February 2005

DO YOU USE TEMPORARY EMPLOYEES?
WHAT DO YOU KNOW ABOUT THEM?
Use of temporary, leased, and contract employees is a growing part of daily life in many North American businesses. In fact, according to the American Staffing Association, 90 percent of companies use contract staffing services!

In 2002, 2.1 million people worked as temporary employees each day.

Unfortunately, despite the many advantages claimed for this practice, it holds substantial risks to employers. They may feel overly secure with their staffing provider, not realizing they probably share joint liability with the agency for the behaviors of temporary workers. In Utah, for example, the State Supreme Court ruled, “even temporary workers have an agency relationship with both the temporary agency that initially employed them and the company that uses their services under arrangements with the agencies. ”[Kunz v. Beneficial Temporaries, 921 P. 2d 456 (Utah 1996).]

Special risks associated with temporary workers have been recognized by sources as diverse as the New Hampshire Society of CPA’s (“...employers have a similar obligation to make sure the temporary agencies from whom they are seeking workers are exercising this “reasonable care” in hiring workers …”), Britain’s famous MI5 intelligence agency (“...You should have procedures for assessing the reliability and integrity of those [temporary employees] you wish to employ…”), and insurers, concerned about safety risks (“A higher accident rate is documented for temporary agency work. “)

So, you are committed to using temporary workers. How do you protect yourself? Here is a brief outline of some suggestions from a variety of professional sources:

Conduct a procedures review with your staffing agency, and document it. Look at application forms, reference checking, assessments used, background checking, and interviewing procedures.

Check the agency’s own references—past and current clients can shed light on how their placements work out.

Insist they use professionally developed, valid, reliable assessments in the screening process.

Do you think the last point might be going too far? Consider this: The Federal Home Loan Mortgage Corporation (Freddie Mac, to most) relies on nearly 40 temporary-staffing agencies to fill a wide range of positions in their organization. In order to become a provider, an agency must agree, in writing, to subject each temporary worker placed within Freddie Mac to a rigorous background check. Moreover, the temp agency must agree to pay for the background check!

As Cindy Waxer concluded in "Workforce Management," June 2004, “Detailed background checks, computer security measures and relationship-building exercises might seem drastic given that the majority of today’s temporary workers complete their assignments without incident. But according to Monica Barron, who recently left her position as research director at AMR Research, the risk of property and identity theft have raised the stakes. ‘I don’t think you can be too careful about really knowing who’s coming into your facilities and what they are doing,” she says.

It is your money, your business, and your future at risk; what do you know about the temporary workers who come and go from your business each day?

Take control of their (your) selection process and procedures.

Myth 1: We are careful in the selection of our employees!
Naturally you are, but the majority of employees who steal are ‘first time offenders.’

Myth 2: We have our own security department!
Last year, a western regional bank suffered a number of “ski-mask” robberies. When the robber was finally caught, he turned out to be the bank’s Director of Security!

Myth 3: Our computer systems have the latest in anti-hacking systems.
That’s fine, but more than 65 percent of IT crime is traceable to insiders.

Myth 4: Our cameras and undercover agents catch most shoplifters.
According to the National Retail Security Survey, 48 percent of merchandise losses are attributable to employees.

Myth 5: Our procedures are foolproof.
Famous last words.  Many of the largest frauds occur in companies who say precisely this.  However effective the internal control and accounting system, it is not unbeatable.

Myth 6: We would not want to offend staff who have been with us for many years.
Thoughtful and considerate, but employees rarely object.

Myth 7: We won’t be badly hurt by isolated incidents.
Perhaps not. But most large losses are caused by long-term, ongoing schemes that are cleverly hidden for years.

Myth 8: We have never suffered a theft by an employee.
That may be true, but the fact that you may never have had a fire or a vehicle involved in an accident, does not prevent you taking out property insurance. The first loss really hurts!

Myth 8a:We have never suffered a theft by an employee.
Maybe you have, but you don’t know it yet. U.S. businesses lose as much as $110M dollars a day due to employee-related crimes. However, most employee theft goes undetected.

Even though it goes against the grain and may be painful—you owe it to yourself, your employees, and anyone who relies on your business to acknowledge you are at risk and do what you can to minimize that risk. An audit of your risks and vulnerabilities may be your best guarantee of survival.

In fall of 2003, and continuing through the summer of 2004, the company experienced explosive growth in demand for their products. From September of 2003 to September of 2004, total headcount increased by approximately 75 percent. This hiring program necessitated a major recruiting effort, and a consequent relaxation of the criteria previously applied to the Step One Survey™ scores. At the same time, supervisors were probably more reluctant to terminate an employee for cause, as they were often operating with a labor shortage.

Another variable was introduced to the hiring process in early May of 2004, when a professional recruiter was added to the HR staff, to conduct hiring interviews. She made hire/no hire recommendations to managers after her interview was completed.

Two major questions were considered in analyzing these data:

• Did the relaxation of Step One Survey™ score criteria affect early failure?
• Did the addition of the professional recruiter impact early failure?

Effects of relaxation of SOS criteria:
For the purpose of this analysis, it is important to note that the effects of the criterion change are probably partially masked by the labor shortage effects mentioned earlier. For example, if the effect of the change was to permit the hiring of candidates with somewhat lower reliability, it is also likely that supervisors faced with a critical labor shortage and a pressing production goal would be more tolerant of lower reliability in a given worker, as the alternative would have been an even greater labor shortage.

The standard of comparison in both studies was “early failure,” defined as failure of a hired worker to remain employed with the company for six calendar months.

Overall, the six-month failure rate in the previous study had been 51 percent before use of the SOS (baseline), and reduced to 29 percent with adoption of SOS criteria, eliminating from consideration any candidate with two or more scale scores of three or less. This process resulted in a hiring percentage of 53 percent of all applicants.

In the current study period, with more relaxed use of the SOS scores, 78 percent of all applicants were hired. The six-month failure rate rose to 49 percent, near the rate of failure when the SOS was not in use. This is a blended rate, including applicants hired both before and after the addition of the recruiter interview to the process.

Within the current study, differences in failure rates were observed before and after the change in the hiring process. Of the 411 applicants hired before the change, 208, or 51 percent, were early hiring failures. Of the 174 hired after the change, 76 were early failures, a reduction to 44 percent. It should be noted, the failure rate dropped by seven percent, even though the total percentage of applicants hired only dropped by two percent. Apparently, some benefit was achieved independent of a reduction in percent hired, perhaps through better placement.

It seemed likely, if the recruiter’s efforts were improving hiring success, additional improvement might be apparent after she had become more familiar with the company and the task at hand. Analysis of hires completed after she had been on the job nearly a month, confirmed this hypothesis. Of those hires, only 38 percent experienced early failure, even though the percentage hired went up to 81 percent.

Summary of findings:
The data, now spanning three different calendar years and three different levels of use of the SOS (none / strict criterion / relaxed criterion), indicate a consistent relationship between systematic use of SOS scores and successful hiring. While the recruiter, after gaining experience, positively impacted hiring, the simple use of an empirically derived SOS criterion was nearly twice as effective.

THE ELEMENTS OF GREATNESS

Today, it is not enough to be the best in your field or to be number one in your industry. In both of these instances, your performance is judged against what is currently considered "the best".

Being great involves more than aspiring to a currently held level of "best". Greatness requires a different level of thinking that moves you beyond what currently exists.

How can we accomplish goals, provide service or create in a manner that astonishes...not just satisfies?

What, then, is greatness?

For each of us, greatness has its own definition as it relates to our lives and experiences. Regardless of how we define it, greatness has certain key elements. These are: Vision, Belief, Desire, Courage, Perseverance, Execution and Passion.

Elements of Greatness

• Vision
  Can you see, touch and taste your dreams?
  
  Your vision should be crystal clear. You should be able to describe it in precise terms. It should transcend the obvious and look into the future.
  
  Take a minute and remove the self-imposed shackles that limit how far you really see. Take time to dream, imagine and pretend.
   
• Belief
  This is belief that is beyond “hope”…an absolute faith in your vision, in yourself and in the outcome. You have to believe that you are worthy to achieve your vision.
   
• Desire
  What gives depth and meaning to your life? To achieve your vision, you’ve “got to want it - really want it!” This is not “I’d like” or ”I want”…this is a BURNING DESIRE.
   
• Courage
  Courage is the ability to place your dreams above your fears. Often, to achieve greatness, you must get out of your comfort zone into the pain zone. People will challenge you when you attempt to be different – when you attempt to be great. No one will care if you do less – but when you excel, you become a target.
  
  Great work is done by people who are not afraid to be great.
   
• Perseverance
  In the face of disappointment, setbacks and barriers...perseverance is the strength to take one step…and then another...and then another. Greatness is more about perseverance than strength. Many fortunes, relationships and competitions are lost because people quit too soon.
   
• Execution
  At what level will you execute your vision? Create; handle the details; finish what you started; refine and improve.
  
  “If your chosen maximum is the required minimum, the sum total of your life will be mediocrity.”
   
• Passion
  What spark lights your soul? What drives you?
  
  Without passion, life is a series of chores. It is the passion in your life….that makes life worth living. If you’re not passionate about the process be passionate about the result. If you are not passionate about the result…change your focus.
  
  Never – never confuse survival with success.

Conclusion
Many of us live day to day with unused potential. We experience greatness in only small, peripheral ways in our lives. But in order to experience greatness regularly, consistently, almost daily in each of our lives, it requires enormous personal security, openness, creativity and a spirit of adventure.

It is not enough to aspire to greatness in only one area of your life. When you truly aspire to greatness, it gives more depth and meaning to all aspects of your existence...in your career, in your relationships and in your dreams.

But there is a caveat. Perhaps Winston Churchill said it best, “The price of Greatness is Responsibility.”

To be truly GREAT - live like you’ll never die and work like there’s no tomorrow.