Seasonal sense:
How to mitigate seasonal and
temporary recruitment risk
In today’s economy, seasonal and
temporary staff can be found in audit
offices as well as the shop floor and
in the ski resort. As companies strive
to have the exact amount of people
on board to fulfil fluctuating business
demand, finding optimal temporary
staff has become a priority for
many employers. So what are the
risks and rewards associated with
temporary staff and what steps can
organisations take to build a reliable
and flexible workforce to meet
seasonal as well as ongoing business
demands?
The use of temporary staff can also help to reduce the
fixed costs associated with labour hiring and recruitment.
Temporary workers, for example, represent a relatively
low cost method of screening for potential permanent
employees, monitoring their on their job performance
and culture fit. Recruiting permanent staff from a pool
of temporary workers enables businesses to ‘try them
out for size’ over a longer period of time than would be
possible under most probation schemes. Conversely,
for other employers, using temporary staff can be a
way of securing additional time to use for searching for
permanent employees.
Overview of the UK’s
temporary workforce
The risks associated with
seasonal and temporary
workers
According to the latest figures from the International
Confederation of Private Employment Agencies (CIETT),
the UK has the highest number of temporary workers in
Europe, with over 1.3 million temps working in the UK;
that’s around 5% of the UK workforce.
Since the 1970s, temporary staffing has expanded rapidly
to become a significant feature of many national labour
markets. Temporary employment, be it seasonal, ad
hoc or interim work, is now a permanent feature of the
business landscape and for many organisations, it is a
form of working that has become integral to business
strategy. Indeed, recent research from the University
of Manchester has found that the recession has led
many firms to have in place a ‘buffer’ zone of temporary
agency workers. During tough economic times, firms
may increase the proportion of their workforces which
are externally sourced from temporary recruitment
agencies as a means of managing the risks of any future
recessions. While for most firms, this strategy is a ‘short
term’ one, there is also evidence that it has developed
into a longer-term approach to workforce management.
Business advantages of
using temporary staff
Temporary staff can be quickly deployed to cope with
unforeseen demand, cover sickness, holiday absence and
maternity leave and provide extra support due to seasonal
demand like the Christmas rush or financial year end.
During times of recession, using temporary staff also
allows organisations, at least in the short term, to avoid
the costly need to sack permanent, core members of the
workforce.
In more recent years, there has also been a rise in the use
of independent contractors by organisations. Contract
workers provided added flexibility when a company
requires it. They can do one off jobs or provide a service
which no other member of staff can provide. In many
cases, they can often begin work at short notice which
helps employers to meet a sudden demand. The added
benefit for the employer is that they are not responsible
for their PAYE or national insurance contributions.
Clearly, hiring temporary staff offers a number of specific
advantages to employers. However, they do come in all
shapes and sizes. The good ones can help a company thrive
in the difficult times or offer valuable help and support at
short notice. The very best temporary workers are often
highly motivated, some seizing on the opportunity to gain
valuable experience and may see the role as a stepping
stone to a permanent position. Others may resent the
fact the role is not permanent, they might lack motivation
and commitment and could be detrimental to a company’s
business. At their very worst, a temporary worker may gain
employment under false pretences, which potentially could
have very serious repercussions.
The organisations which tend to have seasonal peaks
and a greater demand for temporary workers, also tend
to be organisations where these ‘seasonal’ or temporary
employees are most likely to have close access to
customers, either directly (in the case of retail and the
hospitality industry) or indirectly (in the case of call centres
or financial institutions). In both cases, the implications
of placing the wrong person in a temporary job could
be severe and have potentially high financial, legal and
reputational consequences.
Experian has found that organisations use temporary staff
and contractors while largely ignoring or being unaware of
the risks. While the timescales associated with recruiting
temporary staff are short, this should not be an excuse
for not carrying out appropriate background screening on
temporary staff. By doing so, these employers are taking
massive risks affecting their own organisations and the
public at large.
So what are the specific risks and
what implications do these have for
employers?
Legal right to work in the UK
Many organisations, which have fluctuating seasonal
and temporary demands, employ a significant number
of migrant workers. The immigration, Asylum and
Nationality Act 2006, makes it a criminal offence to employ
someone who is subject to immigration control and who
has no permission to work in the UK. In 2009, the UK
Border Agency imposed 2,210 civil penalties on employers
of illegal workers totalling £22.1m, almost double the
number of civil penalties issued in 2008.
With forged identity documents often very hard to spot
without specialist equipment or Scotland Yard level
expertise, the importance of electronic identity validation
and appropriate background screening should not be
underestimated when it comes to temporary employees
and complying with immigration legislation.
Meeting duty of care
obligations
The Corporate Manslaughter Act places a legal obligation
on employers to ensure that the staff they employ do
not pose a threat to themselves or others. For sectors
like retail and hospitality, ensuring that customers
have a safe and pleasant experience is critical to their
success but dependent on having honest, reliable and
trustworthy staff. In order to protect themselves from
legal and financial repercussions further down the line,
organisations must satisfy themselves that the temporary
staff they employ have the appropriate qualifications,
a full and valid employment record and no previous
convictions.
Threat of employee fraud
The possibility of hiring someone who may pose a direct
criminal threat may seem rare, but the fact that the
value of reported fraud in the UK has increased by 153%
since 2003 reminds us how serious a threat this is to UK
businesses. The latest figures from CIFAS, the UK’s
fraud prevention service, show a substantial rise in the
number of cases of employee fraud identified in 2009
compared to 2008. CIFAS also reports an increase in the
number of cases of employees selling personal data. The
implication of this finding is that more staff are being
approached by organised criminals and bribed to reveal
personal customer data. Indeed, it has been claimed
by the police that one in ten of Glasgow’s financial call
centres has been infiltrated by criminal gangs.
Clearly, organisations which hold large data repositories
or deal with sensitive financial information are at
greater risk from insider fraud. In these days of identity
theft, criminals will pay a healthy price for personal
information and the temptation for someone in financial
difficulties is clear. For these organisations, temporary
or contract employees are often the biggest threats when
it comes to employee fraud. Generally, they have less
to lose, have less loyalty to the company and can also
have wide access to sensitive customer information.
Fraudsters are also more likely to obtain entry to an
organisation through temporary or contracting roles
where background screening may be lax or often nonexistent.
When it comes to combating employee fraud, these
organisations should consider developing an employee
screening policy which includes carrying out identity
checks, credit checking and criminal record checks
specifically on temporary and contract staff and not just
those in permanent positions.
Top tips on seasonal
recruitment:
• Don’t rely on the recruitment agency’s screening
process - organisations should also undertake internal
background screening of temporary applicants
• Build a temporary talent bank – consider prescreening a group of recurring ‘seasonal’ employees who
come back during the busy periods
• Use background screening to deter timewasters
and potential fraudsters - Experian’s own experience
has found that it’s not uncommon for as many as 15 per
cent of applicants to drop out when made aware that a
thorough background check is used in the recruitment
process
• Effective workforce planning - plan well in advance for
busy periods and line up a pre-screened workforce that
can be called upon at short notice
• Outsource the background screening process – not
only will this save time and money but will also ensure
legal obligations are met
Contact us:
Online at: www.backgroundchecking.com
Email: [email protected]
Call: 0844 481 5873
© 2010 Experian Ltd.
All rights reserved.
The word ‘Experian’ is a
registered trademark in the
EU and other countries and is
owned by Experian Ltd. and/or
its associated companies.