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.
KeywordsTemporary agency workers Labour productivity Financial performance Worker wellbeing
JEL classificationJ50 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.
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