1 MAKING THE CORE CONTINGENT

20 Pages·2005·0.14 MB·English

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Kim Hoque
Nottingham University Business School
Jubliee Campus
Wollaton Road
Nottingham, NG8 1BB
UK
[phone]
[email protected]

and

Ian Kirkpatrick
Leeds University Business School
Maurice Keyworth Building
University of Leeds,
Leeds, LS2 9JT
UK
+ 44 (0)113 233 2611(cid:3)
[email protected](cid:3)
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Paper prepared for the European Group of Organisation Studies (EGOS) conference,
Berlin, June-July, 2005
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The last five years have witnessed a steady growth in the use of agency workers to fill
core professional roles in public sector organisations. Whereas in the past the use of
temps was driven mainly by employer demands for improved flexibility and cost
reduction this current expansion is predominantly supply led occurring against a
backdrop of increasingly tight labour markets. In this paper our objective is to explore
some of the management consequences of this development. Following a review of
the human resource literature our focus turns to the specific case of agency work
amongst professional social workers in the UK public sector. Drawing on an
interview based study it is argued that the growing reliance on agency contracts is
having some negative consequences for staff morale and for the quality of services. In
the conclusion it is argued that this may undermine key aspects of a (largely
functional) public service model founded on strong internal labour markets,
employment stability and collegial ethos. There are also indications that social
services are entering a vicious circle in which the growth in agency working is
reinforcing many of the problems it was designed to alleviate.(cid:3)
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The drift in public services towards more flexible and insecure forms of work is
widely noted in the literature (Morgan et al. 2000). Across developed countries
attempts to install new management regimes in the 1990s led to an increase in the
number of employees on temporary (mainly fixed term) contracts (Hebden and
Kirkpatrick, 2004; Pollitt and Boukaert, 2000). More recently these trends have
intensified with public organisations increasingly relying on temporary work agencies
to supply key groups such as doctors, nurses, teachers and social workers. In the UK,
for example, it is estimated that National Health Service (NHS) expenditure on
private nurse agencies has trebled to over £360 million in just five years (Audit
Commission, 2001). Similar trends have been noted elsewhere, including the US
(Kalleberg et al., 2003), Scandinavia (Aronescu et al., 2004) and Australia (DeRuyter,
2004).
A key feature of the growth in agency work in the public services is that much
of it is occurring within core professional roles, whereas before agency temps were
concentrated in operations that were generally less central to service delivery (Rubery,
2004). Following Kunda and Alion-Souday (2004: 209) one might say that this marks
the ‘invasion of the periphery’. Also, whereas in the past the use of temps was driven
mainly by employer demands for improved flexibility and (to a lesser extent) cost
reduction (Cully et al., 1999) the current expansion is predominantly supply led (Bach
and Winchester, 2003; Purcell et al., 2004). Change has occurred against a backdrop
of increasingly tight labour markets and problems of staff recruitment and retention.
Hence, many employers are now being compelled to use agencies because of
‘difficulty in finding qualified workers of their own’ (Houseman et al., 2003: 106).
In this paper our aim is to investigate the consequences of these developments
in one area: UK social services. This sector is of interest because of the rapid, largely
supply driven expansion of agency employment among core professional social
workers. This suggests a significant shift in the traditional employment model in
which professionals were accorded stability and job security in return for a
willingness to work ‘beyond contract’. This was seen as a key feature underpinning
the ‘public service ethos’, so a shift away from this model could well imply
considerable deleterious effects. Drawing on qualitative data our approach will be to
assess the consequences of the growth in agency work within core professional roles,
and also the longer-term implications of this change for the established model of
public service employment.
The remainder of this paper is structured as follows. First we look at what the
existing theory and research can tell us about the likely consequences of making core
employees contingent. Following this, the next section introduces the study and
provides background information on the structure of local authority social services in
England. The penultimate section presents our findings. Finally, we consider some of
the longer-term implications of these trends. Anticipating our conclusions a little it is
argued that the penetration of agency work into core areas of social care service
delivery is having some damaging and lasting effects. There are also indications that
social services are entering a vicious circle in which the problems generated by
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agency work are resulting in an erosion of traditional models of employment in the
sector.

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A number of arguments in the literature suggest that agency working is beneficial to
employers, even where core professionals are concerned. For example, Colling (2000)
points to the role that agency workers play in allowing employers to handle
specialised projects, reduce costs, cover for absences, and respond to market
fluctuations. Even when flexibility is unplanned – as in the UK public services – there
may be certain benefits. A degree of labour turnover or churning among core
professionals may, for example, be beneficial in terms of organisational learning and
the acquisition of new knowledge (Matusik and Hill, 1998). Agency work also
provides a mechanism for wage discrimination in favour of new entrants and is
therefore a way in which organisations might adjust to tight labour markets without
raising overall levels of pay (Houseman et al., 2003). Furthermore, Forde (2001) notes
how employers may benefit from ‘temp to perm’ policies, whereby agencies are used
as a cost effective screening process to assist with recruitment.
However, these arguments need to be counterbalanced against a host of
potential costs that follow when agency work is extended into the core. To understand
this, a useful starting point are demand side theories that categorise strategic choices
in labour utilisation. What these theories have in common is a suggestion that a heavy
reliance on contingent employment will be problematic under certain conditions. For
example, implicit within Atkinson’s (1984) flexible firm model is that where core
workers are concerned, it is disadvantageous for managers to contract out labour
supply. Given the firm specific skills these workers possess, they should be actively
retained, developed and shielded from medium term market fluctuations in the market
in return for greater functional flexibility. Similarly, within transaction costs
economics (Williamson, 1985; Koene et al., 2004), it is argued that the relative cost of
transactions associated with contract specification and monitoring increase when
skills are firm specific (asset specificity), when there is uncertainty and a high
frequency of demand. Where transaction costs are high it is more efficient, the theory
states, to offer permanent contracts as opposed to relying on temporary workers.
Permanency helps to minimise transaction costs by eliciting greater co-operation from
workers thus making it easier for managers to deploy labour and monitor performance
(Ouchi, 1980; 1981).
The literature on the resource-based view of the firm also points to situations
where it might be more effective to PDNH rather than EX\ human capital. Here the
focus is both on the demands of managers to increase efficiency DQG(cid:3)on the
importance of knowledge or competency. Matusik and Hill (1998) for example, argue
that firms should avoid using contingent workers in core value creation areas when
the risks of disseminating knowledge are higher than the potential gains associated
with bringing in new staff. Under these conditions the retention of ‘gold collar’
workers and the generation of loyalty to the firm, becomes central. Lepak and Snell
(1999) further extend these ideas, focusing on two dimensions of what they call
‘human resource architecture’: the value and uniqueness of human capital. When
human capital is both valuable and unique, firms are advised to reject this agency
working and focus instead on developing human resources and fostering high
commitment.
Finally, following Purcell et al. (2004) it is possible to identify a further
perspective linked to the work of Baron and Kreps (1999). As with other approaches,
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this perspective points not only to the ‘strategic importance’ of particular kinds of
labour in terms of their core competencies, but also to the degree of social and
technical interdependency. This draws attention to teamwork situations or – as in
many professional contexts – collegial support networks. Here, a high level turnover
associated with contingent work may be counter-productive.
Many of the assumptions made in this theoretical literature are supported by
empirical research on the micro management of professional agency workers. A
number of studies draw attention to the difficulty of using agency workers where
there is a high need for organisation-specific knowledge. Houseman et al. (2003:
115), for example, note that ‘agency nurses were less productive than regular staff
nurses…primarily because of their lack of familiarity with the hospital’s
organisation’. Line management responses to this situation have included devoting
more time to direct supervision of agency staff (Ward et al., 2001), or re-allocating
tasks to them that require less organisation-specific knowledge (Pearce, 1993). These
practices help managers limit the risk of poor performance, but also have certain
hidden costs. Not only is it wasteful to assign temporary workers roles that require
‘significantly less education, skill, and prior work experience than they have’
(Feldman et al., 1994: 57), but this process may also intensify the work of permanent
staff and therefore have damaging consequences for their morale (Allan, 2000: 199).
A further problem identified in the research is that agency staff may lack
generic competencies as well as firm-specific skills (Allen, 2000: 195). This is in part
due to the opportunistic behaviour of some agencies resulting from competitive
pressures to satisfy clients by making placements quickly, and internal performance
management systems that reward the number of placement hours (Grimshaw et al.,
2003; Forde, 2001). The result is that agency workers may not necessarily possess the
competencies the employing authority has been led to believe they possess. There are
also questions about the role played by agencies in managing and developing their
staff (Feldman et al., 1994: 61). This is a particular problem where agency
professionals are concerned. Here the specialist nature of the work means that
agencies often lack the ability to contribute towards professional development so the
client must take on the full responsibility for this (for a discussion of this with regard
to supply teachers, see: Grimshaw et al., 2003).
Another theme concerns the commitment of temporary workers and their
willingness to engage in good citizenship behaviour. A widely held view is that
‘Peripheral workers have a lesser reason to show commitment to the contracting
organisation’ (Colling, 2000: 84; see also: Kunda and Alion-Souday, 2004: 213). This
may be especially pronounced when individuals opt for contingent work as a lifestyle
choice or a means of withdrawing from organisational life (Knell 2000; Casey et al.,
2004). An instrumental stance may also emerge where agency workers see no
prospect of future job security with their employer (Ward et al., 2001: 16), or if they
feel ‘discouraged by the dehumanising and impersonal way that they are treated on
the job’ (Feldman et al., 1994: 54).
Either way, a lack of commitment can have serious negative implications.
First, it can result in high or unwanted turnover, adding to the cost of recruitment,
selection and training. The instability generated by high turnover can also generate
problems with regard to quality of services. Allan (2000: 195), for example, notes
how a ‘lack of employment continuity’ restricted the ability of nurse temps ‘to
become fully equated with the condition, progress and needs of patients and
treatment-plan preferences of doctors’. Second, a lack of commitment leads to the
possibility that employees will withdraw from ‘extra contractual’ activities
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(Grimshaw et al., 2003: 269). Given these problems, a heavy reliance on temporary
workers, it is argued, can seriously undermine service delivery in the longer term
(Beynon et al., 2002; Rubery, 2004; Heery and Salmon, 2000).
A final problem discussed in the literature is associated with conflict and
tension between temporary and regular employees (Geary, 1992; Heery and Salmon,
2000; Rubery, 2004). Such conflicts may arise when there is a sense of injustice, on
either side, over differential rewards (Ward et al., 2001: 14). Houseman et al. (2003:
117) note how the higher pay of temporary nurses (often with only limited
experience) led to ‘serious morale problems’ amongst regular nurses. Feelings of
resentment may also be reinforced by the practice, noted earlier, of transferring more
onerous and complex tasks to permanent employees (Allen, 2000; Audit Commission,
2001). It is possible that this will, over time, come to undermine the commitment of
permanent employees. At worst it might result in a “downward spiral” in which
permanent employees become disillusioned and seek to exit the organisation (Purcell
et al., 2004:718).
However, in much of this literature it is recognised that the costs of managing
agency professionals are not inevitable. While there are situations in which agency
workers are unlikely to engage in discretionary behaviour, this may be moderated by
normative sanctions from permanent colleagues (Pearce, 1993) or uncertainty about
future contract renewal (Forde, 2001; Platman, 2004). Also, weak commitment to the
organisation might be mitigated by the motivating effects of extra pay (Coyle-Shapiro
and Kessler, 2002) or by a sense of professional identity and vocation (Kunda et al.,
2002; Grey and Garsten, 2001). Hence one cannot automatically assume that agency
workers will always lack commitment. Moreover, it may be that costs related to
agency working can be alleviated by local management practices, for example, in
relation to induction training and improved communication (Feldman et al., 1994: 61-
62). The problems of managing agency workers are therefore likely to be variable.
That said, it is also undeniable that a growing reliance on such contracts will be
problematic. Where there has historically been a heavy reliance on internal labour
markets, employment stability and collegial relationships – as in many public services
– the shift to agency working may undermine both the quality of services and the
morale and commitment of professionals themselves.
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The organisational context
The focus of this paper is on agency employment amongst professional social workers
within English local authority Social Services Departments (SSDs). These agencies
were established after 1971 following the recommendations of the Seebohm report,
their function being to assess social care needs and provide (or, increasingly,
commission) services for different client groups (adults, children, and families). In
2002 there were 149 SSDs in England, with a total expenditure close to £12.9 billion
(approximately 1.4 per cent of UK gross domestic product) (Stationery Office, 2001).
Total employment in this sector stands at 277 200 staff, although only a minority,
about 44 000, are social work (or professionally) qualified (SCHWG, 2002). (cid:3)
Although a minority, social workers are the ‘dominant occupational voice’
within SSDs, responsible for the management and delivery of core services (Lymbery,
2001). In most departments they tend to be organised into area teams. These teams
have a management structure and are closely bound by rules and guidelines derived
from legislation. But despite this, practitioners have retained a degree of defacto
autonomy over the way services are provided (Kirkpatrick et al., 2004) and even
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today the emphasis continues to be on collegial relationships based on trust. These
relationships serve both as a mechanism for coordinating work and for offering
support – the latter being especially important in high risk areas such as child
protection (Pithouse, 1989). It is partly because of these demands that SSDs
developed an employment model based on strong internal labour markets. This model
ensured a high degree of stability and by offering job security and career
advancement, served to reinforce professional commitments.

The rise of the professional agency worker in UK social services
Historically, the focus on internal labour markets in SSDs did not completely exclude
the use of contingent work arrangements. In the mid 1990s temporary employment of
all kinds (the majority being fixed term posts) accounted for about 8 per cent of the
total social work qualified workforce (Andrew and McLean, 1995:15). Some use was
also made of agency workers (or locums) to cover absences or work on specific
projects, albeit on a very small scale. More recently, however, there have been some
marked changes in practice. From a negligible level of expenditure in the mid 1990s,
total spending by English SSDs on ‘long term agency staff’ rose from £74 million in
2001 to £114 million between April and September of 2002. It is estimated that 82 per
cent of English SSDs now employ agency staff for a variety of functions and that this
accounts for 2.3 per cent of the total payroll (SCHWG, 2003). This trend is
particularly marked in the London area where the evidence suggests that some local
authorities now have twenty percent or more of their staff employed on such contracts
(Sale, 2002; IDS, 2003). As elsewhere in the public sector, despite the deepening
recruitment crisis and availability of permanent jobs in social services this move into
agency work is primarily supply led (Employers Organisation, 2004; Kirkpatrick and
Hoque, 2004).
While it is perhaps too early to ascertain the full impact of this change on the
organisation of service delivery, there are indications that a shift to agency work has
caused some difficulties. Most obviously this is in terms of rising fee levels,
according to one study ‘not far short of institutional extortion’ (Douglas, 2003). It is
estimated that a newly qualified social worker supplied by an agency will cost
anything up to one third more per week than for someone who is employed on an
open ended contract (about £1000 in direct costs as opposed to £750) (Community
Care, 2003; see also: IDS, 2003: 90-91). Added to this are also reports of growing
difficulties in terms of managing agency workers not dissimilar to those highlighted
earlier. Douglas (2003: 5), for example, refers to ‘angst-ridden teams, staffed by
agency workers, with only one or two permanent staff, run by a beleaguered team
manager’. Others raise concerns about the quality of agency professionals and the
negative impact of labour turnover on service provision (Community Care, 2003;
IDS, 2003). The available evidence therefore points to a number of management
problems. It is towards an analysis of the nature and extent of these problems that we
now turn.

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This paper draws on data collected between March 2004 and May 2005. In total
twenty one interviews were conducted with key informants, including: eleven
professional social workers employed on agency contracts, four local authority middle
managers, three senior managers (and one ex-manager) of employment agencies and
representatives of the British Association of Social Workers (BASW) and UNISON.
Over half the sample – thirteen informants – were women. The sample also included a
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mix of social work functions (with informants from both children’s and adult
services) and geographical areas, focusing in detail on the experience of three local
authorities: one in London and two in the north east of England.
In keeping with the exploratory nature of this study the format of these
interviews were semi-structured. In each case a core set of themes and questions were
covered. Specifically our focus was on the experience and consequences of agency
work both from the perspective of those who perform it and those who are required to
manage it. Interviews lasted between one and one and a-half hours, with all interviews
being recorded and later fully transcribed.
In what follows we present the findings of this study in two main sections.
First, we consider whether professional agency work does result in the kinds of
management problems the literature would lead one to expect. Secondly we look
factors such as local authority policies and management style that explain variation in
the extent to which these problems have emerged.

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Several benefits of agency working among core professional roles were
acknowledged by the respondents within the study. The first concerned the
importance of agency workers in relieving workload pressures for permanent
employees in crisis situations. The social services managers talked about the
psychological boost agency workers give to a team in instances where there are a
number of vacancies. They also suggested a role for agency workers in covering some
of the more basic work at the office that might take a lot of time, but is not the best
use of an experienced permanent social worker.
Benefits were also recognised with regard to the role that agencies can play in
pre-screening potential recruits. Indeed, the ‘temp to perm’ element of agency activity
was an important benefit. Additionally, one agency social worker commented on the
role played by agencies in enabling local authorities to tap into wider overseas
markets in their pre-screening efforts.
Despite these acknowledged benefits, a wide range of concerns surrounding
the use of agency staff emerged. These concerns are considered below

Skills and competencies
Problems here concerned both generic and firm-specific competencies. With
regard to the former, problems emanated from a number of different sources, the first
being opportunistic behaviour on the part of agencies in ‘selling’ their staff. Indicative
of this, one agency manager commented on one of her ex-colleagues who ‘used to
send people out willy nilly without knowing what the client group was, what they
seemed to be expecting…’. Social services managers echoed this sentiment, one
commenting that ‘They sit behind their desk just ringing up trying to get someone a
job and they haven’t got a clue what people are like in the workplace…They are not
interested in that. They are just interested in the pounds…’. As a result, agency
workers did not necessarily possess the generic competencies the employing
authorities were led to believe they possessed. Agency workers were also seen by
social services managers as lacking in generic competencies as a result of the very
limited access to training provision accorded to them by both the agencies and also
the employing authorities. Furthermore, agencies led to a broader concern with regard
to generic competencies, in that they had the effect of keeping people in the
profession that might otherwise not be able to find employment. These people,
described by the ex-agency manager as ‘mavericks’, were ‘in the agency arena
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because they can’t actually manage to get a permanent job’. The quality of agency
staff from the point of view of their generic skills is therefore clearly a matter of
concern.
The second area of concern related to agency workers’ lack of firm-specific
skills. This was a common theme among the agency workers, one stating that he ‘had
to do some rapid relearning of systems…All authorities have got slightly different
systems, you have to find your way around resources….’ Social services managers
expressed similar sentiments, one commenting, for example, that ‘…they won’t know
the policies and procedures of the department, they won’t be in tune with the culture
of the department, they won’t have the same networking knowledge, so everything
takes longer’. As a result, the social services managers expressed the view that agency
workers were incapable of handling the most complex cases as they were unaware of
the available resources. One social services manager went on to suggest that ‘…not
going through our system and not knowing some of the fundamentals, it gives them
an excuse.’ There was clearly concern, therefore, surrounding agency workers’ lack of
firm-specific competencies and the negative impact of this on their ability to perform.
This put considerable pressure on line managers in terms of additional
coaching and supervision activity, with one social services manager commenting that
‘everything takes longer and needs more oversight.’ One agency worker, reflecting on
previous experiences as a manager, complained that it was constantly ‘“Oh Liz, what
do you think I should do?”. I think if you are qualified deal with it rather than come to
a manger to tell you…more supervision, more short-term contacts with managers all
the time because of simple things you would expect them to deal with. Those are the
consequences of having agency staff…’.

Commitment loss
The next area of concern related to agency workers’ levels of commitment.
Clearly, a large proportion of respondents felt this was lacking. Indicative of this were
comments from the ex-agency manager, who claimed that ‘…you don’t have the same
involvement, you don’t have the same commitment’. Similarly, one agency worker
commented that ‘…there is an aspect of people who go into agency and maybe
wanting to take life easier or don’t want to take on responsibilities…And I certainly
have come across agency staff who go home when they go home, end of story,
whatever’s happening…’
These views were not shared universally, however. One agency worker
claimed that ‘Some of the most committed people I have seen…they are agency
workers.’. He added that ‘I have seen people staying behind after work here of their
own volition. I for example have missed some lunch breaks, and I shouldn’t miss
lunch breaks, but I just feel I want to be here and do the work…’. Agency managers
agreed, one commenting that ‘…you will see agency staff coming in at 8 o’clock in
the morning and stay until seven o’clock at night, day in day out. They have got a
very professional attitude…’ It seems, therefore, that there is considerable variability
in terms agency workers’ commitment. Nevertheless, in instances where agency
workers were seen as less committed, this was seen as having several deleterious
consequences. These are considered below.
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One way in which low commitment among agency workers manifested itself
was in minimal compliance, particularly in the form of a ‘nine-to-five’ mentality.
Many of the agency workers displayed this, one commenting ‘…on the whole I clock
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off at 5 and that’s it, I go home and don’t really think about it…’ The social services
managers agreed, one stating ‘I think it’s much easier for them to walk out the door at
5 o’clock and not to feel that they have responsibilities in terms of supporting the
team or the organisation.’. Similarly, the Unison rep commented ‘…the
difficulty…was people just clocking on and clocking off and that was it.’ Unlike their
permanent counterparts, many agency workers were apparently unwilling to work
‘beyond contract’ in a manner consonant with the ‘public service ethos’ that has
traditionally pervaded social care.
Minimal compliance also took the form of an unwillingness to take ownership
of local authority goals and priorities. This in itself was at least partly explained by
the desire of agency workers to escape from the more onerous elements of
bureaucracy within the job. An example of this related to the attitude of agency
workers to local authority targets, with one commenting ‘I’m not going to lose any
sleep if [Authority X] have one star, two stars or three stars…I’ve opted out of all the
big events…and all the other stuff that is ongoing in the Authority. He also added ‘I
don’t care if you’ve only got 90 percent success rate, as opposed to 95 percent…I
don’t give a monkey’s. I’m doing my stat visits, thank you very much, I’ll take my
money, bye.’ A sense of psychological detachment among agency workers would
seem to have resulted in an unwillingness to go the extra mile in terms of taking
ownership of matters considered important by the authority as a whole.

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Low commitment manifested itself further in the form of rapid labour turnover.
Agency workers were fully aware of their market power, given severe labour
shortages, to pick and choose the authorities within which they were prepared to
work, with one commenting ‘…I know that when it gets too much I can just have the
facility of giving a week’s notice and take off and find somewhere else…’. Social
services managers confirmed this also, with one commenting that if ‘the work that
they’re doing…moves in a particular direction and they don’t like that, they will just
finish’, adding that this is ‘…not unusual at all…’.
High turnover was seen as having a number of negative consequences. First, it
created problems relating to continuity of care. This had a number of implications for
the quality of service that departments were able to provide. At the very least, it led to
a sense of confusion among clients, with one social services manager commenting
‘…with agency workers constantly coming in… every six weeks, these children found
that they’d got a new social worker’. She continued by explaining how a lack of
continuity can lead to serious breakdowns in care: ‘…the child is starting to build up a
relationship and then…that person is gone…they’re being left with nobody who
bothers … who cares about you…’. The majority of the agency workers supported
this view. Indicative of this, one recalled an incident in which, on meeting a client she
had previously worked with for a short period of time, the client commented: ‘Why
did you have to leave? You were there and you really helped me, you really sorted my
head out, and then when you left it all kind of fell apart’. The agency worker’s
sentiments following this interchange were that ‘…It all does make you feel a bit
guilty, but you can’t stay just because of one person.’ Perhaps more serious still, the
ex-agency manager suggested that a lack of continuity of care led to serious health
risks for clients: ‘…If you’ve got workers dipping in and out of situations…they don’t
know the client – I know situations where there isn’t adequate handover: the client has
got diabetes, the temp doesn’t know that the client has got diabetes, and goes in
blindfold…so…it’s bound to have a significant effect.’
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