You’ve come a long way, baby: What the staffing industry offers today

By Steve Jones
|Canadian HR Reporter|Last Updated: 11/01/2001

The staffing services business in Canada has grown into a $4-billion industry that places hundreds of thousands of job-seekers in full-time, temporary and contract-work assignments.

It has been an evolution from narrowly focused clerical beginnings to a sophisticated sector looking to provide (and anticipate) employer needs. Staffing has come a long way.

Back in my day

Temporary staffing was conceived during the Second World War from a rise in demand for military supplies and a shortage of available male workers. While the men were away at war, women stepped in to help out in munitions factories.

When the war ended, soldiers returned home to re-claim their jobs but industry had discovered a new source of labour, with a cost-effective business model. Not incidentally, many women also discovered there was a place for them in the workplace that offered a respite from poverty and dependence. A development that shaped the staffing services industry in its early days.

After the war, structured staffing service firms emerged. One of the first firms established in Canada was Drake, which was founded in 1951. Manpower Temporary Services was formed in Milwaukee in 1948 and opened offices in Canada in 1955.

From the early 1950s to the late 1970s, the staffing industry had a “pink collar” reputation because it primarily matched female job-seekers with temporary assignments, concentrated in clerical and secretarial areas.

As the industry evolved, its demographics changed and in 1966, “Kelly Girl” changed its name to Kelly Services, Inc., to reflect its increasingly varied services, customers and employees.

In the 1960s, a related industry known as “executive search” grew as accounting firms hired experts to find senior executives to fill specific positions. Many of these firms were established in the United States and set up subsidiaries in Canada.

“In the early days, we had to demonstrate and establish fair and ethical standards for this developing industry in order to expand the opportunities for both employers and candidates,” recalls Keith Bagg, retired founder of The Keith Bagg Group, established in 1971.

Some employers would request an employee of a specific sex or race. The onus fell on recruitment agencies to point out the benefit of not placing these restrictions on candidates and focusing on finding the best person for the specific job instead. In this way, recruiting agencies acted as pioneers, setting early “equity” standards and leading by example, explains Bagg.

He believes the industry gained further stature and credibility in the 1960s when companies began to depend on recruiters to fill data processing staff positions — a new need in the marketplace at that time.

Two associations were formed to represent the staffing industry, provide education and promote quality service: the Association of Professional Placement Agencies and Consultants (APPAC) in 1962 and the Canadian Association of Temporary Services (CATS) in1968. By the 1990s, CATS had changed to the Employment and Staffing Services Association of Canada (ESSAC) to reflect the evolving scope of the industry.

Multi-skilled professionals

Since the early 1990s, the sectors served by the staffing industry have expanded and diversified along with Canada’s workforce.

“There has been a noticeable move to provide senior management staff on a temporary basis in a ‘bridging position’ to full-time employment, and an increase in temporary executive contracts for maternity leave positions,” says Rich Stoppler, president of Executrade Consultants Ltd. in Edmonton.

Like other sectors since the mid-1990s the staffing industry has been redefining itself in pursuit of greater productivity. Some firms responded by expanding the scope of their businesses through mergers and acquisitions, while others have taken the opposite approach by specializing in niche markets, such as accounting or legal services.

With these changes came an increase in the skill sets and education levels supported by the industry.

Although a 2000 survey conducted by MarkTrend Research for ACSESS revealed that office and clerical accounted for almost one-third of sales in the temporary sector, it also cited IT for 10.3 per cent, professional services for 6.7 per cent and marketing for four per cent. And the demand for temporary professional and IT services continues to grow rapidly.

“Temporary workers have progressed from the housewife turned Girl Friday stereotype to everything from fork-lift operators to computer savvy individuals who provide engineering, medical, information technology or other professional services,” says Sandra Sears, president of Toronto-based StaffWorks. “These temps range from entry-level post-secondary graduates seeking work experience to retirees looking for flexible opportunities,” she adds.

From a corporate standpoint, the main reason companies seek temporary workers is to meet their needs during growth periods, followed by seasonal requirements, special projects and in some cases to “try-out” candidates before offering them a full-time position.

Use of temporary and contract workers is recognized as a sound business decision that affords companies the ability to adjust production schedules and reduce overhead as required.

Uncovering top talent

On the other hand, recruiting and executive search firms also have a responsibility to meet clients’ more long-term human resources goals.

“Our role is to uncover and place candidates who rank in the top 20 percentile of their profession and can impact an organization’s bottom line,” explains Yvan Michon, vice-president of executive search in the Montreal office of TES.

To meet these service requirements, the education, skills and training required by staffing specialists and recruiters has increased to the point where it is common for these professionals to hold masters and doctorate degrees.

Many have also obtained the certified personnel consultant (CPC) designation, which signifies they have met specific educational and testing requirements. This ACSESS-sponsored program is designed to confirm an individual’s commitment to best industry practices.

Today’s staffing professionals combine their expertise with increasingly sophisticated instruments and technologies. Bill Fretz, director of the executive search practice, for the Oakville Ont.-based, The 500 Staffing Services Inc., believes these advances complement staffing services but “don’t replace the judgement of a professional recruiter. The recruiter uses these skills to help a client define their critical success factors and then identify, qualify and deliver hireable candidates.”

Historically, staffing companies providing temporary help were seen to be distinctly different or separate from placement agencies and executive search firms. Over the years, the full service approach, including temporary, contract, direct-hire and executive placement, has moved these disciplines closer together.

In 1997, the two industry associations joined together to survey their respective members and found that in excess of 87 per cent offered both direct-hire and temporary services.

This survey confirmed a new level of maturity and comprehensiveness in the Canadian staffing industry and formed the foundation for a new association. In 1998, APPAC and ESSAC were replaced by the Association of Canadian Search, Employment and Staffing Services (ACSESS) with a broad mandate to serve the entire staffing industry across Canada.

Looking to the future, Canada’s staffing services industry faces various challenges and opportunities, such as preparing for the next economic boom, incorporating new technologies to enhance their business processes, a shrinking labour force and addressing the unique needs of “Generation Next.”

Steve Jones is president-elect, Association of Canadian Search, Employment and Staffing Services (ACSESS) and president of The People Bank, which has eight offices across Canada. He can be reached at info@acsess.org.

SIDEBAR

An economic barometer

Some economists view the staffing industry as a leading economic barometer since businesses adjust to changes in demand by using staffing services to increase or decrease workforces as the economic climate changes.

“During the recessions of the early ’90s, early ’80s and mid-1970s we saw the demand for temporary and contract workers drop as we entered a downturn and increase as the economy improved,” says Bruce McAlpine, national president of the Association of Canadian Search, Employment and Staffing Services (ACSESS) and vice-president of Toronto-based The Keith Bagg Group. With recent cuts in the airline, information technology and automotive industries, this pattern is emerging once again.

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