On the job: Here come the "supertemps"

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(MoneyWatch) Some 58 percent of companies plan to use temporary employees -- at all levels -- over the next few years, the Harvard Business Review reports. Authors Jody Greenstone Miller and Matt Miller say that temporary employment is no longer limited to administrative assistants, warehouse workers, or other low-level work. High-level people are choosing to work as temporary employees and earning money comparable to what they would have earned as an employee, or even as a partner, in a traditional company.

When you have specialized skills that are in demand, it can be to your advantage to work solo. That allows you to take on the projects you like, rather than dealing with the typical administrative and political headaches in a traditional corporate job. The authors write:

Consider Roger Corson (not his real name), a graduate of Stanford's business school, who was a partner at a leading strategy consulting firm when he decided to go independent, 18 months ago. His wife and he had recently had their first child, and her corporate job required extensive travel. The industry in which Roger had mostly worked had cut back on outside consultants. If he was going to have to reinvent his client base, he recalls thinking, he might as well do it on his own: He'd have more flexibility to go after the clients he truly wanted and to set limits on how hard he worked (80-hour weeks had been his norm for years, something he felt was literally unsustainable).

Now, Roger says, I am continually surprised at how easy it is to do this kind of work without all of the resources of a big consulting firm behind you. He reports being amazed at the amount of bandwidth that I have to really focus on the client, free of the administrative chores that big-firm partnership entails. I feel so much fresher in terms of being able to be present, to be there and help solve the problem, he says. Roger works 80 percent of his former hours and earns 80 percent of his former pay -- a trade he says is ideal.

Working on your own is not traditional, but the people who do it find it to their liking. A 2011 survey of independent professionals (in other words, high-end temporary workers) found that close to 80 percent of these workers were satisfied with their current situation. That figure is especially notable given that 45 percent of the respondents had been "forced" into that role.

Among those who aren't forced into these less permanent positions are the highly educated and experienced women who are building their own mommy track. Instead of settling for a less fulfilling career in favor of a family, these women get both. Brooke Borgen writes:

I am absolutely seeing this "Supertemp" trend among many 30-something moms (like my business partner and me) who have incredible resumes and have attended some of the country's best educational institutions. As driven and motivated people, most of our career paths end up with a binary all-or-nothing proposition once we have kids whereby even scaling back to a "part-time" schedule can be a 40 hour work week instead of the 60-80 hours we were used to. In order to spend quality time with my kids after getting my MBA at [Harvard Business School] and then working at Bain & Co, I opted out of the traditional corporate track in order to do freelance projects. My business partner, a mergers and acquisitions attorney at a major law firm, was in the same boat and Canopy Advisory Group was born: now a portfolio of ~25 professional services consultants across consulting, law, finance, and marketing in Denver, Colo.

Will such "supertemps" become more common? Health insurance can be difficult, if not impossible, for an independent person to obtain. People who would like to work solo but have health concerns cannot give up their traditional jobs without losing health coverage. This is a nationwide problem, with health care tied to employment for most people. But companies do see value in an experienced, capable temp. There's less risk in hiring a temp then there is in hiring a "permanent" employee. And filling a role with an interim person can allow a company the time to determine which path they would like to take.

Temps also allow for flexibility, which can ultimately lead to cost savings. You can test ideas rather than having to make commitments to full-time staff. If the idea fails, it doesn't lead to layoffs and unhappy former employees. If it succeeds, companies can then decide to staff it formally.

There are risks in functioning even as a high-level temp, including the lack of health insurance. Another is that regardless of what the temp and company want, the IRS can retroactively determine that a person really isn't independent but an employee. Additionally, when you are independent, it can mean "job hunting" every few months. For the truly superstar talent who can pick and choose jobs, this isn't a problem. But for a person who is highly qualified, but not a superstar, this can pose an additional risk.

No matter what, old-fashioned business models are giving way to new ways of thinking, and the supertemp model appears to be taking hold.

[malmka]

After having my "regular" job eliminated 2 1/2 years ago, I started working as a temp/contract worker thinking it would be a temporary thing. I have continued to search for a regular job, but haven't gotten one. In the meantime, I have maintained almost steady employment as a contract employee. I am 50 years old and find many companies doen't want to hire someone with my level of experience and pay expectation for a regular job. But, they will often jump at the chance to hire an experienced temp who can come in and hit the ground running for a special project. While not an ideal situaiton, contract work has been preferable to being unemployed.

[Filmguy870]

This is EXACTLY why we need Health Care Reform to allow for affordable health care NOT TIED TO EMPLOYENT!!! What's so hard to understand about this????

[skeezix06]

If you don't have employment you can't pay for the mandatory health insurance which is why we needed and should have had medicare for all. I would have cheerfully paid more for medicare for all. Mandatory insurance gives the insurance companies all the power to do whatever they want when it comes to cost of premiums. That is why Obama's healthcare will end up in failure.

[gbreadmann]

I know what a "supertemp" is...it used to be called a "professional consultant". They used to be paid about $250 an hour, but nowadays they seem to get about 5% of that.

[A9119815]

It's important to remember that when you work for a company, for every dollar they pay you they are putting another dollar or so into benefits like retirement, medical care, the company's share of your social security, the cost of your office, and so forth. When you work as an independent contractor, you are really getting paid about half of what your nominal pay rate is. You have to have the discipline to live off of half of your income and put the rest away into retirement (through a SEP IRA or other such plan), medical care, the other half of your social security and medicare, business expenses, and an emergency savings account. If you have the discipline to do this when times are good, and to not tap your retirement savings when times are tough, you can come out OK. I recommend putting the maximum (around 20%) into a SEP IRA, and another 20% or more into an emergency savings account (to live off of when opportunities are scarce). If you lack this level of discipline (and it is tempting to spend more when you have the money coming in) you may well end up at retirement age with little to draw upon.

[jtdev1]

What planet are you from?

In an "Ideal World" do as you say...

In reality, the companies are the ones making the money, not you...

[lelnet]

In other words, if you're an FTE, you're costing your employer a lot of money to be spent on things you probably don't actually want and may not actually be able to gain any concrete benefit from, but they either actually have to spend it, or merely think they have to spend it. As an independent, more of that money goes into your pocket, where you can spend it on things you _do_ want and _can_ use. Win-win, say I! :)

You should really be putting money aside for both retirement and unemployment anyway, whether you're independent or an FTE. After all, FTEs lose their jobs too, in bad times. (Yes, shedding employees can be difficult and traumatic for the companies that do it. But when conditions are rough, they do it anyway. "Job security" is an illusion, regardless of the structure of your relationship with the people who pay your bills. Ex-FTEs who can't find new jobs need savings just as much as independent contractors who can't find new clients.)

[skeezix06]

No thank you. This isn't going to help the economy recover.

[SUZAMBA]

Face it, companies are already doing the TEMP thing. Long term jobs are the thing of the past. Companies continue to make money, while the worker tries to remain afloat!

[saucymugwump]

jtdev1 wrote: "How can anyone plan a life on a 6 month to 1 year contract basis?"

This is a very important question.

Since these "supertemps" are only super because of their specialized skills, how will they find time to attend classes to keep up with technology.

And companies want you available from contract start to contract end, so forget about ever taking a vacation longer than a 3-day weekend.

Back to the future: indentured servitude.

[saucymugwump]

Oops, change "technology." to "technology?"

[stellzbellz10]

Sounds like consulting. I know that individual consultants have been on the rise (especially among women) within a huge variety of professional positions.

The energy company where my husband works has an accountant that is a consultant - he charges what would be the billing rate if he were at a firm, but works 30 hours a week and still makes more than any of the full time accountants. Yes, he is responsible for his own healthcare costs and doesn't have retirement benefits, but when my husband spoke with him about the guy made it clear it was a choice he made because, basically, he'd rather get paid 100% for his work and coordinate his own "benefit" package (invest for retirement as he sees fit and chose a health plan on his own terms).

This has been going on in the scientific field for over 10 years - especially with companies who deal with FDA oversight. They contract an individual (and most importantly third party) consultant whenever they get dinged by the FDA, for one reason or another, to come in a audit their processes and create new quality controls. It's a win-win for everyone.

I think most of these people would find the term "supertemp" a bit condescending, don't you think?

[credibility2]

Temping, regardless of the type of job or the industry, is a terrible working alternative. For one thing, it doesn't provide for time to continue looking for permanent work. No benefits and the hiring agency gets a nice fee while you do all the work. Been there, done that. Terrible.

[SUZAMBA]

That is why companies love Temps.......no benefits!

[jtdev1]

This is the norm now. Nothing new here.

No commitment and no responsibility by the company.

85% of all tech jobs in Cleveland are contract jobs only with no benefits at all. 100% of the responsibility is on the contractor's shoulders.

How can anyone plan a life on a 6 month to 1 year contract basis?

But of course, these very same companies want you to sign a 2 year contract with them for their service, How nice....

[amerilatino]

This supertemp thing is an attempt by big business to get the flexibility and non-commitment of an indie contractor, for a newbie employee price. What rubes new professionals are. If my trade came to this, I would rather sell hot dogs on a corner.

[SUZAMBA]

Careful, someone will complain that Hot Dogs are bad for you, and will cause you to become fat.........then what will you do?