Staffing on the rise, hot start for Browns and background check reform in this edition of Tim's Talkin

STAFFING INDUSTRY GROWING JOBS...DOING ITS PART!

Despite the recent dismal August jobs report nationally that produced a net zero for new jobs, staffing employment rose 5.4% in the second quarter fm the first quarter and 8.6% from the second quarter last year. According to the American Staffing Association this is the six straight quarter of temporary and contract growth since industry began its recovery from the recession in 2009. This has amounted to 200,000 new jobs in the past twelve months.

ANOTHER HIRING OBSTACLE TO WORRY ABOUT

Do you have to hire an applicant in drug treatment on methadone? According to the EEOC you cannot automatically rule out hiring a person that tests positive for methadone which is a medication prescribed in drug treatment programs for recovering opiate addicts.

Under the American with Disabilities Act (ADA)" recovering addictions" are considered disabilities. United Insurance Company of America is finding this out the hard way as did Hussey Copper in Leetsdala, PA which paid out $85,000 to settle a similar case before hiring the addict to a mason utility laborer position.

Makes you wonder what the EEOC would do in hiring to fill a position within its ranks with a recovery addict? My guess is that they are exempt!

BIG SEASON AHEAD FOR THE BROWNS!

According to the experts that participated in our survey of how the Browns season will go it will be a very good year on the shores of Lake Erie. Our pundits have the orange and brown finishing the season at 10-5-1 but not doing well within the tough AFC North. Optimism always runs wild on the Browns this time of year.

And congrats goes out to Eric Spradling of Power Direct Energy for his participation in the survey. He will be going to the Browns-Miami game on September 25th as last month's winner of a Browns prize package.

BACKGROUND CHECKING REFORM PICKS UP STEAM

We have reported in this column recently about meetings conducted by the EEOC concerning the use of criminal background checks in the hiring process.

Well, according to recent reports the EEOC is definitely leaning towards revising their 20 year old background check guidelines. Frustrations over inaccurate and incomplete background checks have gotten them to this point.

In short, the view of the EEOC is that criminal background checks should not come in to play in the pre-employment.

10 Mistakes Users of Temporary Staffing Make

While the premise of giving the customer what they want certainly applies to all of us in the very competitive staffing industry sometime you have to take a step back and make sure you're truly getting the most bang for your buck.

Now I know some of you are saying to yourselves why would I believe every sales pitch thrown at me by the greedy commission based sales rep that my staffing supplier throws at me. After all, are they not in to make the most money they can? Perhaps, but if you trust your supplier to be looking at your best interests first (like we do at Ryan Staffing)  you may want to give this list some consideration. So here we go...

1. PICKING THE SUPPLIER WITH THE LOWEST RATE

                  This usually means the supplier with the lowest pay rate as well and as we all know you get what you pay for these days. The "savings" you gain is more than eaten away by quality issues such as turnover, absenteeism , training and skill level.

2. TREATING TEMPS MORE LIKE A COMMODITY THAN A VALUABLE EMPLOYEE

                  In some organizations temps are viewed as a necessary evil rather that a valuable asset, one that can be easily replaced. Those that get the most out of the labor being purchased treat temps pretty much like they treat their own employees realizing that a happy worker is a productive worker.

3. NOT TAKING THE TIME TO "KNOW" YOUR SUPPLIER

                  Much like you would not buy a new car without kicking the tires or taking a test drive companies will select a staffing service without really performing due diligence on the suppliers ability to service their needs. Knowing how your service recruits employees, guarantees its result, manages its finances, protects its reputation etc. are too often ignored .

4. GIVING THE KEYS TO THE OFFICE/SHOPTO  THE TEMP

                  It might be hard to believe but over the years we have seen temps elevated in to positions of authority ahead of permanent staff that involved giving access to confidential information, negotiable financial instruments and supervision. Much like we don't pick up hitchhikers or let strangers in to our homes after dark why would you give so much to someone you know so little?

5. ENDING TEMP ASSIGNMENT FOR ALL THE WRONG REASONS.

                  This goes back to the commodity issue which temps are not...they are employees with rights that are shared through co-employment laws involving both the client and the supplier. Ending temps after they get hurt on the job or make a complaint about being harassed because you think you have no dog in the fight is the wrong approach and can/has been costly to both the client and the supplier.

6. THINKING THE TEMP ARRIVES AS A FINISHED PRODUCT THAT REQUIRES NO TRAINING

                  It is not realistic to think that any new employee temp or other can show up to that first day at work and know how everything is done. Hopefully a temp shows up full of potential, with a good attitude and the basic physical skills to perform. It is up to you to maximize all this good that comes through the door by providing the training and motivation to achieve your expectations.

7. LACK OF COMMUNICATION WITH YOUR SUPPLIER

                  Starting with the initial job order providing your supplier with enough detail so that they can perform up to your expectations is sometimes lacking between the parties. Think about buying a new car and all the specs you give the dealer before you purchase. Your staffing supplier needs the same support from you in the form of a job description to make certain you get a great fit. Communicating injuries, incidents, hours and performance issues are other examples of the need for dialogue.

8. THINKING SIZE MATTERS

                  Locally owned and operated independent suppliers of staffing services often times have all the capabilities and more to fill your needs than the big boys. We might not have all the pretty bells and whistles of the national suppliers but we do have a vested interest in your needs and the flexibility to perform customized solutions without all the levels of bureaucracy in the way. Think about this. Over the years Ryan Staffing has had several "national" suppliers contact us to partner with them to service clients they could not. The shoe has never been on the other foot...funny huh?

9. BEING REALISTIC

                  Let's face the facts....you can't buy a Rolex for $50 right? So why would you think a staffing company can provide a temp with 20 years of CNC experience and pay him/her $9.25 per hour with no chance for permanent hire?  In some regards it boils down to two things. Some jobs are not meant to be temp jobs. And, you get what you pay for in this business.

10. THINKING TEMP SUPPLIERS ARE LIKE FAST FOOD RESTAURANTS

                  It is no secret that you have a lot of choices out there when it comes to picking temp suppliers. While we all perform the same basic service some of us like to think we do it better than others. The reason is that while we are all the same we are different...if that makes sense. We all provide the burger and the bun but some of us know you don't want pickles without asking....if that makes sense. What it all boils down to is having a comfort zone and seeing value in maintaining long ter

TIP OF THE MONTH: TRY AS YOU MIGHT, YOU CAN'T IGNORE COST

In most any service business, the one that charges the most will almost always try to justify their existence by pushing value. In our business this usually includes such things as saying they supply better temps or that they guarantee no turnover or that their temps have benefits. It's most always fluff. The truth is, we all draw from the same labor pool, temps almost never qualify for the benefits and they are not always the most reliable bunch by nature.

This being said, the bottom line is that the staffing industry is built around saving you money. We do this by accepting many of the insurance risks for you, by providing "on-time" contingent labor built around your work schedule, and by reducing your hiring costs. One report has shown that 80% of all temp users do so because of variable or unpredictable workloads.

Consider this, a recent Staffing Industry Analysts survey indicated that a third of contingent labor buyers said that their expenses would increase 25% if they did not use temps. The same survey cites buyers claims of cutting labor costs by 10 percent, 20 percent or more by using contingent labor. Imagine the impact on your business if your hourly labor cost went from $20/hour to $25/hour overnight?

According to Alexi Zelenev in research done for the Federal Reserve Bank of Chicago, it's about flexibility. Flexible temporary labor smoothes out unpredictable demand. "The presence of temporary help services in a region reduces job search costs and informational asymmetries by helping to match the workers who are looking for a temporary work opportunity with the firms that need the temporary help" according to Zelenev. Survey participants said that "unpredictable workload levels" encouraged them to use contingent labor which produced a 44% savings over those that said flexibility was not a factor. Rapid growth and difficulty finding qualified applicants were the two most common factors after flexibility cited by buyers for using contingent labor at 68% and 51% respectively.

A Staffing Industry Analyst survey taken in 2004 found that the attitude of buyers toward using contingent labor was that 31% of the organizations participating discouraged its use and only 10% encouraged its use. The same question asked in 2010 produced almost the exact opposite with 30% encouraging the use of contingent labor and 18% discouraging its use.

The bottom line to be learned out of all this is that the staffing industry was created to lower your cost of labor....and it does. How you maximize its potential will determine how much of a savings your organization will receive.

Tim's Talking About Criminal Records in Background Checks, the Australian Sex Injury and IRS vs. Independent Contractors

CHANGES IN BACKGROUND CHECKING POLICIES INEVITABLE

Awhile back, we told you about an upcoming EEOC hearing on the use of conviction records in the hiring process. About 250-300 people attended including many interested third party organizations. While statistical data was missing for the most part, the tone of the meeting has been reported to support the position that criminal checks have become a barrier to employment.

It seems certain that existing EEOC guidelines on the subject are sure to be revisited with an emphasis put on responsible use of criminal checking. This means employers giving more attention to the nature of the job, seriousness of the crime and length of time since it occurred in using criminal checks in hiring decisions.

For those that want first hand information, a webcast of the meeting can be found by clicking here. Along similar lines the city of San Francisco is seeking legislation that would prohibit employers from asking criminal history related questions as part of the hiring process. They cite an unemployment rate of 25-30% for ex-cons as the rationale." Ban The Box" laws are on the rise throughout the country.

BE CAREFUL WHO YOU WORK WITH ON STAFFING!

A jury recently convicted the owners of Commonwealth Temporary Services Inc. of Westport Massachusetts of paying more than $25 million in wages under the table to temps between 2000 and 2004.

It would appear that the IRS frowns on this practice as well as the folks at Workers Compensation, Social Security and Medicare. They face up to 20 years each in the slammer and a $250,000 fine on the mail fraud charges alone.

In a related case another Massachusetts staffing firm owner was recently indicted on workers compensation fraud for underreporting the size and scope of his business to avoid paying $110,000 in premiums. This involved not reporting wages as well as misclassifying wages in to lower premium positions.

The possibility that the Feds could go after the users of these temp services for back tax payments and workers compensation premiums is a distinct possibility....so beware!

PROTECTED CONCERTED ACTIVITY AMONG TEMPS UPHELD

The First Circuit has upheld a ruling that the NLRA prohibits a staffing firm from preventing temporary employees from discussing their compensation with others. Enough said here.

THIS WOULD BE AN INTERESTING HEARING TO ATTEND

An Australian woman who was injured while having sex on a business trip is suing for workers compensation benefits. It seems she suffered multiple head injuries and psychiatric issues when a wall-mounted lamp over the bed fell on her during the deed

The victims argument is that she was required to travel as part of the job and stay overnight in the hotel room so she should be entitled to benefits....a "during the course of employment" argument. The woman's lawyer equates the injury to falling in the shower at the motel.

We could have more fun with this but we'll leave it go for now.

IRS CRACKING DOWN OF INDEPENDENT CONTRACTOR ABUSE

The federal government is predicting it will reap $7 billion in revenue over the next ten years by cracking down on employee misclassification of "independent contractors".

If you need more information on compliance issues on this subject we suggest that you Google "Darden Factors" and "Economic Realities-Independent Contractors" to read up on the subject.

Tim's Talkin' about Drug Tests with the Unemployed, Social Media Labor Issues and the E-Verify Program

ONE BIG TEMP ORDER!

As a result of the earthquake related troubles in Japan Toyota has announced that it will hire between 3000 and 4000 temporary workers. Also, Honda will hire about 1000.

Toyota suffered a nearly 75% loss in production following the quake.

DRUG TESTING AND UNEMPLOYMENT
You would think that with unemployment levels at such a high rate, finding qualified workers would be a breeze. The problem is more and more applicants are failing pre-employment drug tests. What make this more amazing is that most applicants in this job market know they will be drug tested and still can't pass.

According to the agency CSS Workforce NY, a study they performed involving southern tier New York State, somewhere between 30 to 50 percent of job applicants in that area could not pass a drug test.

We see this problem in the staffing industry as well. You combine the drug test issue along with the background check required by many companies and the employable pool of labor shrinks dramatically.

RETALIATION AND WORKERS COMPENSATION CLAIMS
We've discussed the ramifications before about terminating an employee or even ending the assignment of a temporary because they filed a worker's compensation claim.

One aspect of the statute became clearer recently when the Ohio Supreme Court ruled 4-3 that the protection of this law does not extend to employees who are terminated BEFORE they file, institute or pursue a claim.

I'm not sure what this ruling accomplishes for employers that don't violate this part of the law but if you do it promotes speedier termination.

BAN THE BOX PICKS UP STEAM
If you don't know what this movement is all about be aware. It is designed to eliminate the "box" on employment applications that inquires about an applicant's criminal history.

Checking the "have you ever been convicted of a felony" box often times eliminates otherwise qualified individuals from employment. This, many say, makes the problem of returning convicted criminals to society even more difficult by denying those that have paid their debt the opportunity to move forward.

A group called All of Us or None has mobilized to pass laws eliminating this practice and has some success in selected cities across the country and in the public sector. Those private sector companies that have government contracts are also in their sights. The belief here is that these type of questions immediately discriminate against individuals convicted of crimes that really have relevance to the job being applied to perform. In some ways they have a point. We are a people of giving second chances....it's the third, fourth, etc. that cause the problem.

E-VERIFY COMING TO A HUMAN RESOURCE DEPARTMENT NEAR YOU
The U.S. House Subcommittee on Immigration Policy and Enforcement is starting the process that would ultimately require all U.S. companies to use E-Verify before hiring any employee.
For those that don't know, E-Verify is the governments verification required primarily of those doing work for the government.

On the plus side by fully establishing an electronic system the current Form I-9 process would be eliminated. It would also protect employers using the system from prosecution for having an illegal slip through the hiring process.
On the down side, the law may require re-verification of existing employees within certain time limits.

SOCIAL MEDIA--PART TWO
We discussed the impact of social media and employees being protected via the concerted activity defense. A couple of more cases are making their way through NLRB complaint filings. One involved employees complaining about a company's handling of a sales event that offered customers hot dogs and bottled water. The implied violation here is that the company was being cheap and as a result it impacted on the earnings of sales people. This was a Facebook posting. The other was a termination of five employees that were alleged to have harassed a co-worker via Facebook as well as complaining about working conditions.

The bottom line is tread carefully before you take disciplinary action based on social media communications. Nothing is easy anymore!

BACKGROUND CHECKS AND THE EEOC
According to sources the EEOC will hold a meeting on July 26, 2011 to investigate the use of criminal background checks in the hiring process. The concern is that use of these records may create unfair barriers to those trying to re-enter the workplace.

TIP OF THE MONTH GIVE SMALL BUSINESS A CHANCE

 As more and more large companies shy away from using regional staffing services in favor of VMS operators I can't help but wonder why. The VMS (Vendor Management System) is one of centralized planning that sounds good on paper but at what expense? What it really comes down to is service. And do you really want someone hundreds of miles away, who don’t know you or your special requirements brokering your staffing needs?

Think about this. There is a reason that small regional staffing companies earn 81-85 percent of their business from companies with less than 1000 employees. And that number grows to 90% for those servicing industrial accounts. It all comes down to service. In the light industrial sector of the staffing business there is no such thing anymore as the standard order. It has become very specialized and the national services just are not as proficient in filling these orders as the smaller staffing firms.

So, before you place that next order with that large national supplier take our small business test in this month's RESOURCE and pause to think about where this country would be without small business. The numbers are truly staggering.

                                                      WHERE WOULD WE BE WITHOUT THEM?

Small business is defined as those businesses that employ 500 or fewer employees.

1.Small firms represent what percent of all employer firms?

    a. 65%

    b. 50%

    c.  99.7%

    d.  80%

2. How many self-employed individuals work in the U.S.?

    a. 500,000

    b. 1,250,000

    c.  5,000,000

    d.  15,300,000

3. What is the percent of private sector employees working  for small firms?

   a. 50%

   b. 25%

   c.  75%

   d. 10%

4. True or False. Small firms produce 13 times more patents per employee than large patenting firms?

   a. True

   b. False

5. How much non-farm GDP is produced by small firms?

   a. 52%

   b. 44%

   c. 68.5%

   d. 12%

6. Between 1993 and 2009 small firms accounted for what percent of the 15 million net new jobs created?

   a. 45%

   b. 89%

   c. 31%

   d. 65%

7. How many new employer firms opened for business in 2009?

   a. 552,600

   b. 89,452

   c. 215,463

   d. 12

8. Most recent census data indicates what percent of small businesses fail in the first two years?

   a. 96%

   b. 18%

   c.  31%

   d. 49%

9. True or False. Small firms hire 43% of all high tech workers?

   a. False

   b. True

10. What percentage of total U.S. private payroll comes from small business?

   a. 14.2%

   b. 62.8%

   c.  44.0%

   d. 82%

Answers (1-a) (2-d) (3-a) (4-a) (5-a) (6-d) (7-a) (8-c) (9-b) (10-c)