According to the Bureau of Labor Statistics, about 2.5 percent of today's U.S. workforce are people in temporary jobs, up from less than 1.0 percent ten years ago. During that time, the temporary workforce itself has changed: highly educated professionals have joined the temp agency standbys, secretaries and clerks.

"Any position can be filled on an interim basis—from ditch digger to CEO—and even very narrow niches," says Steve Berchem, vice president of the American Staffing Association. Today, even scientists work on a temporary basis, and that new availability is a tremendous boon for companies that need to be flexible during product development or swings in the marketplace.

The advantages to using temps seem obvious: the company gets the skilled workers it needs immediately without going through the recruitment process; employers can structure a workforce that responds immediately to upswings and downturns in business; and perhaps particularly important in today's economy, temps can be let go without the demoralization of downsizing. Another bonus: using temp workers usually relieves supervisors of many administrative duties such as negotiating pay raises, coaching performances, taking disciplinary actions, scheduling vacations, and so on.

Though temp agencies can ensure a reliable pipeline of qualified workers and relieve HR from part of its administrative workload, temp workers remain HR's responsibility. As always, written policies and a solid understanding of both legal and human capital issues will help HR avoid problems within a blended workforce.

Temps Are Cost Effective

HR understands the impact of a bad hire: wasted recruiting dollars, along with impaired productivity and performance from the employee, and perhaps lowered morale for a whole department. As a result, some companies like to "try out" workers before they make an offer for permanent employment; temporary assignments provide the perfect opportunity to do that. Peter Brixius, vice president of Troy, Michigan-based Kelly Scientific Resources (KSR), the world's largest provider of scientific staffing professionals, says that KSR often sees its workers converted to permanent staff.

"This doesn't bother us at all—we know that at least 50 percent of our workers want to convert to full time," says Brixius. "We tend to believe that when those converted workers become hiring managers in a few years, they'll come back to us for services because they know they'll get high-quality personnel."

Pamela Curtis, recruiter, with Regeneron Pharmaceuticals in Tarrytown, New York, says that her company sometimes uses temps to "feel out" a permanent opportunity. "Sometimes we go into it with that purpose," Curtis says. "We tell the agency that the person may be evaluated for a permanent position. Later, if we want to make the offer, we ask the worker to go through the same application process as any other person. We find that a vast majority of temp workers are truly looking for a permanent job."

Otherwise, Regeneron uses temps for their more usual purpose: to fill in gaps for leaves or unplanned departures. "Our need for temps has gone down, which is a reflection of our organization and where it is in development," Curtis explains. She says that her company usually needs a specific number of people for a specific amount of work, and plans accordingly.

"We're making sure HR is driving the process, and that we're not using temps just to get a little extra help," says Curtis. "Temps have a strict limit of three months—otherwise the case for a longer stay has to go to the CEO."

HR departments usually find a real benefit when staffing agencies take on recruiting efforts and expenses for them. "We interview and classify scientists every single day, and that's all we do," says Brixius, and points out that KSR's recruiters are also scientists. That's a level of expertise a typical HR department might find hard to duplicate.

Many staffing agencies also provide temp employees with benefits after a certain number of hours. These benefits can help bring temporary staff up to a rough parity with permanent staff, and lessen feelings of unfairness and exclusion for temps. And since customer satisfaction depends upon workers who can move into positions with little prepping, many agencies provide training for their staff, as well.

"With our (three month) policy, we don't have the time to bring people up to speed," says Curtis. For that reason, her company uses entry to mid-level research associates for temp work. She adds that as position requirements increase, "there's more you need to know about the company itself to be successful."

Her observation touches upon a feeling in some companies, though not all by any means, that certain positions are best kept to permanent staff. "The trend I've seen is toward hiring a number of core employees-core to the function and critical to the future-on a permanent basis, and then bringing in project groups as needed," says Berchem.

Temps can save companies money by preventing bad hires, filling in positions before productivity suffers, and by giving HR back time and money that might have been spent in recruiting. Companies sometimes find that they also save money on benefits they would ordinarily pay to permanent employees.

"Temps are used to fill interim vacancies or meet increased demand-saving money is way down on the list," says Berchem. "But, of course, there may be savings in long-term retirement, stock options, and other long-term benefits."

A Few Sticky Issues

Employers walk a fine line when it comes to blending temporary workers with their permanent staff. On the one hand, they need to direct a temp's work and create a hospitable workplace environment. On the other, they need to ensure they don't treat temps like permanent workers. HR must sort out many questions with their company's legal counsel concerning likely or troublesome scenarios.

For instance, perks that improve morale or enable permanent staff to work more efficiently may be inappropriate to offer temps. Should temps be allowed to use the company gym, store, or cafeteria? Will a morale-boosting event like an office birthday party help temps feel like "part of the team" or will the gesture fuel the idea that they're really employees? Will temps feel insulted and demoralized if they're left out?

Another issue concerns the exact nature of the employer/employee relationship—where does reasonable control for the company end, and actual employment begin? When companies "try out" temps, or need to use them for long-term projects, will their lengthy employment give them rights to benefits that permanent workers receive? Will company-sponsored training for temps create a perception of employment? Does a supervisor have the right to dismiss a temp for a safety infraction—or does that action make the temp an employee?

"There is a co-employment relationship," says Berchem, "and what that actually means depends on the particular law in a situation. In a case of workplace harassment, for instance, both the staffing firm and the company using the temp could be held liable."

The concept of "employment" or "co-employment" generally centers on control, say experts. The more control an entity exercises in areas like wages and benefits, scheduling, training, and work activities, the greater the case can be made that the entity actually employs the worker. For the most part, companies shouldn't train their temps, discipline or dismiss them, negotiate their wages, or participate in other typical "employer" functions.

"Companies will come across issues with workers just like they do with company employees," says Brixius. "But it's a good idea to work these things out through the agency, rather than take on something like progressive discipline, yourself."

Employers should also set up clear differences between temporary and permanent staff. This means that temporary workers should ordinarily be excluded from using company facilities like gyms and stores. Rewards and recognition, which temps may deserve through exemplary work, should come through the staffing agency rather than the company. Even badges or other employee identification should be differentiated from that of permanent staff.

"And benefits plans," says Berchem, "should be written in such a way that they exclude workers the employer doesn't want included."

On the other hand, companies are likely to be held responsible to some degree for violations of law that cover almost all employees, such as safety, harassment and discrimination, and wage and hour laws. HR must make certain that supervisors and permanent employees aren't under the impression that protections that apply to them don't apply to temporary staff as well. For the most part "just a temp" is a legal myth—temps enjoy the same legal protections as permanent employees, experts stress.

The points given above are for information only and shouldn't be construed as legal advice. Always be sure to consult your own attorneys for assistance with your company's specific situation and needs.

HR Should Take The Lead

Though temporary workers don't come worry-free, HR involvement and oversight will usually prevent serious problems for the company. "HR should ask for the ability to audit," says Brixius. "Watch the screening process, for instance. Or, if you have any concerns about intellectual property, have agreements in place. Then make sure that the agency is collecting the appropriate documents and that employees are signing them."

HR should have the right to audit anything for which they may be held responsible or in which they have a legitimate interest: workplace harassment training, criminal/background checks, safety compliance, hiring practices, etc.

After that, a review (with legal counsel) of language within benefits plans, company handbooks and other policy documents, along with supervisor training, should keep companies on the right side of the thin line separating temp and permanent staff.

Carla Joinson is a Stafford, Va.-based writer specializing in human resources and management topics.