Permanent Temps

harles Zerbe started working at the Curtis Bay, Md., Coast Guard yard in 1965 helping build ships' hulls. Zerbe was a temporary worker; his first tour at the yard was just three months long. Thirty years later, in 1995, Zerbe became the yard's production manager supervising about 460 waterfront workers, nearly 10 percent of whom are contingent employees, as he once was. They are members of an on-call workforce of term employees the yard created to match its fluctuating workload of ships moving in and out for repair. This roster of nonpermanent employees gives the yard a group of trained, experienced staffers who can go to work when they're needed and go home when they're not.

Across government, managers are beginning to make more creative use of temporary and term employees and contractor staff, and are structuring parts of their organizations to be permanently staffed by temporary workers. Agencies always have used intermittent, seasonal and part-time employees and contractors to fill in for permanent workers, handle special projects, deal with workload surges and provide special expertise. The Office of Personnel Management pegs the number of temporary workers in government at 102,804 as of September 1995, the most recent year for which data is available. More than half those temporary employees worked full time, while about 15 percent were part time and 30 percent worked intermittently. Temporary workers average about 6.5 percent of the total federal workforce, according to OPM.

Now agencies are changing the ways they use contingent workers, partly in response to the changing nature of work. Increasingly, part-time and temporary work situations are taking the place of full-time, permanent jobs in the private sector, according to management expert William Bridges, author of Job Shift: How to Prosper in a Workplace Without Jobs. Indeed, the average number of people working as temporaries nationwide topped 2 million for the first time in 1995 and daily temporary employment averaged 2.4 million for the third quarter of 1996, an increase of nearly 50 percent since 1991, according to the National Association of Temporary and Staffing Services (NATSS) in Alexandria, Va. Bridges attributes the growth in contingent staffing to the growing reliance of private- and public-sector organizations on work teams whose makeup and duration are driven by the fluctuating demands of specific projects.

Management scholar Charles Handy, author of The Age of Unreason and The Age of Paradox, predicts that in the future, work will be done by "shamrock organizations," three-leafed structures comprised of permanent, highly motivated professionals; a second sector combining outsourced functions and services; and a third portion consisting of a flexible cadre of temporary employees and contractors. As agencies seek to outsource non-core functions, many federal managers see their own organizations evolving toward Handy's model. In an interview following publication of his book, Post-Capitalist Society, management guru Peter Drucker predicted that "in another 10 or 15 years, organizations may have outsourced all work that is 'support.' " This may prove true in government as well, as federal downsizing continues to target administrative and support jobs.

Expectations of young people entering the workplace and workers displaced by sea changes in the economy also are changing. "More people realize that cradle-to-grave employment is a myth-[that] job security lies within the individual, not in the job," says Bruce Steinberg, NATSS research and media relations director. Steinberg notes that temporary employment traditionally has been dominated by low-skill jobs but is becoming attractive to professionals and people with high-level technical skills.

Conserving Resources

Whether by downsizing, rightsizing, streamlining, reorganization, reinvention or reengineering, a vast number of private- and public-sector organizations have gotten smaller in recent years. Many federal managers contend their organizations have shrunk without concomitant reduction in missions or responsibilities to the public. The work is there, but the people are not, and the authority to fill vacated positions with permanent, full-time employees is gone. At the Veterans Affairs Department, for example, consolidations and reorganizations resulting from changing health care delivery systems, such as increased use of outpatient clinics, have stimulated a search for alternatives to permanent workers. Managers are encouraged to make "creative use of term employees in order to survive," says VA personnel staffing specialist Jan Stanley, so they are turning to contracting out and the use of temporary employment.

Because the Clinton administration and Congress have agreed to balance the budget by 2002, pressure on non-Defense agency budgets has grown and future funding is uncertain. Managers must use their remaining resources with greater care and they are less confident than in the past that program funding will remain stable, let alone increase. In many agencies, managers have been forced to cannibalize the resources at hand. Like Phineas Fogg in Around the World in Eighty Days, managers burn the ship itself for fuel in the fervent hope that they will reach port before sinking. In such conditions, a decision to hire permanent employees-with its attendant long-term commitment-is made only reluctantly, and the more reversible decision to hire contingent workers becomes attractive.

Different Strokes

Although the forces driving increased use of contingent workers affect agencies in similar ways, their use of nonpermanent staffers varies. OPM's Workforce Restructuring Office reports an increasing number of agencies are giving workers displaced by downsizing temporary and term appointments-appointments made for one year that can be extended up to four years and that accrue similar benefits to permanent employees-as "bridge positions" between their permanent federal jobs and retirement or new jobs in the private sector. Agencies benefit twice from these arrangements: They get highly qualified, experienced employees for short-term projects, and they lend a hand to fellow federal workers making difficult transitions.

VA personnel specialists report more managers are figuring out ways to use contingent employees. Not only is the VA budget fluctuating, but staffing requirements also vary with noncontrollable factors such as patient population. Term employment "fits beautifully," according to Stanley. "Managers love to use contingent authorities," she says. VA managers have found skilled temporary staffers quite efficient at carrying out critical projects, such as setting up databases and conducting certain research, that are limited in time and scope. Rather than create disruption in the workforce by hiring permanent workers who later must be laid off, VA hires term employees for the duration of projects.

The Comptroller of the Currency uses term employees as research assistants in its Economics Department. The Comptroller of the Currency, like some other agencies, has used temporary appointments, but found term appointments provide the same advantage to the organization while providing a form of contingent work that is more attractive to some employees. Term employment can be extended for a longer time and carries benefits that temporary employment does not. "I don't see any downsides for us," says Zipper Vilosky, senior staffing specialist at the agency.

The Coast Guard yard at Curtis Bay used to hire temporary employees to handle its workload peaks, but two years ago turned to term employees, says Kay Benner, senior command staff adviser. For years, the yard had hired temporary workers when workloads peaked and laid them off when the work was finished. The arrangement left the temporary workers without benefits and meant the yard had to go through the entire hiring process anew each time workload grew. In 1995, legislation limited temporary appointments to just two years, Benner says, so the yard turned to term appointments, which convey some benefits and can last for four years. The yard created an on-call workforce of term employees. The advantage of such an approach, Benner explains, is that these employees "were on-call in a nonpay status, but could be kept on the rolls and called back quickly as the need arose." Term employees receive health insurance coverage and can continue it-at their own expense-when they are in nonpay status. The on-call workforce gives the yard a corps of experienced employees ready to fill in on short notice without going through complicated hiring procedures.

Over time, Curtis Bay has used term employees as engineering technicians and safety specialists, as well as in the skilled trades. Though the number of contingent workers on duty at Curtis Bay varies, on average, about 10 percent of the waterfront workforce is on term appointments at any one time, Zerbe estimates.

Special Cases

Henry Romero, Justice Department personnel director, points out that even though the agency is adding permanent employees in areas such as federal prisons, the Drug Enforcement Agency, and the FBI, Justice components still use term employment for projects with fixed goals, outputs, or time limits. Romero says contingent employment is the best way to get appropriate expertise while maintaining fiscal responsibility for "special projects where Congress has provided funding and guidance for a one- to two-year task force."

Some federal agencies were designed to take advantage of contingent workers. The Pension Benefit Guaranty Corporation was structured from its inception in 1974 to use a high percentage of contract employees to carry out its mission of overseeing and insuring the integrity of the nation's private-sector pension plans. Financial experts working on a contingent basis also perform much of the Treasury Department's technical assistance to foreign countries.

Pros and Cons

Federal managers have several options if they want to staff on a contingent basis. Agency personnel and procurement specialists can explain how their organization handles each type of appointment. The benefits of using contingent workers include flexibility, cost control and expertise that can be focused immediately and for only as long as necessary on specific tasks and projects. Both contingent workers and managers understand the terms and conditions of employment, and their common expectation is that the employees will be separated from the work unit after a prescribed time. Managers and contingent workers often consider contingent work a trial period for potentially permanent employment.

The downside, many managers believe, is that contingent workers will be less loyal than permanent employees. If managers consider loyalty to be unconditional commitment, contingent workers probably will seem less loyal than permanent employees. Employee loyalty usually is reciprocated by employment security and this is not the exchange in contingent employment. But the guarantee of security has grown less certain even for permanent employees. In his recent book, Breaking Free, David Noer argues that loyalty based on perceived security and hope for future advantage is not the most positive grounding for a psychological contract between employee and employer. Noer maintains that personal and professional commitment to excellence is a healthier premise, and is more likely to result in productive outputs for all involved. A commitment to excellence is not dependent on permanent employment.

Bang for the Buck

But a perception of disloyalty is not the biggest obstacle facing managers hoping to employ more contingent workers. The biggest hurdle is learning to effectively deploy and manage temporary employees. Organizations will best use contingent workers by employing them as part of an integrated staffing plan that defines the specific purposes for all types of employment. They will clearly describe and organize the work and have in place the tools and information temporary employees will need. Permanent staff will be prepared to accept and support their contingent colleagues. To succeed, contingent workers need a sense of purpose and contribution. Their work should be tracked and evaluated in the same way as that of other employees.

Contingent workers do not come with a sense of the organization's culture, and many of the tacit and informal understandings are not immediately accessible to them. That's where good supervision can help and, fortunately, it's easier to supervise temporary workers than to manage permanent staffers. Contingent workers usually arrive with high expectations, high hopes and a positive attitude. They don't often become "problem employees" because they and agency managers know contingent employees quickly become former employees if problems arise.

Corporate and Government Consulting Inc. recently surveyed 500 temporary employees and 500 employers of contingent staff. The workers said they enjoyed the challenge, variety and constant learning involved in contingent work. They said they worked best where the atmosphere was friendly and supervisors were supportive and gave clear directions. Employers rated temporary staffers higher than their permanent staff on reliability, friendliness, diligence and producing desired outcomes.

Sometimes the permanent workforce feels threatened by contingent employees, who are viewed as interlopers and outsiders, especially in organizations unused to change and mistrustful of managers. Managers are advised to be candid and direct with permanent staff; make sure they understand they, not just managers, are responsible for making sure temporary employees succeed. Where contingent workers are regularly used and used well, supportive and symbiotic relationships often develop between permanent and temporary staff.

Charles Zerbe, who rose to be Curtis Bay production manager, observes, "I started here at the yard in Curtis Bay as a temp. I was a shipfitter helper, first for three months, then for a six-month extension. After that I got a permanent position." Now, as a manager, Zerbe sees the contingent workers in his operation as a positive force for accomplishing the mission.

The use of contingent workers likely will expand for at least the next decade and managers have a choice of reactions to that growth. Those who see accommodating contingent workers as an obstacle will be distracted and discouraged. Those who see the change as an opportunity will be energized and empowered.