Benefits Becoming Crucial in Recruiting Contingent Staffers

By Julie McCoy

Nov. 3, 2009

Ask temporary workers what they want these days, and one thing they’ll say is important is to be provided with benefits.

In this tough economic climate, many are coming to staffing agencies having lost their regular full-time jobs and their health insurance. If they happen to be single or can’t get on their spouse’s insurance, they want to work for a staffing firm that not only provides medical coverage but also makes it affordable—or at least more affordable than expensive COBRA premiums.

Many staffing firms are indeed offering health insurance as well as an array of benefits because they recognize that it is a great recruiting tool. It’s also a way to attract and retain workers.

Adecco partners with UnitedHealthcare to offer three to five different medical plans from which workers can choose, depending on which line of business they happen to be working in, says Adam Entenberg, benefits director. Those who work for Adecco General Staffing have a different set of plans from which to choose than those who work for Adecco Technical.

“We’re moving toward consolidating it [and offering a similar program for everyone],” Entenberg says. “We’re trying to standardize wherever possible.”

Additionally, workers can enroll in dental and vision plans and short-term disability insurance, which are offered through UnitedHealthcare, Entenberg says. Adecco also offers life insurance and accidental death and dismemberment insurance through UnitedHealthcare.

Workers who want to save money for retirement while they’re with Adecco can enroll in a 401(k) program through Wells Fargo. Another benefit Adecco offers is tuition reimbursement for workers who want to go back to school to learn new skills.

Early this year, Adecco began providing legal insurance through Transamerica. Workers who are closing on a house or want to have a will prepared can pay a premium to have access to a lawyer. Consultation with a lawyer is free, and for those who are preparing a will, the will is free as well.

Another service Adecco began offering this year is group accident insurance through Allstate, which pays workers if they are in a car accident. Adecco also offers critical illness insurance through Allstate.

Someone who is diagnosed with a heart attack or stroke, or undergoes bypass surgery, for example, can be paid benefits. Entenberg estimates that just less than 10 percent of workers are taking advantage of at least one benefit that Adecco offers.

At Manpower, workers can take advantage of various medical plan options through a national insurance provider, according to Mike Steinmetz, vice president and general manager of the company’s Midwest division. Those who sign up for the insurance have access to a nurse line and an employee assistance line.

Additionally, Manpower offers vacation and holiday pay, a dental plan, life insurance, accidental death and dismemberment insurance, and a 401(k) plan. Workers are eligible to receive benefits within one week of receiving their first paycheck.

“We believe it’s an advantage for both our associates and clients,” Steinmetz says. “We believe it’s a differentiator in the recruitment process, from competitors who don’t offer benefits or whose benefits aren’t as robust. We’re committed to providing valuable benefits options that our employees need and that assist us in attracting and retaining strong candidates for our clients.”

Express Employment Professionals provides medical, dental, vision, short-term disability and life insurance, also through a national provider, says Sam Fox, director of compensation benefits. Workers are eligible to sign up for the benefits immediately.

Fox estimates that about one-third of workers are taking advantage of them.

Workers also receive six paid holidays (after they have worked 500 hours) and paid vacations. They get two days of paid vacation after 1,000 hours, three days after 1,500 hours and five days after 2,000 hours. Employees can also enroll in a 401(k) plan, which doesn’t have a waiting period, according to Fox.

“We certainly do find it is helpful in recruiting and retention to offer benefits,” he says. “We have found that offering benefits [is] pretty doggone important to our clients too. So, our experience has been that offering benefits has been important with two very important groups: our employees and our client companies.”

Spherion offers medical and vision insurance through Aetna, according to Loretta Penn, the company’s senior vice president and president of staffing services. Additionally, workers can enroll in a life insurance policy and a stock purchase plan.

Also, Spherion offers service and retention bonuses, both of which are client-specific, Penn says. The service bonus is paid annually and is the equivalent of about a week’s worth of pay. About a third of workers qualify for the service and retention bonuses.

“It’s a unique time in the economy,” Penn says. “You have individuals who have been laid off, downsized. For those [who] fall into that category, they are looking for a company that will offer them a job and then, even better, a company that offers benefits.”

She adds: “[Offering benefits is] not only a great attraction tool but [also] it is certainly a great retention tool. It certainly represents both of those. Our goal is to make Spherion an employer of choice.”

Labor Finders provides a limited medical plan that is offered by Strategic Resource Co., which is part of Aetna, according to Jonathan Klorfein, director of client services.

“We basically did it because we value our workers,” he says. “We created this program to ensure their well-being and health—give them an option.”

The broker of the plan, McGriff Seibels and Williams, customized the program to meet Labor Finders’ needs, Klorfein says. Employees pay $20 a week for $5,000 worth of coverage for themselves, or about $60 a week for $10,000 worth of coverage for not only themselves but also their families. In some cases, clients have paid the cost, Klorfein says. Workers only have to work one day a week for the coverage to be in effect.

At SOS Staffing, workers can enroll in a health care plan called the American Worker Plan, according to Lynn Richardson, vice president of human resources. It’s “not a full-blown medical plan but provides front-end coverage,” Richardson says.

There are different levels of the plan that are different prices. The plan includes not only medical but also dental and vision coverage, no matter which level workers choose.

Additionally, workers can enroll in SOS’ 401(k) program. They also are eligible for a week’s worth of paid time off once they have worked a specific number of hours, which varies by region.

Yet, despite the fact that SOS offers these benefits, Richardson estimates that 10 percent or less of workers are actually taking advantage of them.

A lot of SOS’ clients ask if the company offers benefits because they want to know SOS has some way of retaining workers and making them happy, Richardson points out. And if workers are weighing the options of going to work for SOS or another staffing firm that doesn’t offer benefits, “we’re going to win that game,” Richardson says.

QPS offers a mini-medical plan, says Dan McNulty, executive vice president and COO.

“They like it,” he says. “It’s competitively priced. It’s affordable for sure. People find it really attractive.”

Employee Chris Darge—who didn’t have health insurance for himself or his two children—is thankful he can get it through QPS.

“Just the fact that they offered that was a huge plus,” he says.

In addition to medical benefits, QPS offers holiday bonuses that are distributed five times a year, and year-end bonuses that are paid out the week before Christmas, McNulty says.

“We don’t wait for our year to end and pay it in January,” he says. McNulty estimates the company spends $25,000 a year on year-end bonuses.

The Nelson Family of Companies offers medical insurance through three providers, including Blue Cross/Blue Shield and Kaiser, according to Debbie Beardslee, senior staffing supervisor.

“Many of the candidates we work with are in a position where they could not do it on their own,” she says. “I think that makes us more attractive as a staffing partner.”

Workers also receive holiday pay and bonus checks after 1,200 hours. The bonus checks are the equivalent of 30 hours of work, Beardslee says.

Akraya, an IT staffing firm, provides contract workers with medical and vision insurance through Kaiser Permanente and dental insurance through Premier Access, says vice president Narayanan Duraiswami.

Contract workers can also enroll in Akraya’s cafeteria plan, which is designed to save them 25 to 40 percent in taxes (depending on their income tax bracket) on out-of-pocket medical, dental, vision and day-care expenses. They’re eligible to participate in the cafeteria plan from the first day of their employment with Akraya.

Additionally, contract workers are eligible to enroll in Akraya’s 401(k) program after they have been with the company for a year. Each year Akraya matches their 401(k) contributions on a discretionary basis. In 2008, Akraya matched 25 percent of the first 6 percent of employee deferral. Duraiswami estimates 75 percent of contractors take advantage of the benefits the company offers.

Workway CEO Matt Johnston says the fact that his company offers a global cash card has been beneficial in its recruiting efforts. If Workway didn’t provide the cash card, it wouldn’t be able to pay people who want or need to be paid on a daily basis, he points out.

“It allows us to pay daily without stretching our resources,” Johnston says. “That’s the one thing we can prove we get most of our candidates from.”

Workway also provides referral bonuses to those who refer someone to Workway after that person has worked a specific amount of time.

“We’re constantly looking for more referrals,” Johnston says. “That’s where you find the majority of good people.”

While large and medium-sized staffing companies are more likely to offer benefits, many small staffing firms offer them as well. Small staffing companies that don’t offer benefits at all are missing out on an opportunity to compete with larger firms.

For small staffing companies that are reluctant to offer benefits because of the cost and time involved, outsourcing benefits to a professional employer organization would be one way to even the playing field with larger firms and to be distinguished in a positive way from other small firms.

Bloomington, Minnesota-based Award Staffing provides three medical benefits options through Essential StaffCARE, president Tom Thissen says.

Workers can choose from plans that cover just themselves, or themselves and their families. Award Staffing also offers dental coverage, vacation and holiday pay, life insurance, and short-term and long-term disability insurance.

Thissen says he has had clients tell him the benefits Award Staffing offers are better than the benefits they offer their own employees.

“It helps with not only attracting the right talent but also retaining the right talent. Health insurance is one of the hot items with employees right now, and this way they’re able to have that with us,” he says.

Reliable Staffing Services works with Essential StaffCARE to offer Mini Medical, which provides coverage up to $5,000, according to CEO Larry Kidd.

In addition to medical coverage, workers can add on vision and dental insurance through Mini Medical. There aren’t any restrictions on getting into the program. For example, workers don’t have to be employed a certain amount of time to be eligible.

“We certainly advertise it,” Kidd says. “I think it does make some difference. I’m not sure if people are coming in because of the benefits or the economy.”

The Accuro Group offers medical and vision insurance through a national paid-provider-organization provider, and dental insurance through another national provider, says president Jennifer Dunleavy. Accuro also offers life insurance administered through an outside agent.

“It has allowed us to build a recruitment and retention model. It’s really our responsibility to provide a level of support where they can support their families and be able to have a career,” Dunleavy says.

If your firm isn’t providing benefits, maybe now is the time to start. It’s a good way to attract new temporary workers and keep existing ones. Plus, it can help ensure that your organization remains competitive with all the other staffing companies that provide benefits.

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