The Case Against People 'Leasing' - It takes a family to make a company thrive

At one time when anyone talked about temporary help, Kelly Girls (now Kelly Services) immediately came to mind. Kelly Girls were used almost exclusively for clerical help, mostly to fill in for people on vacation. However, they also were used during periods of temporary work overloads, such as closing the books, audits and implementing new accounting procedures.

The arrangements seemed to work out very nicely. The tasks required, although somewhat technical, were fairly standard. So by hiring Kelly Girls you got the skills required with little or no training. When the workload returned to normal, they were gone; no fuss, no bother. You avoided all the problems associated with hiring and laying off people. No benefits to worry about, no unemployment costs, no demoralizing effect on the entire organization that happens when you lay off permanent people.

Temporary help limited to these tasks worked out very well. The thinking these days, however, has changed, and temporary help has expanded to parts of the organization where it definitely should not be used. This trend basically results from the way corporate performance is now measured by so-called experts. The number of heads per cars produced is a good example. Because it seems somewhat rational and is easily calculated, the media picks up on this immediately, constantly putting pressure on the automakers by comparing head count per units produced.

To deal with this situation the companies are forced to focus on reducing their head count. When you get beyond the legitimate reduction of heads, you start affecting performance, i.e., loss of output, poorer quality, and so forth. At this point, if further manpower reductions are mandated, the only solution seems to be to lease employees. Because the leased, or contract, employee shows up on the books as a purchase expense, there's no increase in head count. Problem solved. Well, not exactly.

It goes beyond shuffling numbers around to make the company look good. Leased employees no longer are simply clerical, but engineers, designers and other technicians. They're positions that automakers rely on tocreate and develop unique products and processes to remain competitive.

And it's not routine work. It requires innovative, creative, competitive and dedicated people who feel they are a permanent part of the organization. These are attributes you can't expect to find in temporary employees. I have nothing against these people, but it's pretty hard to become dedicated if you are bumped from job to job.

What concerns me is that the number of leased employees has increased 30% in the last four years according to a recent study by the National Association of Alternative Staffing. The same study also predicted that in the very near future the numbers will probably exceed 5 million.

If leasing people is such a great idea, then maybe we should apply it to other areas such as cutting the divorce rate. Instead of getting married, raising a family and then later - if things don't work out - getting a divorce, you would lease your wife or husband. You could even lease your kids: Bingo! You have a family. Then later if things don't work out you send everyone packing. Since there was no marriage, there's no divorce. Down comes the divorce rate.

I know, it's a stupid idea because what you've done is destroy the institution of a family, the very foundation of any society.

To have a family you must have commitment and be able to assume responsibility. It's much the same with a company. If it's to be successful it must have responsible employees committed to its business.

There's another point that needs to be made: Companies that lease engineers have little interest in getting involved in any program that encourages young people to go to engineering school.

If we want to remain a great industrial power and stay competitive with all the up-and-coming nations that are now nipping at our heels, we must develop more engineers. A young person will think twice before he or she takes up engineering only to wind up as a leased employee.

Engineers must feel they are part of a family to realize their full potential, and it takes a family to make a successful company.

- Stephan Sharf is a retired Chysler Corp. executive vice president for manufacturing.