Facing up to the Rise of Temporary Employment and the Rules of the Game

Talent management (is about) hiring the best talent and getting rid of underperformers. – Amir Hartman

Rapid structural change in industry over the years, together with heightened global competition, has accelerated the relocation abroad of Taiwanese industry, increased factory and business closings and left the employment pattern poised for major transformation. Contingent or temporary employment practices, referred to as “manpower dispatching” in Chinese, have been widely adopted in this depressed climate, drawing heightened scrutiny from government, industry and organized labor.

Manpower dispatching is a three-way relationship between the employer, the temporary services firm and the dispatched employee. According to research commissioned by the Council of Labor Affairs (conducted by the Workers’ Education Association of China) on amending its proposed “Draft Manpower Dispatching Act”, the relevant definitions are as follows: Where a contract is established between a (manpower) dispatching organization and an organization requesting such dispatch, the dispatching organization will, with the prior consent of the worker being employed, subject to the terms of a labor contract, dispatch the said worker to the requesting organization. Once there, the worker will be under the direction and supervision of the requesting organization and will provide labor services accordingly. “Requesting organization” here refers to a corporate organization that adopts the manpower dispatching mode of employment; “dispatching organization” refers to a human resources organization that engages in manpower dispatching business.

Manpower dispatching has long been in use outside of Taiwan. Nearby countries like Japan South Korea and Singapore all have laws and regulations that spell out the rights and responsibilities of the three different sides. Early on in Taiwan, most of those adopting the practice were foreign companies, but a trend towards local companies also adopting dispatched manpower has grown rapidly in recent years. According to informal estimates, nearly 200,000 workers in Taiwan currently work through temporary services agencies, and the number is multiplying quickly. However, given the lack of rules in specific legislation, and with those involved in the business a mixture of the good and the unscrupulous, contentious disputes have emerged one after another. Moreover, a large number of workers and businesses have only a vague notion of what “manpower dispatching” entails, other than that it is a non-traditional employment method. Corporations ask what is good or bad about it in terms of workforce utilization. The worker considering temporary employment wonders what’s in it for him/her.

Overall, manpower dispatching has the following advantages:

• Greater management effectiveness
  The manager’s most important professional responsibilities must be to operate core businesses, provide leadership and look after employees, so as to help the company maximize its performance. However, in practice, much brainpower is usually wasted on all of the highly fluid non-core details of the business and managing the flow of paperwork. If these tasks can be outsourced, so that a consulting firm handles manpower dispatching, management will have much more energy and time to devote to managing core businesses and operations, thereby raising managerial efficacy.

• Added flexibility in workforce utilization
  In today’s industrial environment characterized by razor-thin margins and heightened competition, corporations all struggle to retain their flexibility. Whenever a worker asks for sick leave, annual leave, parental leave, maternity leave or family care leave, or when there is a manpower shortage due to a short-term, temporary increase in business, the corporation can make up for an insufficient or rigid allocation of formal staff by using fixed-term employment of dispatched manpower. Also, manpower dispatching features rapid and professional personnel recruitment and management that is perfect for satisfying a corporation’s project-oriented, short-term or high volume/high turnover manpower needs.

• Savings on indirect personnel costs
  The rise of worker consciousness, the gradual increase in mandated personnel costs, plus the proliferation of paperwork for management and high turnover rates in many non-core positions - all this often makes corporations spend heavily on personnel management costs, and even affects the performance of business-related work. Taking advantage of a corporate consulting firm’s effective personnel management and professional regulatory literacy can save a company a lot of indirect management costs.

• Task-oriented work
  Short-term and supplemental positions filled by dispatched manpower are work task-oriented, with clearly defined duties; they do get not involved in the organization’s factional disputes, and they will not squander energy on other activities within the company. Additionally, they can complete the job promptly, maintaining their requisite productive force and capacity. Responsibility for managing employee relations may also be shared with a management consulting firm, which helps the corporation maintain its competitive force in the marketplace.