Flexibility Case

Abstract

This paper examines the advantages and disadvantages of flexible staffing. A closer look at flexible staffing as Kaiser Manufacturing Company (KMC) considers FSS as an option for reducing company overhead and how the company can benefit. Most organizations use staffing companies for temporary assignments or part-time workers for high turnover positions. The company savings on health benefits and administration alone is a huge advantage.

Case Study 2: Deciding Whether to Use Flexible Staffing

Part 1: Summarize the possible advantages and disadvantages of flexible staffing

There are a number of advantages of flexible staffing that KMC can benefit. KMC is not the only company considering alternative labor and staffing sources to become productive. Successful companies need flexibility. The economy has forced the majority of U.S. companies to find and determine ways to cut company costs. KMC management appears to have a clear understanding of the project tasks, they just needs an experienced alternative resource that will alleviate the current overhead. Flexible staffing is a win-win option for both the employee and the employer. KMC's staff of over 800 employees year round is especially during the slow period is causing the company to bleed with the excessive cost of maintaining unneeded overhead and staff. A large number of companies are reducing employee's hours, cutting benefits and have limited staffing and hiring processes due to the current economy. Flexible staffing services offer alternatives for companies who are looking to minimize labor costs.

FSS's flexible staffing option provides KMC immediate reduction in labor costs. The employee and employee benefits tie directly to the company's bottom line. By lowering overhead and having labor force flexibility during peak operations KMC's profitability is likely to increase. Because FSS can be used to buffer regular employees from fluctuation in demand, KMC will be more likely to use flexible staffing services when production is high and regular work force hours are high (Gramm & Schnell, 2001, p. 248). Due to the companies stance on attracting and retaining committed employees the average age of the staff has become older causing a rise in labor cost. KMC needs to reduce costs in overhead and gain a less labor intensive staff by utilizing the need of contingent workers. Using a flexible staffing service shifts the burden of responsibility to FAA relieving KMC of the legal obligations as employees. KMC will also be relieved of any admin and HR duties for these employees as well. Therefore the potential administrative cost can also be reduced to the number of actual employees the company will have in-house. According to a survey by Susan Houseman (2000), seasonal workers appears to be the main reason for using firms like FAA with "55 percent of employers using short-term hires, appear particularly important in the use of that type of flexible staffing arrangement" (p. 16).

And while the advantages are appealing we also have to consider the disadvantages that must be taken into consideration when looking into flexible staffing options. KMC will lose legal rights of flexible workers. Flexible workers may lack familiarity with equipment and there is also the potential problem of motivation and quality from such flexible workers. The flexible workers loyalty will be with FSS and not KMC. The flexible worker will generally put the companies priorities over the contracted employers priorities and needs. This could result in added friction between the flexible workers and core workers. It will be important that KMC and upper management inform the core workers of the company's financial position and help them to better understand the purpose of using flexible workers.

Part2: Summarize the advantages and disadvantages of using FSS as a service provider.

By using FSS as a service provider KMC will be able to reduce the uncertainty and inconsistencies associated with the turbulent weather and swings in interest rates. Using FSS will also reduce the additional administrative responsibilities and duties of recruiting and maintaining