Temporary Agency Work, the Changing Employment Relationship and its Impact on Human Resource Management

Abstract

The increasing use of temporary agency work in Germany has implications for the nature of the employment relationship. The notion of a clearly defined employer-employee relationship becomes difficult to uphold in triangular relationships like in the case of temporary agency work where the agencies employees are working at the site of the client company. The blurring of the boundaries of organisations and of the employment relationship leads to ambiguities that affect Human Resource Management. Given the dominance of new institutional economic approaches in the analysis of temporary agency work, it is not surprising that the ambiguities and the effects and consequences of the use of temporary agency workers on the Human Resource Management of client companies have been underestimated and not been explored in detail. This paper wants to close that gap by adding a Human Resource Management perspective to the current debate in order to gain insight on the role of Human Resource Management in triangular relationships. By building on theoretical discussions and empirical studies the implications of the use of temporary agency workers for the Human Resource Management of client companies are analyzed with a special regard to commitment and identification with the client company. Different suggestions how to organize Human Resource Management instruments for temporary agency workers are presented to illustrate the value of a diverse Human Resource Management for different groups of the workforce. Key words: Temporary Agency Work, Employment Relationship, New Institutional Economics 1. Temporary agency work as an example of non-standard employment relations The notion of a clearly defined employment relationship becomes difficult to uphold as changes in the organization of work facilitated by technological improvements have blurred the boundaries between standard and non-standard employment relations. Consequently, non-standard employment relations such as temporary agency work have become increasingly prominent ways of organizing work in recent years (Nienhuser/Matiaske 2003: 467; Bothfeld/Kaiser 2003: 489; Jahn/Rudolph 2002: 1ff.). There are many different terms used in the literature to describe non-standard employment relations (Kalleberg 2000). For example, non-standard employment relations have been referred to as flexible staffing arrangements (Abraham 1988, Houseman 2001), market-mediated arrangements (Abraham 1990), flexible working practices (Brewster et al 1997) or more generally as atypical employment (Delsen 1995; De Grip et al 1997; Cordova 1986). However all definitions imply that non-standard employment departs from the standard work arrangement. Standard work arrangements are generally associated with full-time positions that are based on an indefinite contract and are performed at the employer's site under the employer's direction (Muckenberger 1985: 429; Bosch 1986: 165; Talos 1999: 417/418; Rogowski/Schomann 1996: 224ff). Though, global economic changes, increased competition and uncertainty among companies put greater pressure on them to push for greater profits and more flexible work arrangements, non-standard employment relations are not new. There have always been employment relations that did not fit the standard model of full-time work (Peck 1996). This is also true for temporary agency work that first emerged in the United States after the second World War (Mitlacher 2004: 9). As an example of a non-standard employment relation, temporary agency work involves the externalisation of administrative control and responsibility (Pfeffer/Baron 1988). Temporary work agencies employ workers and hire them out to a client company where they work at the client's premises and direction while the agency charges a fee for this service (Kalleberg 2000: 346). This creates a triangular relationship where a worker establishes connections with different companies (Bronstein 1991; Vosko 1997). The following section illustrates the recent development of the temporary work industry in Germany. …