Determinant factors for high performance in the temping industry

By André de Waal and Alex Meingast (HPO Center, the Netherlands)

Abstract

The temporary staffing industry could be characterized as a measure of the economy: if turnover increases the economy picks up; if turnover decreases the economy slows down. As the industry is highly influenced by economic cycles, it shows erratic financial results and a traditionally high employee turnover. Managers of temping agencies are therefore looking for ways to stabilize and increase their performances. One of the concepts they are increasingly interested in is the High Performance Organizations (HPO) framework. This study aims to identify the determinant factors of high performance in the temping industry by applying the HPO framework at a temporary staffing company. The research results show there are ten characteristics of a sustainable successful temporary staffing company. The practical implication of this study is that by showing the determinants of high performance in the temping industry it helps managers to add focus to their efforts to create more stable, high-performing organizations.

Keywords: temporary staffing industry, high performance organizations, HPO, temping industry.

Introduction

In the past few decades the temporary staffing industry has become important because of cushioning the effects of economic upswings and downswings (Peck and Theodore, 2007). Temping agencies have obtained a crucial role in the job market as mediators between employers and temporary workers. In addition they have become more and more actively involved in shaping the labor market by introducing new labor ideas which influence policy makers (Coe et al., 2011). Intermediaries working at temping agencies survey vacancies at companies which may need temporary workers, and then try to fill these vacancies with temporary workers who are kept on file at the agency. They are responsible for: bringing in new clients, usually companies that regularly need temporary help; registering new temporary workers (often also registered at competing agencies); keeping registered temporary workers happy and loyal to the agency; and profitability of the agency’s activities (Moorman and Harland, 2002). The temporary staffing industry functions as a ‘shock absorber’ for human resources: in an economic upswing, when companies are short on labor, temp agencies can quickly provide temporary workers; in an economic downswing temp agencies absorb the excess workers just as quickly (Benner, 2003; Pfeifer, 2005). Peck and Theodore (2007, p. 171) state the industry “has moved from the role of stopgap-staffing provider, supplying short-term cover for eventualities such as maternity leaves and seasonal spikes in demand, to a more systematic and continuous function, mediating between companies’ personnel offices and their preferred labor supplies across an increasingly broad array of industries and occupations.” The temporary staffing industry could be regarded as a measure for the economy: if temp agencies show decreasing turnover the economy slows down; if they show a turnover increase during a recession (the end of this recession) is most likely near. For the temporary staffing industry the close link to economic growth development means rather erratic financial results with possible severe ups and downs in revenue. In addition, the industry traditionally has a high turnover in employees; a yearly turnover of 20 to 30 percent is no exception. This may be caused by people’s perception of temping agencies offering mainly starting positions which allow workers to gain working experience rather than long-term positions, or ‘in-between jobs’ during the search for a permanent position (Kvasnicka and Werwatz, 2003; Burgess and Connell, 2005). As the economic ties and turnover issue have increased the unpredictability of the results of temping agencies, many managers in the industry are looking for ways not only to increase but also to stabilize the performance of their agencies (Theodore and Peck, 2002). One of the concepts managers are interested in is the high performance organization (HPO) framework (Waal, 2008, 2012). This framework was designed based on a literature review of 290 studies on excellence and on a worldwide survey. This study aims to identify the determinant factors of high performance in the temping industry by applying the framework to a temporary staffing agency. The practical implication of this study is that by knowing these factors managers in the temporary staffing industry can focus on improving exactly those organizational elements that create a more stable, high-performing organization. This article is organized as follows. The following two sections go into the extensive research underlying the HPO framework and identifying five HPO factors that are part of the framework.

Read the paper ‘Determinant factors for high performance in the temping industry’ from Problems and Perspectives in Management, Volume 9, Issue 4, 2011 in PDF.