1. The globalization of temporary staffing
One key strand of our research examines the globalization of the temporary staffing industry from the late-1990s onwards. By the end of 2007, the top 20 transnational staffing agencies were all earning annual revenues of over US$150m from outside their home markets, the top six were earning over US$1bn, and the top two – Manpower of the US and Adecco from Switzerland – over US$10bn, substantial increases on the figures from only a decade ago.
This growth reflects a newly extensive geography of operations for these leading agencies: from their bases in the established markets of North America and Northwest Europe, they have expanded into a wide range of so-called ‘emerging’ markets across Latin America, East Asia and Eastern and Southern Europe. This growth has profound implications for the conditions under which workers around the world labour and the ways in which national governments regulate labour markets.
Our research seeks to identify, map and monitor these leading transnational agencies and to explore the growth strategies and organisational structures that have supported their ongoing globalization. It also seeks to explore the dynamic intersections of the activities of transnational agencies with the specificities of distinctive national markets (see theme 2).
Lead researchers: Neil Coe, Jennifer Johns and Kevin Ward.
Funding: British Academy, Rockefeller Foundation and an ESRC large grant.
The temporary staffing industry provides a compelling sectoral case through which issues of service sector globalization can be explored. Temporary staffing agencies are a form of labour market intermediary, meeting the needs of client companies for contract workers of many kinds. While in the early 1970s the industry was only really visible in the US, and the European markets of the UK, France and the Netherlands, the industry has now become truly ‘global’. Consolidation of the industry in its core markets of North America and Western Europe has been accompanied by substantial growth in the remainder of Western Europe, and most recently, in the emerging markets of Eastern Europe, Latin America and East Asia. According to a recent study, the global temporary staffing industry is now worth some US$120 billion annually (Staffing Industry Analysts, Inc, 2003). At the global level, the industry is heavily concentrated, with an elite group of American, and to a lesser extent Western European, agencies dominating international investment in the sector. Such investment has accelerated since the mid-1990s, with all the leading agencies seeing a significant fall in the share of revenues derived from their home country. To give one example, Adecco, the largest agency globally with annual revenues of over US$12bn, expanded its overseas revenues from 18 to 70 percent of the total over the period 1995-2000. Despite the work on who does the temping (Parker 1994), on the terms and conditions of temporary staff (Rogers, 2000), on the reasons why client firms use temporary staffing agencies (Ward et al., 2001), and on the gendered effects of temporary staffing (Vosko 2000), very little is known about the organisational geographies and strategies of these major transnational corporations. Equally, while our understanding of the temporary staffing industry in the two core markets of the US and the UK has advanced considerably in recent years (Theodore and Peck, 2002; Ward, 2003), information about the temporary staffing markets of other countries, and the role that the leading transnational agencies play in their development, remains sparse.
In addition to the sheer scale and degree of internationalisation of this sector, there are three additional reasons as to why a sectoral study is prescient:
- First, preliminary research suggests there are interesting and complex geographies to the globalization process in this sector. In established markets, agencies are seeking to make greater inroads into the business of client companies and thereby become structural rather than cyclical tools of labour management (Ward, 2003). In developing markets, by contrast, their immediate concern is the construction of markets and gaining, and then protecting, market share (Peck et al., 2003).
- Second, while much of the literature on service internationalisation has focused on the initial importance of following transnational manufacturing clients, the overseas expansion of temporary staffing seems to be more tied to the globalization of other service sectors such as finance, healthcare, telecommunications and IT, thus revealing interesting inter-sectoral dynamics. Relatedly, the emerging evidence of ‘global’ agreements between agencies and their clients also warrants further investigation.
- Third, the temporary staffing industry plays a strategically important role in delivering labour market flexibility to an increasing range of sectors across the economy as whole. Hence, the sector’s geographical expansion has been intimately shaped by the geographies of neo-liberal labour market deregulation at both the national and macro-regional scales.
The over-arching objective of this research has been to contribute to the theorisation of service sector globalisation through a sector-based case study. The more specific objectives of this project can be grouped under two broad dimensions:
The ‘horizontal’ dimension — Mapping the global temporary staffing industry
- To identify the leading ‘transnational’ temporary staffing agencies, and to map their activities at the global, national and urban scales;
- To undertake a comparative analysis of the geographical growth strategies (e.g. motivations, mode of entry, degree of localisation, post-entry expansion, branding etc.) of transnational temporary staffing agencies;
- To undertake a comparative analysis of the organisational structures (i.e. the GPNs and scales of integration therein) of transnational temporary staffing agencies.
The ‘vertical’ dimension — Embedding the global temporary staffing industry
- To explore how the activities of transnational temporary staffing agencies in particular countries are embedded in the wider production networks of the firm;
- To explore how the activities of transnational temporary staffing agencies in particular countries are both embedded in, and shaped by, the political-institutional and competitive contexts in which they are operating;
- To investigate the wider regulatory consequences of the expansion of the temporary staffing industry: i.e. to unpack the extent to which these agencies are informing the ‘flexibilisation’ of labour markets in different national contexts.
2. National varieties of temporary staffing markets
Inspired by, and yet critical of, approaches that seek to identify different ‘varieties of capitalism’ within the global economic system, our second strand of research endeavours to understand the persistent distinctiveness of national temporary staffing markets.
We conceptualise national staffing markets as complex institutional fields not only shaped by the activities of leading agencies and direct industry regulation, but also by labour market regulation more generally, the nature of welfare state provision, union activities, and the geographical form and sectoral structure of the economy. The place of transnational agencies within this field is highly variable: while in some contexts transnational staffing agencies are driving market growth, in others they are mediating it, and in some they are largely responsive to conditions set by domestic agencies and regulators.
Such a perspective enables us to reveal important differences between what on face value appear to be highly similar markets (e.g. neoliberal contexts such as the US and Australia). Conceptually, our approach is to challenge simplistic typologies of national systems (e.g. neoliberal versus social democratic) and to develop more fine-grained and dynamic analyses of national temporary staffing market formation and differentiation.
A European cross-national comparative study (2008-2011)
Lead researcher: Jennifer Watts.
Funding: ESRC CASE studentship in partnership with the Adecco Institute.
The temporary staffing industry is a fast growing and increasingly global industry, accruing worldwide revenues of some US$250bn in 2005. At the global level, the industry is heavily concentrated, with an elite group of some 20 American, Western European and Japanese agencies accounting for 39 percent of the market. Five agencies in particular – Adecco, Manpower, Vedior, Randstad, Kelly Services – are driving globalization in the sector. We are only now starting to gain an understanding of the organisational and growth strategies of these leading transnational agencies (e.g. Coe, Johns and Ward, 2006). The importance of the temporary staffing industry, however, goes beyond its basic size as a sector. Given the wide range of sectors in which agencies place workers, and their role in delivering economy-wide labour market flexibility, temporary staffing agencies need to be conceptualised as active intermediaries in national labour markets. As Peck et al. (2005: 4) argue, in liberalizing economies in particular, ‘staffing firms are not simply supplying services: in their role as private labour market intermediaries they are a major new institutional presence’. Moreover, due to the inherent localness of labour markets and their regulation, temporary staffing is a necessarily highly territorially embedded form of economic activity. Very little is known, however, about these complex interactions between the temporary staffing industry and the different political-economic and regulatory contexts in which it is embedded. This is particularly true beyond the UK and US contexts where much of the existing research into the industry has taken place (e.g. Ward, 2003). This study aims to the explore position and wider role of the temporary staffing industry in three different national political-economic systems.
Drawing upon notions of varieties of capitalism and different kinds of national labour regimes (e.g. Boyer and Hollingsworth, 1997), we can select exemplars of three different kinds of regime within Europe:
- Neoliberal labour regime: The UK will be used as an exemplar of a neoliberal policy environment in which labour markets are characterised by short-term employment relationships, low levels of unionisation, individualised and competitive employment relations, high levels of labour market inequality, and strong private sector involvement in placing workers in employment;
- Corporatist labour regime: Germany will be used as an exemplar of a corporatist policy regulatory context characterised by significant human capital investment, medium-term employment relationships, high standards of employment protection, low inequality, strong union representation in a tripartite system, and strong public sector involvement in placing workers in employment;
- Post-Socialist labour regime: The Czech Republic offers an example of a post-socialist labour regime that has undergone profound and rapid change since 1990, in which a central command economy characterised by full and yet under-employment has moved somewhat unevenly towards a flexible, market-based labour regime, with the result being increased levels of unemployment and inequality. Such labour regimes are generally institutionally ‘thin’ compared to the previous two categories, with a fledgling range of private sector agencies emerging to place workers in employment.
These differences in labour market regime will clearly influence the form, size, nature and overall significance of the temporary staffing industry. In particular, the role of placing people into employment will be undertaken by different combinations of private and public sector agencies and intermediaries in the different regimes. In turn, the extent to which the temporary staffing industry can play a role as an active agent of change will also vary.
This research project seeks to explore the role of temporary staffing agencies within the wider landscape of public and private sector labour intermediaries, and how and why this differs from country to country.
The more specific objectives are:
- To explore the role of the temporary staffing industry in three contrasting political-economic contexts;
- To position temporary staffing agencies within the wider landscape of labour market intermediaries in those contexts;
- To understand how the activities undertaken by agencies – e.g. types of workers placed, sectors in which they are being placed – are shaped by the national context;
- To illuminate the interactions and interdependencies between temporary staffing agencies and other public and private sector labour intermediaries in different national contexts;
- To explore the varying capacity for the temporary staffing industry to act as an active agent of labour market change in different contexts;
- To evaluate convergence tendencies, if any, between the temporary labour systems of different national contexts.
3. Profiling the UK temporary staffing market
Our fourth strand of research focuses on the emergence and growth of the UK temporary staffing industry. Theoretically, its point of departure is to focus on the agency of agencies. That is, to conceive of temporary staffing agencies as active labour market intermediaries. In the UK, we argue they have been emblematic of a wider redrawing of employment norms.
Post 1940s expectations around regular working hours, career progression within a single organization, paid overtime and holidays and so on have slowly been undermined. We argue that agencies have both contributed to this systematic restructuring of the UK labour market as well as benefiting from it in terms of experiencing a growth in the markets for their business. And yet despite their presence in the UK since the late 1950s, the role of temporary staffing agencies up and down the country has tended to be ignored.
This on-going research takes seriously then the place of agencies alongside other labour market institutions in shaping the kinds of labour markets experiences workers of different sorts experience in the current UK labour market.
Lead researcher: Kevin Ward.
Funding: British Academy and the University of Manchester.
Temporary staffing agencies play a considerable role in the production of what more broadly has been termed ‘contingent work’. To some researchers this labour contract reflects the leading edge of a new regime of precarious employment (Allen and Henry 1996; Bauman 2000; Beck 2000). Here employment relationships are individualized and greater work-time instability and systemic underemployment ensue, with significant implications for both labour markets and workers. At the centre of this new regime are temporary staffing agencies. These act as intermediaries (Mangum et al. 1985; Peck and Theodore 1998) and facilitate the creation of temporary employment. They shape the social distribution of work, affect the career-pattern of workers and increasingly are charged with delivering a range of human resource functions. Existing studies have focused on a number of trends. They have examined the patterns of temporary employment (Dale and Bamford 1988; Sly and Stillwell 1997; Tremlett and Collins 1999), the rights and benefits attached to temporary employment (General Accounting Office 2000; Income Data Services 2000), the experiences of workers placed through temporary staffing agencies (Garsten 1999; Rogers 2000) and the management issues around this group's use (Cooper et al 1995; Ward et al 2000). So far, however, there has been little research in the UK, or beyond, on the placed effects of the expansion of the temporary staffing industry. In particular, on how temporary staffing agencies influence the construction, regulation and segmentation of urban and suburban labour markets.
The growing presence in the labour market of temporary staffing agencies is, of course, not just of concern to academics. Contingent work is also an important political issue in Europe. Last summer European employee and employer unions agreed to participate in EU wide negotiations on employment managed through staffing services agencies. Following on from the re-regulation of part-time and fixed-term contracts, this type of contingent work is one of the last employment forms to be regulated at an EU level. On the other hand there is less of a consensus in the US over the need for re-regulation, despite decades of debate over the size and the form of contingent work (Barker and Christensen 1998; US General Accounting Office 2000; Polivaka and Nardone 1989). Yet in spite of future regulatory differences, there is more agreement in both the UK and the US over the growing importance of the staffing services industry in contemporary labour markets. So, for example, it is largely accepted that by the end of last year nearly 40% of the British workforce and more than half of the American workforce will be in one form of non-standard employment or another. Prefiguring last summer's flurry of EU activity, the UK government recently issued a consultation document on what it referred to as the Private Recruitment Industry. This document set out the current legal regulatory framework and the contemporary characteristics of the Industry, and outlined a series of proposed changes. Over the last six months the Industry's trade association, the Recruitment and Employment Confederation (REC) has responded to these proposals. It has argued that they will reduce the flexibility of the UK labour market. The Trade Union Confederation (TUC) and single-sector unions such as the Communication Workers Union (CWU) on the other hand, have voiced their concerns over the growing influence of staffing service agencies. In particular they point to the lack of benefits and rights attached to workers placed through temporary staffing agencies and the apparent opaqueness of the ‘triangular’ relationship between the temporary worker, the staffing services agency and the client company.
The focus of the project is twofold: (i) to set the national context through mapping the UK staffing services industry. This will both be a quantitative exercise, drawing upon existing data sets, and a qualitative exercise, drawing upon interviews with key national figures and; (ii) to establish what this formal and informal regulatory structure means for the organization of British urban labour markets. The comparative focus will allow me to draw out similarities and contrasts between contingent labour markets in different areas of the UK. The study will provide a series of insights into the employment conditions and strategies that are behind the expansion of the UK staffing services industry.