Health-care Reform's Silver Lining for the Staffing Industry

As 2012 draws to a close we are just over one year away from implementation of the Affordable Care Act. By the time January 1, 2014, rolls around, lawyers and accountants will have figured out exactly what employers must do to comply fully with the law (but without committing more of their resources than necessary).

Many temporary employment agencies worry about what the new law will mean for them.

In particular, they fret about how to handle possibly paying for benefits for each fulltime temporary employee they hire or paying a $2,000 fine for each employee on their payroll (minus the first 30) if they choose not to offer coverage. The prospect of managing such a high cost is daunting, to say the least, and many staffers shudder to think about how they’ll manage it.

My recommendation to all consulting and temporary agencies out there is to heed the sage words of Douglas Adams: “Don’t panic.” Yes, there is the potential that you will be see a substantial increase in overhead costs. But I am convinced that the long-term gains will outweigh those up-front costs.

Few people currently regard temporary or consulting work as their top choice. In addition to being inherently unstable (in terms of duration) and lacking advancement opportunities, temp work has one other major shortcoming when compared to regular work: no benefits. Temps usually don’t get paid time off or provided health insurance. As health-care costs continue to climb and newspapers continue to run attention-grabbing headlines about families forced to declare bankruptcy because they can’t pay their medical bills, whether a job has benefits carries nearly as much importance what salary it has. One of the main questions job seekers ask about a position is “Does it include health insurance?”

Most people take temp work as something to do on the way to a “real” job—that is, en route to a permanent position with benefits. But when temp work includes health insurance (as many temp positions will under the Affordable Care Act), then temporary employment becomes much more appealing to workers. And when that happens, consulting and temporary staffing agencies will begin attracting higher-quality candidates. In the past those candidates would have preferred direct-hire, permanent positions, but with provided health insurance more of them will actively choose temp work.

The result? With health care on the table, skilled employees are more likely to consider temp work as a first-choice option. And with more high-caliber workers available as temps, both staffing agencies and their clients will enjoy greater stability—and better quality—among their employees. In short, everyone wins.

Obviously, your own legal and financial experts will advise you on the best way for your firm to implement the Affordable Care Act. But until you have all those details sorted out, console yourself with the thought that these new costs (and accompanying increased bureaucracy) do have a silver lining. The new road may be a little bumpy as you head out of the gate at the start of 2014, but eventually you may find the journey to be worthwhile.

 

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