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Labor:
High-Tech Firms Rely More
On New Breed of Temp Worker
By Omar L. Gallaga
 
07/31/96
The Wall Street Journal
Page B1
(Copyright (c) 1996, Dow Jones & Company, Inc.)

Alex Chuang calls himself "a risk-taking entrepreneur." Others might say he's just a high-tech temp.

Either way, he is much in demand. Mr. Chuang, who monitors phone-network traffic and analyzes cash flow for MCI Telecommunications Corp., has had his six-month contract renewed eight times. Demand for high-tech temps "is exploding. They can't find people fast enough," he says.

He is part of a new class of temporary worker -- skilled in new technologies and highly educated. As big technology companies like Digital Equipment Corp. and AT&T Corp. pare down their permanent staffs, they are relying more on temps to write computer code, test programs and manage projects during busy times.

The sudden demand for technology workers is changing the face of the temorary-help industry, which brings in $39.2 billion a year. The industry payroll for technical and professional temp workers soared to $4.9 billion last year from $2.2 billion in 1991, growing faster than the payroll for office and clerical temps.

As a result, temp firms are scrambling to find short-term specialized help. As its information-technology business has grown 40% in the last year, to $400 million, Milwaukee-based Manpower Inc. has had to increase its advertising, put up Web sites with job listings and pay referral bonuses for skilled workers.

CoreStaff Inc., of Houston, has acquired four high-tech temporary-employment firms since January and has 2,000 technology temps, but it can fill only half the requests of clients like AT&T, MCI, and Lucent Technologies Inc. "It's an all-out war to find people," says Mike Willis, CoreStaff's chief executive officer.

Mr. Chuang agrees. "As long as I'm valuable, I will always get a contract," says the temp worker.

The competition is bidding up temp workers' pay and benefits. In addition to fat pay packages, health insurance and paid vacations, many temp firms offer retirement plans and stock-purchase options to attract talented techies. White-collar, full-time hourly temporary workers earn an average of 2.4% more than their permanent counterparts, a 1995 study by the Federal Reserve Bank in Chicago concluded.

Gifford Scott, 34 years old, who works for Manpower Inc. and currently is developing software for Northern Telecom Inc., says his annual pay doubled to around $100,000 after he left his full-time job and became a temp. A telecommunications engineer with 12 years in the business, Mr. Scott left AT&T in Canada to live in Raleigh, N.C., where there were more opportunities in his field. "With my skills and the [geographic] area I'm in right now, there's a critical mass of companies that need the secondary market of contract work," he says.

High-tech companies say hiring temporary employees gives them more flexibility. "There's no sense in hiring hundreds of computer people who are really busy for a season and then being hard-pressed to provide them work to do until that season rolls around again," says Burke Stinson, an AT&T spokesman. Seasonal work for AT&T temps includes data-processing during tax season and extra help when demand for a product exceeds expectations. AT&T has an in-house temporary agency that employs about 1,000 workers and also brings in up to 5,000 temporary workers on some days.

Of course, relying on temp workers has its drawbacks for businesses. For one thing, they must rely on staffing companies to screen candidates and test their skills. Companies that hire temps for short-term projects may find that those same workers will be elsewhere when follow-up work is needed. Moreover, retaining needed temps can be as challenging as recruiting them, since it's hard to build corporate loyalty among workers who spend their days bouncing from company to company.

Mike Volte, 42, who tests Internet hardware in Raleigh, says that he was working on a job at Northern Telecom through another staffing firm when Manpower offered him a position at Cisco Systems Inc., a networking supplier. "People were banging down their door" to work at Cisco, says Mr. Volte, who gave a week's notice and broke his contract.

But the temp market doesn't offer opportunity for every worker. The temps that are most in demand are those with years of tech experience. And these temps have to keep their skills sharp and market themselves aggressively to land the big contracts. Markets for technological specialties can blow hot and cold. And the usual temp complaints apply: It's uncertain and often means moving from city to city.

Still, many of the workers like the freedom, saying they're less likely to get bored. "In contracting, you have the choice to try out different things," says Mr. Chuang, 38. He adds, "I'd rather have more control over my destiny."

And James Huggins of Dallas, who has done everything from technical writing to computer coding in his 27 years as a temp, says he worries less about being fired than his colleagues with traditional jobs. "We all have temporary jobs," he says, "but I know mine is, and other people don't."