for 8 months? The culprit is the temp agencies simply because they exist to profit by creating a buffer between employer and employee. The world would be a better place if they didn't exist. Looking around this forum is sad, because the majority always support the status quo, no matter what it is. ALWAYS, no matter the issue! All of the injustices in the world can be justified and explained away, and it's never anything to get upset about. Reform is never necessary. The usual suspects side with whoever is in power, regardless of the circumstances, which when you think about it, explains German nationalism in WWII.

To use the relationship analogy, would you string someone along for years at a time without committing to them? Is that fair to them?
Agencies/Vendors exist for some of these reasons:

1. Incur the liability for the employee they are providing (responsible for payroll, on-boarding, visas, benefits if any, and the legal HR paperwork)
2. Assist with filling roles that may be specialized (IT) or even quick-fills or back-fills
3. Reduce the cost of hire / paperwork / terminations as the agency does background checks/reference checks etc.
4. The vendor/agency simply invoices the client whom pays the bill through expense payable (easy for the client to handle).

So in summary, many clients are using these companies as a paid service to them. They don't want to add people directly to their payroll and have their internal HR/Payroll deal with all that so they can focus on more strategic HR functions.

This is why whenever people believe (many people on this forum do or are misled) that they can just go around an agency and apply to the company directly it is just not the case unless its a posted full-time/part-time position of course (exceptions exist). Some companies even outsource the entire recruitment function to the agencies so applying directly won't get to anywhere. IBM for example has a few primary vendors that they take contractors from for consulting projects which are not posted on their website.

As I mentioned earlier I can go on and on with real-life examples as I am connected to the industry in a way. Hopefully this helps. I do agree at times there could be people taken advantage of and some crooked business but its not any different then the financial industry, consulting, sales, lawyers, real estate industry etc.

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