Satisfaction levels amongst temporary agency workers.
A review of the literature for the Recruitment and Employment Confederation.
Dr David Biggs CPsychol University of Gloucestershire Francis Close Hall Swindon Road Cheltenham Gloucestershire GL50 4AZ
Satisfaction levels amongst temporary agency workers: A literature Review
Table of contents
Executive Summary...... 1
Introduction...... 2
The Rise of the Employment Agency Industry...... 3
Agency Workers: Who they are ...... 7
Agency workers: their job satisfaction ...... 13
Challenges facing the industry...... 20
References ...... 23
This literature review has been produced as part of a wider research project funded by the Recruitment and Employment Confederation (REC). The opinions expressed within this report are independent of the REC and are not necessarily shared by the REC, its employees or the Recruitment Agency Industry. Special thanks go to Roger Tweedy of the REC for providing industry-based data and to Carmel Biggs of teambuildco for her thorough review. Total Word Count: 14,632
REC literature review i
Satisfaction levels amongst temporary agency workers: A literature Review
Executive Summary
This review specifically considers a wide variety of publications that have examined agency workers and the employment agency industry. The review initially investigates the phenomenonal increase of the industry over the last two decades. It suggests that the primary reason for this increase was the employers’ increasing need to have a flexible workforce. It also demonstrates how agency workers are used to supplement the permanent workforce rather than replace it. This is an important feature of the industry and suggests that it may be key in tackling unemployment. The demographics of the industry are next investigated. Interestingly, there is an alarming difference in the overall numbers of temporary workers reported through different secondary sources of information. This is a matter for concern as many commentators rely heavily on large Government surveys, such as the Labour Force Survey, that may underestimate the number of agency workers in the workforce. The review reports on other demographic variables such as: gender; age; gender and age combined; hourly rates; voluntary and involuntary take-up of agency work; education and ethnicity. This review provides us with an insight into the types of individuals that may take up agency work. Many are young and are twice as likely to come from an ethnic minority compared with permanent workers. A third of all agency workers also report that they do not wish to have permanent employment. Agency worker job satisfaction is investigated in a thorough review of the existing literature. Factors such as working relations, voluntary/involuntary employment and job security are found to be important antecedents to agency worker job satisfaction. Differences between the job satisfaction of agency workers and their permanent worker counterparts are discussed with research showing quite a variety of results. Some research has shown that temporary workers have a higher level of job satisfaction than permanent workers and other studies have shown the reverse. This clearly indicates that there is a need for further research to be completed in this area. Current trends in agency worker employment and the impact of the European Parliament’s Agency Worker Directive are also investigated through the academic literature. Concern was raised on the heavy reliance on secondary data sources as this data may not be wholly accurate and could lead to a misrepresentation of the industry. Further research into agency workers and the related industry is suggested and promoted.
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Satisfaction levels amongst temporary agency workers: A literature Review
Introduction
The Employment Agency Industry and the people they employ, entitled “agency workers” or “temps”, as they are known in popular language, appear to be a part of modern life, performing a wide range of jobs ranging from secretarial support, locums, office administration, through to interim management. Indeed, the turnover of this industry has grown dramatically and is estimated to be approximately £22,810 million in 2003/2004 by the Recruitment and Employment Confederation (REC). Agency workers are therefore a considerable part of modern society performing a wide range of jobs and contributing to UK industry. This report is then structured into the following sections. The Rise of the Industry The rise of the Employment Agency Industry has been well documented and this review initially charts this unprecedented rise during the 80’s, 90’s and early 21st Century. Economic and social factors that have contributed to this phenomenon are discussed and the benefits of the Employment Agency Industry to the economy and to society at large are detailed. Agency Workers: Who The different types of temporary work are highlighted with special they are consideration given to agency workers. The different types of individuals that are attracted to agency work and some of the demographic data about agency workers from both the UK and US are presented. Advantages and disadvantages of agency employment from an individual’s perspective are explored. This analysis reveals that agency work has some real advantages to traditionally considered disadvantaged groups such as working mothers and students that find it difficult to juggle their responsibilities and a full time permanent job. It also debunks the myth that agency work is not an employment contract of choice as many individuals voluntarily work in this situation and would refuse permanent employment. Agency Workers: their A critical review of publications examining agency worker job job satisfaction satisfaction is conducted. Factors such as working relations, voluntary/involuntary employment and job security leading to positive reports of job satisfaction in agency workers are also discussed. Differences between the job satisfaction of agency workers and their permanent worker counterparts are highlighted and methodological problems with this research outlined. Challenges facing the The challenges that face the Employment Agency Industry over industry the next few years are detailed. Current trends in agency worker employment and the impact of the European Parliament’s Agency Worker directive are also investigated. Further areas of research are suggested.
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Satisfaction levels amongst temporary agency workers: A literature Review
The Rise of the Employment Agency Industry
Employment agencies and agency workers are not a recent phenomenon, with their origins dating back to the eighteenth century (Storrie, 2002). During this time, the precursors to agency workers were supplied as domestic servants and ancillary staff for a third party employer, usually a wealthy household (McCrum and Sturgis, 2000). In contrast, in the 21st Century, temporary workers, of which agency workers are a particular type, are used for many different roles from filing through to nursing and interim management. This review specifically examines the agency worker and examines the rise of this type of employment. Increased employer need Casey (1988) examined the extent of temporary workers in for temporary workers modern businesses using the workplace industrial relations survey (WIRS) carried out between 1980 and 1984. He concluded that approximately one in five organisations used temporary workers. However, by 1987 this had grown to just under 50% of employers (McGregor and Sproull, 1992). In 1998, it was discovered that 61% of employers used agency workers, with the possibility that a larger number increasing on this figure used temporary workers in general (Cully, Woodland, O’Reilly, and Dix, 1999). The need to have a flexible workforce has been cited as a primary reason for the increased use of temporary workers (Atkinson, Rick, Morris, and Williams, 1996; Cully et al, 1999; Houseman, Kalleberg, and Erickcek, 2003; McGregor and Sproull, 1992; McKinsey and Company, 2000). Other reasons cited include recruitment (Engellandt and Riphahn, 2005); subcontracting human resource functions to employment agencies (Purcell, Purcell, and Tailby, 2004); gaining time to recruit appropriate permanent workers (Houseman, et al., 2003) and avoiding redundancy costs (Allan, 2002). Golden and Appelbaum (1992) examined temporary work in the US and the economic factors against the rise of this type of employment in the 1982-88 period. Both demand and supply issues were examined in detail by the authors using economic equations. They concluded that it was the demand for temporary workers by organizations in the economy rather than the supply of individuals wanting to complete this type of work that caused the upsurge in the employment of temporary workers. In the UK, the employment of temporary workers increased dramatically in the 1980’s and 1990’s (Biggs, Burchell and Millmore, In Press). The employment of agency workers has also followed this general increase as shown via the reported turnover from the industry (See Table A).
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Satisfaction levels amongst temporary agency workers: A literature Review
Table A: Turnover figures Period Turnover for Total Turnover in Total Turnover in of the Employment supplying agency temporary worker temporary worker Agency Industry workers only in £bn industry in £bn industry in £bn (Source: REC) (Source: REC) (Source: ONS) 2003/2004 22.6 24.5 n/k 2002/2003 21.4 23.0 n/k 2001/2002 22.8 24.2 23.4 2000/2001 17.1 22.9 22.9 1999/2000 n/k 18.4 18.6
1998/1999 n/k n/k 15.7
1997/1998 n/k n/k 13.3 1996/1997 n/k n/k 9.8 1995/1996 n/k n/k 8.1 1994/1995 n/k n/k 6.8 1993/1994 n/k n/k 4.8 1992/1993 n/k n/k 3.9
n/k = Data not available
Phenomenal growth in the Table A demonstrates the exceptional growth of the Employment st Employment Agency Agency Industry throughout the 1990’s and into the 21 century, although some comment on these figures needs to be made. Industry Between 2001/02 and 2002/03 Industry turnover for supplying agency workers reduced slightly by £1.4 bn but regained its strength the following year approaching the 2001/02 level. Reasons for a decline in turnover have been suggested. Analysis on the Labour Force Survey indicates that from (1998) until (2004) all temporary workers, including agency workers have declined as a percentage of the overall working population in the UK (Biggs, et al, In Press; Biggs, In Press). This decline in temporary workers was also noted in the US economy (Morris and Vekker, 2001). Nevertheless, the decline in the agency worker population to levels recorded in the mid 1980’s has not been reflected in the turnover of the Employment Agency Industry. One possible reason for this may be the increased rate of pay secured for agency workers by Employment Agencies (Biggs, In Press). Increasing agency worker wages is an important function for Employment Agencies (Druker and Stanworth, 2004) and it does appear from the Labour Force Statistics that agency worker wages have steadily risen since (1998) as shown in Figure 1. A further reason may be that the Labour Force Survey is not an entirely accurate description of the present Labour Market, or that it somehow under represents temporary workers.
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Satisfaction levels amongst temporary agency workers: A literature Review
Figure One: Increased Gross hourly rate of agency workers between (1998) & (2004) as portrayed in the Labour Force Survey (ONS, 2005)
£8.00
£7.50
£7.00
£6.50
£6.00
£5.50
£5.00
1 2 2 3 4 4 1 2 4 1 2 2 3 4 4 Q Q Q3 Q4 Q Q Q Q1 Q2 Q Q Q Q Q Q Q3 Q4 Q Q Q Q1 Q2 Q 8 9 9 0 1 1 2 3 3 4 9 98 98 9 9 99 0 0 01 0 0 02 02 0 0 03 0 9 9 9 9 9 0 0 0 0 0 0 0 1 1 1 1998 1999 Q119 1 1 2000 2000 2000 Q320 2 2 2001 Q320 2 2 2 2002 2003 Q120 2 2 2004 2004 2004 Q320
The Importance of the The Employment Agency Industry can contribute a great deal to Employment Agency the economy and society (McKinsey and Company, 2000). Organizations are demanding more flexibility in the workforce Industry (McKinsey and Company, 2000; Voudouris, 2004). Consequently, when workloads are high, appropriate staff can be brought in encouraging flexible work-practices (Cully, et al., 1999; McGregor and Sproull, 1996; Parnell, 2003; Tremlett and Collins, 1999). This can result in businesses gaining a competitive edge through the utilisation of just-in-time labour (Allan, 2002). Storrie (2002) examined the employers’ use of agency workers from a European wide perspective. He interestingly noted that 27% of organizations employed agency workers to replace permanent employees. This assertion implies that agency work somehow replaces permanent work. However, this finding has not been supported by the literature (Cully, et al., 1999; McGregor and Sproull, 1996; Tremlett and Collins, 1999). Indeed, Storrie (2002) lists his evidence from the category listed as ‘leave replacements’ in the CIETT 2000 survey. This category is likely to concern a temporary leave of absence in terms of holiday or illness for the permanent workers rather than any permanent leave of absence. Indeed, other UK studies have found that short-term cover is an important use of temporary workers but replacing them is not a commonly cited reason (Cully, et al., 1999; McGregor and Sproull, 1996; Tremlett and Collins, 1999). REC literature review 5
Satisfaction levels amongst temporary agency workers: A literature Review
Agency workers are thus likely to supplement the permanent workforce rather than replace it especially in the UK where the employment legislation allows permanent workers to be replaced fairly easily. McKinsey and Company (2000) presented the results of a survey of 500 firms carried out by Deloitte and Touche Bakkenist in May 2000. They found that if agency workers could not be used in an employment setting, employers would prefer to increase internal flexibility by utilising overtime (38% of companies) and increase external flexibility by for instance, outsourcing business functions. Indeed, only 14% of companies surveyed stated that they would hire permanent workers if agency workers were not available. McKinsey and Company (2000) also suggested that the Industry can serve to reduce unemployment within the European Union, by giving inexperienced individuals valuable work experience (as examined in the next chapter) or it may be able to solve the issue of unfilled vacancies with temporary support. Feldman et al (1994) demonstrated how underprivileged groups within society may be benefited from this type of employment, whereby it gives individuals the chance to gain skills to help them find ‘permanent’ employment. Temporary working and the Employment Agency Industry have dramatically increased since the 1980’s and is a major contributor to the UK Economy. Society in general also benefits from the industry by maintaining the UK’s competitive edge through encouraging flexible working practices and reducing overall unemployment.
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Satisfaction levels amongst temporary agency workers: A literature Review
Agency Workers: Who they are
This part of the review will examine the general demographic variables of agency workers providing an outline of the typical types of people that are employed on this basis. Agency work may provide disadvantaged groups with working opportunities not provided through traditional forms of permanent work. These issues will be explored through this chapter.
Definitions of workers Much of the literature on temporary workers is unclear in the terms and definitions used. This can lead to confusion, especially given the different types of temporary workers that exist in the UK today (Burchell, 1992; Felstead and Jewson, 1999; McGregor and Sproull, 1992). Given this, it is important to define the main types of employment that exist in the UK today. Warr (1991) defined work as an activity directed primarily towards financial gain. An individual conducting this activity may be defined as a worker (Prieto and Martin, 1990). Recent legislation, such as the Employment Rights Act 1996, used this definition to define both permanent and temporary employees. More specifically a permanent worker may be defined as, An individual who earns monetary reward from work carried out for a third party employing organisation whereby that paid work lasts for an indefinite unlimited period of time. Whereas a temporary worker can be defined as: An individual who earns monetary reward from work carried out for a third party employing organisation whereby that work only lasts for a limited period of time. These definitions still have their predicaments. For instance, if a locum was employed on a ten-year contract would they be on a temporary or permanent contract? One may argue that because the duration of the contract is of a specific amount of time, the locum is temporary. Yet, if the ten-year contract were continually renewed then their employment would be permanent as it lasts for an indefinite period. The employment of the locum can thus be both permanent and temporary, meaning that an all-encompassing definition of temporary work and permanent work is difficult to achieve (Casey, 1988).
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Satisfaction levels amongst temporary agency workers: A literature Review
Types of temporary There are many different types of temporary worker in the UK workers economy. Indeed, Casey (1988) lists 11 distinct types. Many researchers rely on the Government definitions of temporary worker types expressed through nationwide surveys carried out by the Office for National Statistics. In this regard, there are four main types of temporary workers: agency workers, fixed term contractors, seasonal workers and casual workers. Figure 2 demonstrates the different type of temporary work and from this, we can see that agency worker represents a significant category accounting for 16% of all temporary workers and just less than 1% of all workers in the September to November (2004) Labour Force Survey.
Figure 2: Different types of temporary workers as a percentage of all temporary workers reported in the Sept- Nov (2004) Labour Force Survey (ONS, 2005)
Not permanent in some Seasonal work other way 7% 12%
Casual work 19%
Contract for fixed period, fixed task 46%
Agency work 16%
Agency worker: the The triangular relationship between agency worker, third party definition employing organisation and employment agency has been well documented (Biggs, Senior and Swailes, 2002; Biggs and Swailes, In Press; Druker and Stanworth, 2004; DTI, 2002). This leads to the definition that an agency worker is, An individual who is employed on a temporary basis, through an employment agency, (for supply, on a fixed or limited period) to a third party employing organisation. An agency worker is therefore a temporary worker, but is a specific type of temporary worker supplied to a third party employing organisation through an employment agency.
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Satisfaction levels amongst temporary agency workers: A literature Review
How many agency workers There are wide variations in the number of UK agency workers are there? reported in the literature. The lowest number reported is 270,000 agency workers in the Labour Force Survey (Forde and Slater, 2005). The Labour Force Survey is designed to be nationally representative of the UK population; however, other data show that it may underestimate the number of agency workers. The DTI reported that there were approximately 600,000 agency workers (DTI, 2003) and the REC suggest that there are probably over a million agency workers in the UK. Indeed, the CIETT suggested there were 1,128,993 agency workers in 2000 a figure that is almost 4 times that of the estimated Labour Force Survey (Storrie, 2002). These variations in the estimated figures of agency workers in the UK economy are indicative of the problems of surveying temporary workers of this type. They also highlight the need for systematic independent research into this area so that the basic demographic variables in the industry can be conclusively ascertained. The Labour Force Survey (LFS) may be questionable in terms of its representative nature of agency and other temporary workers. However, given that the LFS can be used freely for non- commercial reasons, a number studies have examined the demographics of agency workers through an analysis of the LFS (for instance: Atkinson, et al 1996; Biggs, 2003a; Biggs, et al. In Press; Casey, 1988; Forde and Slater, 2005). Recent studies on The most recent published study concerning agency workers in demographic variables the UK was by Forde and Slater (2005), who examined various demographic variables. They demonstrated that almost two thirds of agency workers are represented in the clerical, secretarial and routine operative jobs; with few agency workers employed in higher skill knowledge occupations. Equally, Polivka (1996a) commented that most agency workers in the US were employed in similar roles. Nevertheless, Storrie (2002) completed a European wide study of temporary workers and this is worth examining first before other studies are considered. European Perspective Storrie (2002) completed a thorough review of temporary workers and the related industry, which was the first of its kind. The primary reason given for this report is to provide policy makers, economic and social commentators information on agency work. The study was based on 15 other earlier reports commissioned by the European Foundation for the Improvement of Living and Working all published in 2000. The report is a thorough review of the European perspective on agency work. Storrie (2002) demonstrated the remarkable difference between European countries in terms of statutory regulation of temporary work agencies, employment status of temporary workers and collective bargaining rights. This study demonstrated the wide differences between different EU countries, whereby in the UK it was shown that the employment status is rather complex as found by other authors (Howlings, 1997; McDonald, 2003).
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Satisfaction levels amongst temporary agency workers: A literature Review
Storrie presents a factual account of the legal aspects of agency work; however, he does not consider other aspects of employment legislation that may indirectly affect agency workers. For example, the ease of which permanent workers can be replaced is not considered. Nevertheless, studies have shown that employment legislation is likely to effect temporary employment immensely (Biggs, et al, In Press). For instance, commentators have suggested that the reason for the high levels of temporary employment in Spain, whereby over a third of the population is employed on a temporary contract is due to the difficulty in terminating the contracts of permanent workers (Dolado, Garcı´a- Serrano, and Jimeno, 2002). This contrasts to the UK, where temporary employment is comparatively low, probably due to the lower levels of employment rights for permanent staff. Gender Feldman, Doerpinghaus and Turnley (1994) stated that women may benefit from the flexible conditions that agency work affords them especially if they have family commitments. A number of other authors have also suggested that agency work tends to be female dominated (Casey and Alach, 2004; Cranford, Vosko, Zukewich, 2003; Heinrich, 2005). In contrast, Forde and Slater (2005) found this not to be the case, with a fairly balanced employment of the sexes in agency work, which was not the case with other forms of male dominated temporary employment. Age Forde and Slater (2005) also analysed age and found that all temporary workers, including agency workers, tended to be younger than their permanent worker counterparts. This suggested that younger people may be attracted to this type of work. Reasons for this may be due to those with a more precarious employment position being only able to secure temporary employment; or it may be due the lack of negativity that young people have towards working on a temporary basis, or that they prefer working in a flexible arrangement (Adams, 1998). Gender and Age Although temporary workers may be biased towards the younger worker, the age ranges of males and females differed from each other in the 1998 winter LFS (Biggs, 2003a). Agency employment for males decreased with age; however, this was not the case with females who tended to be employed throughout their careers. Rogers (2000) commented that in the US some of the males she interviewed used agency work as a way of sidelining themselves into a particular profession. Male agency workers may therefore use agency work to a large extend to gain permanent employment and once in permanent employment may be more likely to stay there than women. This was found in the US with differences found between males and females in the voluntary take up of temporary work (Feldman, Doerpinghaus and Turnley, 1995). This result was also replicated in the UK (Biggs, 2003a). These studies indicate major differences between males and females undertaking agency work and warrant further investigation. Hourly rates Wages were also assessed by Forde and Slater (2005) who utilised statistics to control for occupational, job and personal REC literature review 10
Satisfaction levels amongst temporary agency workers: A literature Review
characteristics. They found that relative to permanent workers agency workers were paid less. Differences were also apparent between the sexes, with males being paid 11% less than equivalent male permanent workers and females being paid 6% less. Many authors suggest that temporary workers are paid much less than their permanent worker equivalents; however, statistics do not demonstrate this to be the case (Kvasnicka and Werwatz, 2003). Perceived differences between the wages of agency workers and permanent workers are also likely to exist and independent research in this area is welcomed. Voluntary/Involuntary Forde and Slater (2005) state: take-up of agency work “Only a minority of agency workers state a preference for agency work.” p.266. Indeed, only 30% of agency workers in the (2000) LFS stated that they were not seeking permanent employment. A figure repeated in other studies (e.g., Biggs, 2003a). Nevertheless, using the LFS definition of voluntary and involuntary temporary working may be an over simplification of a complex phenomenon (Ellingson, Gruys, and Sackett, 1998). Certainly further independent research is needed examining voluntary/involuntary employment patterns, using validated measures. Education Nollen (1996) found that temporary workers in the US had lower educational attainment than permanent workers. In examining the (1998) winter LFS, Biggs (2003a) found this not to be the case in the UK. Non-agency temporary workers were the most highly qualified group of workers. This may be due to a higher proportion of students taking up this work (Mason, 1996) or the increased education of contractors competing in a knowledge intensive market (Boudette, 1989; Dinte 1995). Interestingly, agency workers and permanent workers were found to be very similar in qualifications (Biggs, 2003a). The only minor difference was that permanent workers had a higher proportional percentage of individuals with no qualifications compared with agency workers. This finding contradicts the general view that agency workers are somehow inferior to other groups of workers in terms of their qualifications. Ethnicity A number of authors have examined ethnicity and temporary working arrangements (Biggs, 2003a; Conley, 2003; Hayes and Solomon, 1996; Reid, 2002; Polivka, 1996a). In the US, both Nollen (1996) and Polivka (1996a) found that temporary workers were more likely to be from an ethnic minority compared with permanent workers. In analysing the UK LFS, a similar picture emerges whereby agency workers and non-agency temporary workers have a higher proportion of ethnic minorities compared with permanent workers (Biggs, 2003a). This difference is also more pronounced with agency workers who had a higher proportion of individuals from an ethnic minority compared to other forms of temporary work.
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Satisfaction levels amongst temporary agency workers: A literature Review
These findings may be due to the employment conditions that individuals from an ethnic minority find themselves in (Rogers and Henson, 1997). It may also be the case that dissatisfied with permanent work individuals from an ethnic minority background seek out temporary work where they may be more satisfied and use this to further their career (Greenhaus, Parasuraman and Wormley, 1990). Feldman, et al. (1994) argue that one of the advantages of agency work may be as a stepping stone out of unemployment for disadvantaged groups such as ethnic minorities. However, Storrie (2002) in the influential Dublin Foundation report stated that although agency work played an important part in labour market integration, transition data charting the employment status of agency workers before and after agency assignments was not available and thus it is difficult to ascertain whether agency work is a stepping stone out of unemployment. Nevertheless, Booth, et al. (2002) used data from the British Household Panel Survey and found that temporary jobs were a stepping stone into permanent work. Further research could be conducted in this area perhaps of a qualitative nature that ascertains how agency work may help those previously unemployed. Conclusion This review has so far considered a number of demographic variables such as gender, age, wages, education, voluntary/involuntary working conditions and ethnicity. Researchers have sought to clarify the basic demographics of the agency worker industry but are limited to national data that can be ascertained through surveys such as the LFS. Detailed new research is needed to confirm these UK wide labour force statistics with particular reference to the temporary worker and agency worker industry.
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Satisfaction levels amongst temporary agency workers: A literature Review
Agency workers: their job satisfaction
This review is interested in agency workers; their job satisfaction and the determinants or antecedents of their job satisfaction. The review will concentrate primarily on those studies that have examined agency worker job satisfaction. Although some of the studies on the wider category of temporary workers will be considered, it is recognised that these studies have limitations in their applicability to agency workers (Marler, Barringer and Milkovich, 2002; Silla, Gracia and Peiró, 2005). Job satisfaction studies Job satisfaction is an affective state where people like or dislike their job and is one of the most researched subject matters in business psychology (Quarstein, McAfee and Glassman, 1992; Spector, 1996). Indeed, in recent years, researchers have become interested in the job satisfaction of temporary workers with studies being conducted on agency workers (Biggs and Swailes, In Press; Biggs, et al., 2002; Chen, Popovich, Kogan, 1999; Ellingson, et al. 1998; Feldman, et al., 1994; Feldman, et al., 1995; Galup and Saunders, 1997; Hepburn and Nicholson, 1997; Koh and Yer, 2000; Krausz, 2000). Other studies have specifically examined fixed-term contractors (Feather and Rauter, 2004; Vanden Heuvel, and Wooden, 1997) and others have used the broader term of temporary or contingent worker (Allan and Sienko, 1997; Bardasi and Francesconi, 2004; Booth, Francesconi, and Frank, 2002; De Witte and Naswall, 2003; Feldman, Turnley 2004; Gallagher and Sverke, 2005; Gardner and Jackson, 1996; Hepburn and Nicholson, 1997; Lee, 1991; Marler, et al., 2002; Moshavi and Terborg, 2002; Porter, 1995a; Porter, 1995b; Sias, Kramer and Jenkins, 1997; Silla, et al., 2005; Vanden Heuvel and Wooden, 1997; von Hippel, Mangum, Greenberger, Heneman and Skoglind, 1997). Job satisfaction The experience of being an agency worker as opposed to being a antecedents traditional permanent worker is not fully understood especially with regards to job satisfaction (Feldman, et al., 1994). Many researchers assume that factors that contribute towards permanent worker job satisfaction will contribute towards agency worker job satisfaction; however, this is not necessarily the case (Gallagher and Sverke, 2005). Worker relations Worker relations are likely to play an important role in contributing towards agency worker job satisfaction (Biggs and Swailes, In Press; Chen, et al, 1999; Feldman et al, 1994; Galup and Saunders, 1997; Henson, 1996; Porter, 1995; Saloniemi, et al., 2001; Smith, 1998). Worker relations are also likely to have an impact on the permanent workers and thus on the organization as a whole (Byoung-Hoon and Frenkel, 2004; Davis-Blake, et al., 2003; Pearce, 1993; Porter 1995a; Porter 1995b).
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Satisfaction levels amongst temporary agency workers: A literature Review
Most of the research looking at the impact of labour relations on job satisfaction has been conducted in the US. It should be noted that the very different dynamics of this marketplace make it difficult to draw direct parallels with the situation in the UK. Feldman et al (1994) revealed that one of the primary concerns of US agency workers was the dehumanizing way they were treated by permanent workers. Rogers (1995) further described this dehumanizing effect as alienation from others, whereby agency workers did not mix socially with permanent workers or indeed other agency workers. Rogers and Henson (1997) suggested that the relationship between agency workers and permanent workers could become so bad that permanent workers may harass agency workers physically, mentally and even sexually; however, this finding was not replicated in the UK (Biggs, 2003b). Furthermore, studies in the US have shown how agency workers were excluded from social events that permanent workers were allowed to attend (Rogers, 1995; Smith, 1998) and often agency workers had to stay behind and work, monitoring the phones for instance, while permanent workers were out socialising (Rogers, 1995). Smith (1998) also found that agency workers were commonly excluded from meetings regarding work even if they had a valid contribution to make at the meeting. Socialising with agency workers by permanent workers was discouraged by both informal arrangements (Rogers, 1995) and formal arrangements (Smith, 1998). Henson (1996) revealed that agency worker assignments with little socialising and a poor worker relationship were the most dissatisfying of all assignments reported, linking together negative worker relationship with negative job satisfaction. Chen, et al, (1999) studied 112 agency workers and found that worker relations had a strong influence on their job satisfaction. A similar finding was also found in the UK, whereby agency workers stated how poor worker relations would considerably affect their job satisfaction even if the job itself was enjoyable (Biggs and Swailes, In Press). These results demonstrate that when an agency worker is placed in an organization where the worker relations are poor, job satisfaction and possibly performance is likely to suffer (Biggs, 2005). The reverse of this may also be true that a positive worker relationship may contribute towards a positive level of job satisfaction and is thus an important factor to consider in further agency worker research. Voluntary or involuntary The voluntary or involuntary take-up of agency work has also been nature of agency work thought to relate to job satisfaction in agency workers (Ellingson, et al, 1998; Feldman, et al., 1995; Krausz, 2000). Any agency worker who could not find a permanent job was deemed to be performing temporary work involuntarily whereas those not looking for permanent work were deemed to be performing work on a voluntary basis (Feldman, et al., 1995).
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Satisfaction levels amongst temporary agency workers: A literature Review
Feldman et al (1995) found that agency workers holding their job voluntarily displayed significantly greater job satisfaction than agency workers employed on an involuntary basis. Ellingson et al (1998) created four items relating to voluntary temporary worker status and four items relating to involuntary worker status and used this measure with 174 temporary workers. They found voluntary worker status was associated with high levels of job satisfaction and involuntary worker status was correlated negatively with job satisfaction. These findings suggested that agency workers, who perform assignments on an involuntary basis due to former job loss or lack of employment opportunity, may be less satisfied with their job than agency workers who were voluntarily employed. However, not all studies have replicated these findings (Bernasek and Kinnear, 1999; Biggs, 2003b). Although, the research on the voluntary and involuntary nature of work and its contribution to agency worker job satisfaction is unclear, this makes the variable a crucial one to examine in further research. Organizational Organisational commitment may be defined as an individual’s commitment feeling of attachment and belonging to an organisation (Cook and Wall, 1980). The organisational commitment of permanent workers may be described as feelings of attachment to their employer and a sharing of that organisation’s goals. The organisational commitment of an agency worker may be rather more complicated as they work for both a third party employing organisation and an employment agency (Druker and Stanworth, 2004; Gallagher and Sverke, 2005; McClurg, 1999). McClurg (1999) surveyed 200 US-based agency workers in terms of their organisational commitment to the third party employing organisation and to their employment agency. She found that agency workers were slightly more committed to their employment agency than to the third party employing organisation but this was not to a substantial degree. Newton (1996) suggested that agency workers have a dual commitment whereby the agency worker could be committed to both the employment agency and the third party employing organisation. McClurg (1999) further added that this dual commitment was not contradictory, in that being committed to one organisation did not result in not being committed to the other, as both employment agency and third party employing organisation work together to mutually satisfy each others organisation’s needs. Organisational commitment may contribute as much towards agency workers’ job satisfaction as it may with permanent workers. Indeed, a high level of organisational commitment may have fewer disadvantages for agency workers than for permanent workers because the expectation of agency workers by the third party employer is not likely to be as high (Biggs and Swailes, In Press). Consequently, even though an agency worker may show
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Satisfaction levels amongst temporary agency workers: A literature Review
commitment towards an employer, he/she might not be expected to demonstrate the additional extras expected of permanent employees such as staying late to complete tasks. Organisational commitment may therefore be a contributor to agency worker job satisfaction and may have more of an influence on agency workers due to the lack of negative consequences of having a high level of commitment (Biggs and Swailes, In Press). Organizational Biggs and Swailes (In Press) also suggested through their commitment and worker qualitative data that high organizational commitment in agency workers was likely to lead to a positive opinion of them by the relations permanent workers. Thus, organizational commitment may affect worker relations, which we detailed above as another possible antecedent to agency worker job satisfaction. Thus, organizational commitment may have a double affect on agency worker job satisfaction. Other antecedents The antecedents detailed above are likely to be the major contributors to agency worker job satisfaction and differ in their impact in comparison to being antecedents to permanent worker job satisfaction. Other antecedents have also been highlighted in the literature and are worth mentioning. These include skill variety, autonomy, feedback from the job and role ambiguity. Skill variety Agency workers are likely to gain a multitude of skills through the organizations they work for; skill variety is thus likely to vary from assignment to assignment (Alfred Marks Bureau Ltd, 1982; Brotherton, 1995; Burt and March, 1995; Digh, 1998; Feldman et al, 1994; Filipczak, 1996; Frazee, 1997; Lenz, 1996). Some authors have argued that skill variety may contribute towards job satisfaction. Rogers (1995) conducted qualitative research with 13 US-based agency workers and found that low levels of skill variety were associated with negative feelings and low job satisfaction. Other researchers (Henson, 1996; Smith, 1998) have reported similar findings that skill variety is related to job satisfaction and this has received partial support in the UK with 96 agency workers (Biggs, 2003b). Nonetheless, Biggs (2003b) found skill variety to be a rather weak job satisfaction antecedent especially when compared with organizational commitment and worker relations. Autonomy Autonomy is the freedom to pace and control tasks at work and is thought to contribute towards permanent worker job satisfaction (Becherer, Morgan and Richard, 1982; Finn, 2001). Caudron (1995) interviewed an undisclosed number of agency workers and found equal autonomy between temporary workers and permanent workers was likely to influence job satisfaction. Allan and Sienko (1997) analysed differences in job characteristics between 48 contingent workers (inclusive of agency workers, non-agency workers and part-time workers) and 149 permanent workers. They suggested that although autonomy may lead to job satisfaction in workers, no significant differences were noted between workers with regards to autonomy or job satisfaction. This suggests that autonomy has little to do with the job satisfaction of agency workers and UK evidence supports this (Biggs, 2003b). REC literature review 16
Satisfaction levels amongst temporary agency workers: A literature Review
Feedback Grensing-Pophal (1996) argued that if clear job expectations and performance levels were not outlined to workers then low agency worker job satisfaction may be the result. In the US, Henson (1996) used participant-observation techniques, whilst working as an agency worker, supported by qualitative interviews with 35 agency workers and found some agency workers received little or no feedback from the job. Newton (1996) also found that almost 20% of agency workers were not told about their job performance and Sias, et al. (1997) found that agency workers were less likely to seek appraisal information compared with permanent workers. However, no research has been conducted that has shown a positive correlation between feedback and job satisfaction. It is therefore likely to influence job satisfaction at a much less extent than the other variables suggested above. Role ambiguity Sias et al (1997) used a questionnaire-based approach to survey 42 temporary workers and 20 newly recruited permanent workers. Interestingly, they found role ambiguity to be negatively correlated to job satisfaction for both groups. However, no differences in role ambiguity were found between the two groups suggesting that role ambiguity was at the same level between temporary workers and permanent workers. Limitations to this study included the small sample of workers surveyed and thus it is unclear whether role ambiguity has a major influence on the job satisfaction of agency workers. In the UK, Biggs (2003b) examined 96 agency workers and found that role ambiguity was not a major antecedent to agency worker job satisfaction. Antecedents: conclusions A number of antecedents have been suggested as being important in affecting agency worker job satisfaction. Yet, many of the studies show support of these antecedents based on low correlations. In addition, comparative studies do not replicate results, so a clear picture of agency worker job satisfaction antecedents is yet to emerge. Nonetheless, worker relations, involuntary/voluntary working and organizational commitment are all thought to be major antecedents to agency worker job satisfaction and thus are worthy of further study. Difference between Relatively few studies have been conducted examining and permanent and temporary understanding differences between permanent and agency worker job satisfaction (Biggs, et al. 2002). However, a few studies have worker job satisfaction examined the difference between permanent workers and temporary workers in general (Allan and Sienko, 1997; Gardner and Jackson, 1996; McDonald and Makin, 2000). These studies may apply to agency workers and as such, they are worth considering due to the lack of research in this area. Allan and Sienko (1997) found no difference in job satisfaction between temporary workers and permanent workers, which they stated was a surprise given the precarious contracts of the temporary workers. In comparison, other studies have reported more favourable results demonstrating temporary workers with a greater level of job satisfaction.
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Satisfaction levels amongst temporary agency workers: A literature Review
McDonald and Makin (2000) examined 43 UK temporary workers and compared them with 102 permanent workers. They found that the temporary workers exhibited a higher level of job satisfaction than the permanent workers. Gardner and Jackson (1996) also found temporary workers had a higher level of extrinsic job satisfaction compared with permanent workers, although there was no difference between intrinsic levels of job satisfaction. These findings were a surprise to both sets of researchers. Gardner and Jackson (1996) concluded that permanent workers were at the time concerned with their future, which may have explained why their levels of satisfaction were lower than the agency workers. Biggs, et al, (2002) further added that in these studies, the permanent workers may well be influenced by the use of temporary workers within the organization. Difference between Studies on the job satisfaction differences between permanent permanent and agency workers and temporary workers remain inconclusive with some evidence suggesting temporary workers have higher levels of job worker job satisfaction satisfaction and others the reverse. In terms of examining job satisfaction with agency workers, two key studies stand out (Biggs, et al; 2002; Nicholson and Hepburn, 1997). Biggs et al (2002) examined call centre workers, and set up control measures in the study to try to control for the possible influences that working alongside temporary workers may have on permanent workers. Interestingly, they found that agency call centre workers had a more varied level of job satisfaction compared with the permanent workers they worked alongside or in other organisations. This may suggest that agency call centre workers have less job satisfaction than some of the permanent call centre workers studied. A further study conducted by Reed Personnel Services Plc compared the job satisfaction between 1,314 agency workers and a secondary source of permanent workers gathered by Professor David Guest for the CIPD (Nicholson and Hepburn, 1997). Interestingly, they found that 78% of agency workers reported satisfaction with their work compared with 75% of permanent workers. Yet, no statistical analysis was done between the two datasets so it is difficult to assess whether there was a true difference. The difference in job satisfaction between agency workers and permanent workers completing the same job is difficult to determine with just two studies in this area. These studies in a similar manner to research on the broader category of temporary workers demonstrate some support for the view that agency workers may be more satisfied than comparable permanent workers and the reverse that agency workers may be less satisfied than comparable permanent workers. This highlights the need for further research in this area. Further research Studies that have investigated the differences between job satisfaction between permanent, temporary and especially agency workers have been few and far between. This reflects the methodological problems of gathering data in this area. It also
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Satisfaction levels amongst temporary agency workers: A literature Review
may reflect the opinion of some researchers that agency worker job satisfaction is so similar to permanent worker job satisfaction that it is not worthy of study in its own right. The author disagrees with this proposition and suggests that further research is necessary in this area on two counts. Firstly, to determine the antecedents that are important contributors to agency worker job satisfaction. This review has highlighted that worker relations, involuntary/voluntary work and organizational commitment are all important in this regard. Secondly, that the differences between permanent workers and agency workers in terms of completing comparable jobs are assessed either by studying comparable workers that are not influenced by working with one another or by comparing primary data with secondary data sources.
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Satisfaction levels amongst temporary agency workers: A literature Review
Challenges facing the industry
In this chapter, we will be concentrating specifically on the challenges facing the industry. The lack of research within the industry is highlighted with reference to the review conducted. Recent legislation and the Agency Worker Directive are also explored in brief as they relate to existing research and a summary presented. Over reliance on The previous chapters have highlighted the need for more secondary data sources research on agency workers. When examining the rise of the Employment Industry several methodological problems were observed in collating basic demographic variables. Differences in the reported number of agency workers were observed between Government surveys and industry representatives. This demonstrated that Government surveys such as the Labour Force Survey (LFS) may well underestimate the numbers of agency workers in the UK. In addition, it was highlighted that many academic studies that have sought to investigate agency workers have used the LFS or other similar studies. This may have a serious limitation in studies of this nature as the data sources have different aims for collecting the data than the researchers. These surveys may also under- represent individuals in the community, such as immigrant seasonal workers who may not have a fixed abode especially if they are working on farmland or in the tourist industry. Indeed, although it may be difficult to gain primary data on agency workers or other types of temporary workers due to the precarious nature of their employment. This doesn’t mean that workers of this type should be ignored and highlights the need for research funding and subsequent research in this area. Contributors to agency Moving on to job satisfaction, it was clear that agency workers may worker satisfaction be different to other types of workers in terms of what aspects contributed to their job satisfaction. One of the difficulties with quantitative research is that you can only measure a certain amount of information. Thus, in a survey of job satisfaction antecedents it would be difficult to capture every single antecedent that is thought to lead to job satisfaction. Yet, the review demonstrated that three factors were important. Thus, a survey examining the influence of worker relations, involuntary/voluntary work and organizational commitment on job satisfaction would be a welcomed contribution to the literature. Are agency workers as The overall perception of the agency worker as being unsatisfied happy as permanent with their job especially when compared with permanent workers was questioned with several studies indicating the reverse of this workers in their job? being true. This highlights the need for independent research to examine specific differences between equivalent sets of workers.
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Satisfaction levels amongst temporary agency workers: A literature Review
Validate and reliable Studies of job satisfaction need to utilise valid and reliable measures measures. Studies such as the research carried out by Nicholson and Hepburn (1997) that did not use validated and reliable measures of job satisfaction have great difficulty in supporting their claims as they cannot perform the relevant statistical analysis and are thus open to criticism. One problem with this is that many valid and reliable measures have been constructed with permanent workers in mind and are often unsuitable for use with temporary workers. Nevertheless, some scales can be used or can be constructed by appropriately qualified Occupational Psychologists. The worker relations scale, for instance, was designed with both permanent and temporary workers in mind originating out of research in the agency worker arena (Biggs, 2004). Other scales such as the Job Diagnostic Survey (JDS) devised by Hackman and Oldham (1975; 1980) have also been used successfully in a number of temporary worker studies (Allan and Sienko, 1997; Biggs, et al, 2002) as no permanent tenure is assumed. Agency Worker Directive Looking to the future of the industry, it is likely that the Agency Worker Directive (AWD) will have a large impact on the Employment Agency Industry. McKinsey and Company (2000) published a report for the CIETT stating that a lift of regulations for the industry was likely to have a number of economic and social benefits. However, the REC argues that the Directive will impose a greater bureaucracy on Employment Agencies and thus have a detrimental effect to the industry. The REC does support the AWD but argues that the derogation period should be long enough that it doesn’t jeopardise jobs by adding unnecessary bureaucracy. Other organizations such as the TUC disagree with this and argue that agency workers should be afforded the same rights as permanent workers no matter how long they are employed (TUC, 2005). Surveys on the impact of In order to investigate this matter further, the CBI completed a joint the AWD survey with Pertemps surveying more than 400 firms (CBI, 2003). They found that 47% of organizations would stop using agency workers altogether if the new legislation was brought in. They argued that this would decrease the flexibility of organizations in responding to fluctuations in demand and put more pressure on permanent workers to get the work completed. These results were also replicated in a smaller but arguably more independent study that found over half the employers surveyed would reduce their usage of agency workers if the directive came into being (Biggs, In Press1). Indeed, similar legislation that has already been implemented in the UK with fixed-term contractors, seasonal workers and casual workers arguably had the affect of reducing these types of temporary workers in the UK Economy (Biggs, et al., In Press). The DTI (2003) conducted a thorough assessment of the impact of the AWD, and they suggested that the AWD may result in better working conditions and better pay by approximately £366 million
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Satisfaction levels amongst temporary agency workers: A literature Review
per year. Holidays may also be provided equalling a further £118 million per year in vacation allowance. However, this cost may be passed onto employers and may discourage them from using agency workers decreasing their flexibility. Challenges: A summary The Recruitment Industry is faced with a number of challenges that will have to be tackled over the next few years. It is clear that current research in the area is limited. If individuals that influence the industry make decisions on poor research then problems are likely to occur that may jeopardise the flexibility of organizations. Decisions may also jeopardise vulnerable individuals in society who may not be able to secure permanent or agency work. Further research is needed into various aspects of the Industry ranging from analysing basic demographic data through to understanding complicated phenomenon such as job satisfaction.
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Satisfaction levels amongst temporary agency workers: A literature Review
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Satisfaction levels amongst temporary agency workers: A literature Review
Verespej, M.A. (1997) Workers' comp non-manageable? Steelcase and Continental Airlines are managing it successfully. Industry Week, 246, 13, 25-27. Verespej, M.A. (1989) Part Time Workers: No Temporary Phenomenon A New Industrial Revolution: Full Timers, Part Timers and Temps Work Side By Side. Industry Week. 238, 7, 13-16. Vitols, K. (2005) Reforming the German Labour Market: the Case of Temporary Agency Work. Competition and Change. 8, 4, 375-390. Voudouris, I. (2004) The use of flexible employment arrangements: Some new evidence from Greek firms. International Journal of Human Resource Management, 15, 1, 131-146. Waas, B (2003) Temporary Agency Work in Germany: Reflections on Recent Developments. International Journal of Comparative Labour Law and Industrial Relations. 19, 3, 387-405. Walker, L. (1996) Instant Staff For a Temporary Future (Contract Working at Cable and Wireless). People Management, 2, 2, 34-36. Walsh, J. (1999) TUC Attempts to promote the rights of agency workers. People Management 5, 8, 15. Walsh, J. (1997) TUC: Make Pensions Available To All Staff. People Management, 3, p17. Ward, K., Grimshaw, D., Rubery, J., and Beynon, H. (2001) Dilemmas in the management of temporary agency staff. Human Resource Management Journal, 11, 4, 3-21. Warr, P. (1990) The Measurement of Well-Being and Other Aspects of Mental Health. Journal of Occupational and Organisational Psychology, 63, 3, 193-211. Wasmer, E. (1999) Competition for jobs in a Growing Economy and the emergence of Dualism. The Economic Journal, 109, 349-371. West, K.L. (1996) Effective Training for a Revolving Door (Training Temporary Employees). Training and Development, 50, 9, 50-53. Weston, R. (1997) It's just a working relationship. PC Week, 14, 3, 107-109. Wheeler, J. (1999) Hitting the ground running. Management Accounting, 77, 1, 52-53. Wheeler, A.R. and Buckley, M.R. (2004) Permanent Employee Attitudes toward Temporary Employment. International Journal of Selection and Assessment, 12, 3, 274-277. Wheeler, A.R. and Buckley, M.R. (2001) Examining the motivation process of temporary employees A holistic model and research framework. Journal of Managerial Psychology, 16. 5, 339- 354. Wiens-Tuers, B.A. and Hill, E.T. (2002) Do They Bother? Employer Training of Temporary Workers. Review Of Social Economy, 60, 4, 543-566. Wiens-Tuers, B.A. and Hill, E.T. (2002) How did we get here from there? Movement into temporary employment Journal of Economic Issues, 36, 2, 303-311. Wiley, C. (1995) Comparison of Seven National Temporary and Staffing Agencies. Employment Relations Today, 69-91. Wilsher, P. (1993) Flexible Working Gives EC a Bad Headache. Management Today, 10-12. Zeytinoglu, I.U., Lillevik, W., Seaton, M. and Moruz, J. (2004) Part-Time and Casual Work in Retail Trade Stress and other Factors Affecting the Workplace Industrial Relations, 59, 3, 516- 543.
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