Rule-Heavy Europe Goes Temp

Els Van Schepdael is desperate. The director of the Randstad Temporary Agency in Brussels needs to find a computer coder and four bilingual secretaries by tomorrow morning.

"If half a dozen secretaries who spoke Dutch and French walked in right now, I could send them right to work," Ms. Van Schepdael says. "It's even more difficult to find computer programmers."

European leaders gathered in Luxembourg last week for a crisis summit on employment, where they once again pledged to increase public investment in job training and state subsidized jobs, an old strategy that hasn't reduced unemployment. The total number of Europeans out of work remains above 18 million, or around 11 percent, more than double the American rate of 4.7 percent.

And yet, without state aid, Europe is creating jobs: temporary jobs.

As many as 1.2 million people in the European Union countries now earn a living through a temporary agency. And the figure is expected to double in the next seven years.

Temps have long been commonplace in the US, and a greater percentage of Americans than Europeans still work as temps.

But Europe's market for temps is now growing faster than in the US, creating big opportunities for American companies. Manpower, the US market leader recently opened a European headquarters in Brussels that already does $2 billion a year in business here.

"Europeans are just discovering the need for labor flexibility," says Jon Chait, Manpower's managing director for Europe.

Attack on workers' benefits

For many Europeans, the rise of temping represents a frontal attack on workers' hard-won job security and social benefits. But businesses see no other way to create jobs.

"While governments dawdle about making it easier to hire and fire, employers are using us to create their own flexible labor market," says Roy Broughton, the Paris-based vice president of Adecco, Europe's largest temp agency.

Once they hire workers full time, companies find it expensive and time-consuming to lay them off. A Belgian employee who is fired receives one month's salary for every year with the company.

Because temping circumvents Europe's strict labor regulations, many governments continue to restrict it. "A feeling persists that temping is something dirty," says Mr. Broughton.

In Germany and Spain, temping has been legal for just three years. Italy only legalized it earlier this month.

In the Netherlands, however, more than 3 percent of the working population are temps, about twice the American rate. Dutch unemployment is among Europe's lowest - about 6 percent.

In many places, convoluted and expensive labor taxes put a brake on temping. Add-on costs for hiring a temp secretary range from 10 percent in Britain to 85 percent in France.

"We can't give clients a single price for temps throughout Europe," says Broughton. "The UK has a definite advantage over France."

At first, most temps were women, employed mainly as secretaries. Not anymore. Two thirds of temps today are men, and temps work as architects, bankers, doctors - even corporate managers.

The average education level is rising as well. Already, more than 10 percent of temps are university graduates, says Jean-Claude Daoust, president of the European Federation of Temporary Work.

A majority of these regular temps are between 21 and 29 years old. For them, temporary jobs represent the best chance of entering the labor market.

Gunter Van Cawenbergh signed up with the American firm Manpower after he graduated from one of Belgium's most prestigious business schools. Within a week, he was placed in the human resources division of an insurance company.

Months after his project was completed, the insurance company called back with a three-year contract.

"I've had all these interesting different experiences, while many of my friends are still unemployed, says Mr. Van Cawenbergh. "They think temping is below them."

Expanding temp frontiers

Despite the resistance, the frontiers of traditional temping are expanding. Randstad, the leading Dutch temp agency, has begun opening offices inside company premises. At the Amsterdam RAI Conference Center, it manages all catering services. And at the Vreinglasefabriek glass factory in Leerdam, Randstad has replaced the personnel office.

"We no longer just get workers to fill in for holidays or to replace workers out for illness," says Peerke Anink, Randstad's manager of corporate relations.

"It's much more efficient to be inside the factory and have the production and plant managers be able to come and visit your office and say, 'I need so many workers.' "

Temp workers win some benefits

Temp employment is even gaining some of the benefits of permanent employment. Dutch temp agencies and unions recently signed a groundbreaking agreement, providing temps with pensions, educational opportunities, and improved health care.

"We want to give pensions to our long-term workers," says Clemens Farla, Randstad's executive vice president. "It shows our commitment to them."

Back in Brussels, Van Schepdael picks up the phone at the Randstad agency, placing a call to Vivienne, a prospective temp.

"Are you still looking for work?" she asks.

"Yes."

"Can you start tomorrow morning?"

"Yes."

"I'll write up the contract right away," a delighted Van Schepdael says. "Please come pick it up this afternoon."

She has found a computer coder, but is still looking for the four bilingual secretaries. And Europe is still looking to create lots of new jobs. Maybe the answer isn't so far away.