Journal of Productivity Analysis

, Volume 39, Issue 2, pp 131–138 | Cite as

Do temporary agency workers affect workplace performance?



Using nationally representative workplace data we find the use of temporary agency workers (TAW) is positively associated with financial performance in the British private sector and weakly associated with higher sales per employee. However TAW is not associated with value added per employee. Employees in workplaces with TAW receive higher wages than observationally equivalent employees in non-TAW workplaces. But the presence of TAW in the employee’s occupation is associated with lower wages for employees in that occupation. Furthermore, conditioning on wages, the presence of TAW at the workplace is associated with lower job satisfaction and higher job anxiety among employees. These findings are consistent with TAW having an adverse effect on employees’ experiences at work, perhaps due a more labour intensive regime, one which is only partly compensated for with higher wages.


Temporary agency workers Labour productivity Financial performance Worker wellbeing 

JEL classification

J50 L22 L23 L24 



The author acknowledges the Department of Business, Innovation and Skills, the Economic and Social Research Council, Acas and the Policy Studies Institute as the originators of the 1998 and 2004 Workplace Employee Relations Survey data, and the Data Archive at the University of Essex as the distributor of the data. I thank the Nuffield Foundation (grant OPD/37358) for funding.


  1. Amiti M, Wei SJ (2006) Fear of outsourcing: is it justified?, NBER Working Paper No. 10808, Cambridge: MAGoogle Scholar
  2. Arvantis S (2005) ‘Modes of labor flexibility at firm level: Are there any implications for performance and innovation? Evidence from the Swiss economy. Industrial and Corporate Change 14(6):993–1016CrossRefGoogle Scholar
  3. Atkinson J (1984) Manpower strategies for flexible organisations. Pers Manag August: 28–31Google Scholar
  4. Autor D (2001) Why do Temporary Help Firms Provide Free General Skills Training? Quart J Econ 116(4):1409–1448CrossRefGoogle Scholar
  5. Autor D, Houseman S (2005) Do temporary help jobs improve labor market outcomes for low-skilled workers? Evidence from random assignments, NBER Working Paper 11743, Cambridge, MAGoogle Scholar
  6. Chadwick C, Cappelli P (2002) Functional or numerical flexibility? Which pays off for organizations? mimeo. Management Department, The Wharton School, University of PennsylvaniaGoogle Scholar
  7. Chaplin J, Mangla J, Purdon S, Airey C (2005) The Workplace Employment Relations Survey (WERS) 2004 technical report, National Centre for Social Research: LondonGoogle Scholar
  8. European Foundation for the Improvement of Living and Working Conditions (2006) Temporary agency work in an enlarged European union. Office for Official Publications of the European Communities, LuxembourgGoogle Scholar
  9. Forde C (2008) ‘You know we are not an employment agency’: Manpower, Government and the Development of the Temporary Employment Agency Industry in Britain. Enterprise and Society 9(2):337–365CrossRefGoogle Scholar
  10. Forde C, Slater G (2005) ‘Agency Working in Britain: Character. Consequences and Regulation’, British Journal of Industrial Relations 43(2):249–271CrossRefGoogle Scholar
  11. Forde C, Slater G (2006) Temporary jobs: what are they worth now? Work and Pensions and Labour Economics Group Conference PaperGoogle Scholar
  12. Forth J, McNabb R (2007) WERS 2004 information and advice service Technical Paper No. 1—innovations in WERS 2004: the collection of objective data on workplace performance, NIESRGoogle Scholar
  13. Girma S, Gorg H (2004) Outsourcing, Foreign Ownership and Productivity: Evidence from UK establishment level data. Rev Int Econ 12(5):817–832CrossRefGoogle Scholar
  14. Hempell T, Zwick T (2005) Technology use, organizational flexibility and innovation: evidence for Germany, ZEW Discussion Paper No. 05-57, MannheimGoogle Scholar
  15. Heywood J, Siebert WS, Wei X (2006) Examining the determinants of agency work: do family friendly practices play a role?, IZA Discussion Paper no. 2413, Bonn, GermanyGoogle Scholar
  16. Houseman S (2001) Why Employers Use Flexible Staffing Arrangements. Ind Labor Relat Rev 55:149–170CrossRefGoogle Scholar
  17. Houseman S (2006) Outsourcing, offshoring and productivity measurement in manufacturing, Upjohn Institute Staff Working Paper No. 06-130Google Scholar
  18. Houseman SN, Kalleberg AL, Erickcek GA (2003) The Role of Temporary Agency Work in Tight Labor Markets. Ind Labor Relat Rev 57(1):105–127CrossRefGoogle Scholar
  19. Kersley B, Alpin C, Forth J, Bryson A, Bewley H, Dix G, Oxenbridge S (2006) Inside the workplace: findings from the 2004 workplace employment relations surve. Routledge, LondonGoogle Scholar
  20. Kleinknecht A, Oostendorp RM, Pradhan MP, Naastepad CWM (2006) ‘Flexible Labour. Firm Performance and the Dutch Job Creation Miracle’, International Review of Applied Economics 20(2):171–187CrossRefGoogle Scholar
  21. Michie J, Sheehan M (1999) HRM Practices, R&D expenditure and innovative investment: evidence from the UK’s 1990 workplace industrial relations survey (WIRS)’. Industrial and Corporate Change 8(2):211–234CrossRefGoogle Scholar
  22. Michie J, Sheehan M (2001) Labour market flexibility, human resource management and corporate performance. Br J Manag 12(4):287–306CrossRefGoogle Scholar
  23. Millward N, Bryson A, Forth J (2000) All change at work?. Routledge, LondonGoogle Scholar
  24. Nielsen S, Schiersch A (2011) Temporary agency work and firm competitiveness: evidence from german manufacturing firms, DIW Discussion Paper No. 1135Google Scholar
  25. Segal LM, Sullivan DG (1997) The Growth of Temporary Services Work. The Journal of Economic Perspectives 11:117–136CrossRefGoogle Scholar
  26. Siegel D (1995) Errors of Measurement and the Recent Acceleration in Manufacturing Productivity Growth. J Prod Anal 6:297–320CrossRefGoogle Scholar
  27. Ten Raa T, Wolff EN (2001) Outsourcing of Services and the Productivity Recovery in U. S. Manufacturing in the 1980 s and 1990 s. J Prod Anal 16:149–165CrossRefGoogle Scholar
  28. Trade Union Congress (2005) The EU temp trade: temporary agency work across the EU. TUC, LondonGoogle Scholar

Copyright information

© Springer Science+Business Media, LLC 2012

Authors and Affiliations

  1. 1.National Institute of Economic and Social ResearchLondonUK

Personalised recommendations