Temporary workers and those who depend on them.
By Thomas R. Giddens
For many U.S. companies that were forced to cut costs and pare down their workforces, temporary workers are helping to maintain flexibility in employment costs and to rebuild the workforce slowly to match the rebounding economy. Temporary help services, including contract and temp-to-perm assignments, help fill an important role for businesses and for unemployed workers. Yet many of these employees are at risk of having inadequate insurance coverage, a challenge that can be partially solved by voluntary insurance options.
Economists view temporary help activity as a predictive indicator of companies’ future hiring behavior. Although the unemployment level remains high, the most positive trend on the employment front continues to be the temporary help services sector—consistently delivering year-over-year growth with a total of more than two million jobs, according to the Bureau of Labor Statistics. This trend is likely to continue according to a recent Aflac study of employers, which found that 31 percent of HR executives plan to hire part-time workers in the next 12 months, and 19 percent will hire contractors.
These strong growth numbers clearly illustrate the value of temporary work to both employers and workers alike. In fact, a recent study by SFN Group, Inc. found that 69 percent of companies agree that the flexibility of the contingent workforce has allowed their organization to remain nimble during economic ups and downs.
Pathway Back to Permanent Employment
The growing popularity of temporary assignments helps unemployed workers as well, particularly during economic downturns. These workers can use temporary assignments as a means of returning to the working world in the short term and as a chance to secure a permanent position over the long term.
A recent study by the American Staffing Association found that 75 percent of temporary workers say it is a good way to obtain a permanent job, and a large number of companies use temporary workers to find people who are a good fit to become permanent employees.
It’s clear that the use of temporary workers is a vital component of driving economic recovery and putting people back to work. Yet, lacking benefits and adequate insurance can not only deter people from pursuing temporary employment but leave these valuable workers highly vulnerable to financial distress or even ruin.
Lack of Benefits a Frequent Barrier
Workers in flexible staffing arrangements—including temporary, direct-hire temporary, on-call, and contract workers—are less likely than full-time, exempt employees to be covered by laws that mandate or regulate workplace benefits. Therefore, workers in such situations are much less likely to receive pension, health insurance, and other ancillary benefits at the worksite.
Scores of qualified candidates considering entering temporary employment have been unemployed for months, and lack insurance and benefit coverage. Although some staffing firms offer employer-paid health insurance coverage, few temporary workers participate, because the majority work for short periods of time, and most of those benefits are not portable.
For this reason, one of the most competitive advantages staffing agencies or companies have at their disposal is to offer temporary or contract workers a greater number of health insurance options. Staffing firms have a unique opportunity to differentiate themselves in the marketplace, while providing their valuable temporary workforce with the peace of mind that comes from having their health and well-being protected. By offering voluntary insurance options, temporary or contract workers can secure insurance coverage that is competitive and portable—meaning that workers own the policy and can take it with them if they change jobs or retire.
The boon to staffing employers is that offering voluntary benefits has no direct cost to them. Also, in the staffing and recruiting industry, having the best candidates at your disposal is truly what distinguishes one company from another. Providing world-class benefit options not only offers temporary employees added benefits, but also increases their value as a staffing employer of choice.
Voluntary insurance, also called supplemental coverage, represents a variety of insurance policies made available to and paid for by employees as a voluntary option. These insurance plans provide a wide range of coverage choices, including short-term disability, accident, life, dental, vision, cancer, and hospital confinement indemnity plans.
Voluntary insurance is structured in a way that helps workers cope with out-of-pocket costs associated with serious accidents or illnesses—costs that can financially impact workers covered by major medical insurance. In the event of an injury or illness, voluntary insurance policyholders receive cash benefits that can be used to help pay for daily living expenses, such as rent, gas, groceries, travel expenses, and child care, as well as unreimbursed medical expenses. Perhaps most important for temporary or contract workers, these policies are portable.
With each passing month, the economy appears to be building steam and inching toward full recovery. However, most experts agree that the rebound will be long. As employers continue to leverage temporary and contract workers to help them meet the ever-changing ebb and flow of consumer demand for goods and services, many of these workers will be in need of adequate insurance and benefits to help bridge the gap to full-time employment. Voluntary benefits represent an excellent opportunity for staffing firms not only to help protect the lifeblood of their business, but also to help drive top talent to the temporary industry and to their organizations in particular.
Thomas R. Giddens is senior vice president, director of sales at Aflac
