$21 Million Spent Annually on Temporary Help in NW Arkansas

The annual payroll for temporary employees in the Fayetteville-Springdale-Rogers metropolitan area was $21.5 million in 1996, up from $19.4 million in 1995 and $6.2 million in 1988, according to a trade association that monitors such statistics.

The average daily employment for temps in the Northwest Arkansas metro area was 2,270 in 1996 (the most recent year for which stats are available), according to the National Association of Temporary and Staffing Services, which is based in Alexandria, Va., and represents 85 percent of the industry — some 1,600 companies with 13,000 offices.

The average daily employment for temps in Northwest Arkansas was 2,140 in 1995 and 850 in 1988.

Bruce Steinberg, director of research and public relations for NATSS, says the national payroll for temps in 1996 was $31.5 billion, up 12.8 percent from last year, and receipts totaled $43.6 billion, up 11.2 percent. The average daily employment of temps in the United States during 1996 grew by 6.9 percent to 2.3 million, accounting for 1.8 percent of the workforce.

Steinberg says the association doesn’t keep separate stats for outsourcing, which he describes as “managed services,” such as when companies farm out non-core department hiring responsibilities. Departments outsourced often include payroll, mail room, cafeteria employees, security guards and year 2000 computer system conversions.

Andrea Edwards, a spokeswoman for StaffMark Inc. of Fayetteville, says that staffing agency placed 11,000 workers during 1997 in its nine offices in Northwest Arkansas. StaffMark’s placements are divided into three fields: 71 percent industrial, 27 percent office and 2 percent medical.

Don Marr, StaffMark’s executive vice president for operations in the western United States, says more companies are outsourcing through staffing agencies, but the company keeps no statistics on the practice.

“We are seeing more companies interested in outsourcing,” Marr says. “It’s a more advanced concept. It’s a growing market.”

Marr says StaffMark provides insurance and benefits to employees it places. Some people believe companies use staffing services because they don’t have to pay for benefits that way, he says, but, in most cases, the staffing agency pays the employees benefits instead.

Marr says staffing agencies can save companies money by providing trained personnel on short notice.

“The companies are able to bring in high-level expert skills for the scope of the project,” he says. “They would be incurring ongoing payroll costs if they had hired these people on.”

Hiring and later laying off employees after a project is finished could amount to higher unemployment taxes and bad media coverage, says Marr.

“I have seen it grow in the last 10 years,” Sherie Schneidewind, area manager for the Northwest Arkansas offices of Volt Services Group, says of outsourcing.

Volt, which has more than 300 offices nationwide, has locations in Springdale and Siloam Springs. Volt places employees in the following fields: clerical, light industrial, accounting, technical, computer and engineering.

Through the Northwest Arkansas offices, 80 percent of the employees are placed in light industrial and 20 percent are in the technical field, she says. About 100 potential employees fill out applications each week in the two Northwest Arkansas offices.

Schneidewind says companies benefit from the use of staffing agencies because they can often have a trained professional on the job the next day. If they had to advertise the vacant position, it would take at least two weeks — and possibly longer than a month — to fill the job.

Schneidewind says Volt has a national database that helps the company locate qualified personnel around the country. Those employees often relocate for a project, then return home when it’s finished.

“A lot of them are nomads,” Schneidewind says. “I’m always surprised at the number of them that will relocate for a contract position.”

Computer systems engineers are in “hot demand,” she says. Currently, Volt has eight openings for experienced systems engineers in Northwest Arkansas. “I think there’s a shortage here,” she says.

Schneidewind says companies in Northwest Arkansas usually want systems engineers with several years’ experience, and those people often must be brought in from other parts of the country.

Normally, companies pay relocation fees and good salaries to bring in qualified personnel for a particular project, she says.

“They don’t want kids out of school, usually, because it would take six months to train them,” says Schneidewind. “They often have to recruit people away from other companies.”

When overhead is considered, Schneidewind says, staffing agencies don’t make that much money.

“It’s a pennies profit business is what I call it,” she says.

“The staffing services are not just providing people,” says Steinberg. “We are providing the complete services.”

Ed Nicholson, a spokesman for Tyson Foods Inc. of Springdale, the world’s largest poultry processing company, says Tyson uses outsourcing but not usually for entire departments. Nicholson says Tyson leaves those decisions up to each individual plant rather than implementing them for the entire company. Separate plants often contract with other companies to maintain poultry processing or office equipment, he says. q