Staffing Firms Not Welcome Here

Are staffing firms being barred from setting up shop in Illinois?

Recently, two staffing firms seeking to open offices in Joliet, Ill., were denied permission to do so. Joliet requires “special use permits” for staffing firms, forcing them to get approval before opening shop.

At a recent city council meeting, representatives of Innovated Staffing and HR Metrics argued their firms would bring full-time jobs to the city. One indicated wages would be between $10 and $18 per hour, while the other claimed workers would be eligible for health benefits after 90 days.

However, opponents came out in force for the Nov. 5 meeting, voicing concerns ranging from the jobs being low-paid warehouse work to staffing agencies only serving as a way for large companies to get out of paying benefits.

An attorney for Innovated Staffing, John D’Attomo, stressed to the council that the business was not a day labor firm and had already placed 147 citizens of the city into jobs. The company would also fill an office space that is vacant.

HR Metrics representative Sonia Diodato appealed to the council not to lump her firm in with others.

“We’re not in the business of using and abusing,” Diodato said at the meeting.

But opponents were not swayed: “There’s a problem at warehouses; there’s a problem with staffing agencies,” Roberto Jesus Clack, associate director with Warehouse Workers for Justice, told the City Council. As for wages, Clack said, $10 to $11 per hour isn’t enough to support a family, and he raised labor standards concerns.

Council members asked several questions of staffing firms and opponents at the meeting, which was video recorded. How many workers go on to permanent status? Do the staffing firms have any warehouses as clients? However, members made no comment when rendering their final vote, with a majority rejecting permits for the staffing firms.

Is this a moratorium?

Joliet is the third-largest city in Illinois. Nestled in the Chicago metropolitan area, it features several warehouse operations, including facilities for Amazon and Mars. In a report, city staff noted it couldn’t find another jurisdiction with a similar permitting requirement. Interestingly, there are nine other staffing offices in town already, according to city staff; Clack’s organization puts that number at 14.

Clack considers the vote a big deal, telling The (Joliet) Herald-News newspaper it would give his organization time to work with the city and ultimately have a certification program for staffing firms.

But whether this move will matter remains a question.

The American Staffing Association is not aware of any other similar rule in other jurisdictions, Senior Counsel Edward A. Lenz told me in an email, noting the ruling is misguided, having no basis in logic or economics.

“Placing a moratorium on the number of new staffing firms in a market is a purely anticompetitive action that only benefits existing firms to the detriment of new entrants,” Lenz wrote to me. “It will not benefit the workers or affect how many are employed by staffing firms.”

Meanwhile, staffing-side attorney George Reardon said licensing and certification of staffing firms is not a new idea, but it has not gotten much traction overall.

And government intervention in staffing has occurred before, he said. Several years ago, the federal government provided funding to offer free personnel services. Some local agencies using the funds said they would put staffing firms out of business. Reardon told me the staffing industry fought back against the funding which eventually ran out.

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As for the situation in Joliet? “The Joliet action may be challenged legally, but the police power of state and local governments is strong,” Reardon said.

For sure, wages and working conditions are important. But it is apparent that staffing still has its work cut out for them in overcoming negative perceptions regarding both.

Research from Staffing Industry Analysts earlier this year found that temporary workers tend to hold their staffing firms largely responsible for what happens on client sites and view their “overall experience as being in the hands of the staffing firm” — for better or worse.

Interestingly, that same research found that temporary workers gave their staffing firms a Net Promoter Score of 42%, which is considered good and on par with companies such as American Express. However, production/manufacturing workers represented only 4% of the workers surveyed for that report; others were in IT, healthcare and other segments.

And while it’s the staffing firms that faced the city of Joliet and its residents, it’s actually client companies that oversee working conditions and that ultimately decide how much they will pay based on market condition. But could wages be going up? Recently, a University of Michigan study forecast wage growth of 3.7% in 2019 and 4.4% in 2020. And Amazon in October announced a $15 minimum wage.

 

Craig Johnson

Craig Johnson
Craig Johnson is senior managing editor at Staffing Industry Analysts. He can be reached at cjohnson (at) staffingindustry (dot) com

Craig Johnson

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