Stop Asking About Contingent Worker Turnover Rates! | DCR Workforce Blog

Stop Asking About Contingent Worker Turnover Rates!

trendsToday’s work environment is a complex place. Talent crunches go hand in hand with high levels of unemployment, driving the increased use of temporary workers to augment their permanent workforce. Companies are strategizing to build their employer brand to attract more talent. Of course, finding talent is only the beginning. Holding onto that talent may pose a greater challenge. It is not uncommon for companies seeking staffing suppliers to issue an RFP in which the potential supplier is asked, “What is your contingent workforce turnover rate?” That is the wrong question!

When a contingent worker comes on board, the short term nature of their tenure and limited opportunity for advancement would suggest a possible lack of engagement with the employer leading to a reduced commitment to completing the agreed upon assignment. The true questions to be answered is “What is being done to ensure that contingent workers satisfactorily complete each engagement? Can we expect them to be as productive as regular workers? How do we gauge their loyalty to the organization?”

Any response provided by a staffing supplier to the request for a turnover rate will be meaningless and probably misleading. Why? In considering the number of workers that leave or are separated before their temporary assignment is over, the costs associated with separation, rehiring and retraining vary by skill, location, and other factors. A company may find that a high turnover rate among readily available, low skilled, short-term resources is merely a nuisance while the loss of a single worker with hard to find skills needed for a mission-critical assignment has a severe impact.

When temp workers fail to complete assignments and must be replaced, losses go beyond the sourcing and training costs: Companies must also factor in:

  • Productivity losses. It is estimated that a temp worker operates at 60% of optimal productivity during their training period.
  • Safety risks. The Bureau of Labor Statistics (BLS) indicates a direct correlation between worker turnover and accident rates. Temporary worker rates tend to be higher than for permanent employees, and high levels of attrition further increases the number of safety incidents, OSHA penalties, and insurance costs.
  • Overtime costs. When workers abruptly leave a position, companies are often forced to cover this absence by authorizing increased overtime for the remaining workers.
  • Management distractions. High turnover rates require increased time and attention of hiring managers in evaluating and interviewing candidates and orienting new workers.

Of course, many of the tools available to motivate and engage permanent employees do not apply to temporary workers. However, steps that can be taken to reduce attrition rates include:

  • Offer competitive base pay rates. Companies that compensate temporary workers at lower rates than the norm for those skills and locations drive higher turnover for the staffing firm.
  • Separate but equal rewards and recognition. To avoid claims of co-employment, companies should refrain from offering career counseling or performance assessments to temporary workers. Also, avoid including non-employees in reward and recognition programs. However, as employers of record the staffing suppliers should offer these programs and incentives to the temporary workers.
  • Offer shift incentives. Many temporary workers are attracted to the higher pay rates and alternative work hours of second or third shifts.
  • Model good and bad hire and fit. Gather data on the hard and soft skills that constitute a “good fit”.       Provide this feedback to staffing suppliers.
  • Enhance job descriptions. Vague job descriptions that do not accurately describe the work responsibilities or working conditions increase job dissatisfaction for temporary workers.
  • Comprehensive onboarding and orientation. Require all staffing suppliers to adhere to corporate standards for onboarding and new worker orientation. Provide workers with the necessary access to the information, resources and tools required to deliver results on their assignment.
  • Clear supervisory leadership. A common cause of temporary worker turnover is multiple bosses providing inconsistent direction or disagreeing on work priorities.

Employee engagement is a moving target. Recognize the workers’ contribution and encourage the worker to develop a sense of belonging and value. Partner with your suppliers to ensure that temporary workers share your vision and be on your team, even if it is for a short term. All said and done, no job is truly permanent!

The content on this blog is for informational purposes only and cannot be construed as specific legal advice or as a substitute for competent legal advice. They reflect the opinions of DCR Workforce and may not reflect the opinions of any individual attorney. Do contact an attorney for advice specific to your issue or problem.
Lalita is a people/project manager with extensive experience in operations, HCM and training and development across industries like banking, education, business consulting, BPO and information technology. She believes in a dynamic approach to life and learning as change is the only constant.