Are fully-owned port labour pools falling out of favour, asks Alex Hughes
The recent decision by APM Terminals in Gothenburg to abandon a pool of labour shared by various terminal operators and instead establish a partnership with employment agency Adecco surprised many. But it's a model that is fairly common in the US.
Temporary labour provider, PeopleReady, has long been active in this market, says Zandol Whited, the company’s director Ports & Terminals.
“As vessel sizes get larger, ports are often faced with a shortage of permanent workers. In those instances, terminal operators often turn to temporary labour providers such as PeopleReady. However, this is largely determined by whether a terminal operating company is union or non-union," she says.
Ms Whited expects more terminal operating companies to follow APM Terminals’ lead, as a growing number of terminal operators come to rely on external agencies to deal with the tighter labour market.
“Macro trends, including an ageing workforce, the decrease in vocational skills training in schools, and the shift in how younger generations view careers options, are having a transformational effect on the new world of work," she says. "The consistent flow of new union candidates has slowed significantly and growing concerns over national security have tightened the requirement for credentials. Given these factors, operators will be forced to look at other resources for qualified labour."
In Finland, unlike in neighbouring Sweden, the use of casual port workers sourced from temporary agencies is totally forbidden as are labour pools serving multiple terminal operators. Rauli Pohjola, senior vice president and personnel director at terminal operator Steveco, notes that this situation has come about following an agreement with unions. Nowadays, terminal operators have to have their own reserve of labour, which in turn is governed by terms and conditions set out in the Temporary Workers System.
As Mr Pohjola explains: “If a company uses more than 10% of temporary workers compared to the amount of permanent workers on its books, that employer has to hire more permanent workers from those providing its casual labour. This is known as the 10/90 rule. Nevertheless, the terms of the contract are very flexible.”
Indeed, “permanent” employment can last for just one working shift at a time, after which there is no further commitments on either side. These workers are "listed" as being part of a company’s reserve labour pool and go to work as and when are needed, which can also be at very short notice.
Steveco, which operates across several ports in Finland, most notably at Kotka, where it manages three terminals, has had to find additional labour as vessel sizes continue to grow. However, these peak working periods can see permanent workers moved between terminals or temporary staff brought in from the company’s own pool of casual labourers.
Mr Pohjola concedes that the Finnish system is not perfect, however, any change would need to address the system as a whole and not simply individual details, he says.“Because of that, outsourcing the supply of extra workers would not be an answer on its own. You have to look at the whole situation holistically and think how you could make improvements which benefit all parties while maintaining the current balance.”
Commenting on APMT's decision in Gothenburg to cease working with the port’s casual worker pool and instead cover peak periods using temporary workers drawn from Adecco, Mr Pohjola says that such an arrangement might work in Finland, too, giving it more flexibility during busy periods. But, again he stresses that such agreements are currently prohibited in Sweden’s easterly neighbour.
He also retains reservations about labour pools shared by more than one terminal operator.
“While such an outsourced system might increase flexibility and reliability at peak times, if there are peaks at more than one company, who decides the priorities in that system? Who gets the extra workers if there is high demand and low supply?” he asks.
Nevertheless, as far as Ms Whited is concerned, the shift in sourcing workers from external agencies will absolutely increase flexibility and reliability at peak times.
“More and more terminal operators are looking at contingent staffing and strategic workforce management as a cornerstone to increasing productivity. The name of the game is production, and a well-trained pool of port workers is the way to win,” she says.
Crucially, Ms Whited believes that terminal operators can save money by outsourcing additional employee recruitment and they need not necessarily be losing out on skills, either.
“At PeopleReady, we have deep specialisation in marine staffing. We customise comprehensive dock-to-destination staffing solutions, with safety, compliance, and productivity requirements at the core. We offer advanced productivity analysis, sophisticated back office support, workforce risk mitigation, and standard compliance and oversight. Simply put, it saves money and makes our customer’s lives easier and more productive,” she argues.
Mr Pohjola is not so convinced. Extra services usually mean additional expense, he warns, which would impact on price. Yet, “if good quality port workers were available from external agencies in your market, it might nevertheless prove an interesting extra option for operators", he says.
In addition, with pooled labour, there must be enough work available so that extra workers can make a living from this system and that companies using it have enough labour available to them when required.
As for the quality of labourers sourced from external agencies, Ms Whited recognises that there is currently a shortage of quality in the industry.
“It’s no secret that finding qualified workers is a big challenge. An external agency can be a big asset as long as they are marine staffing specialists – experts at marine recruiting, and hiring and mobilising reliable general labourers and skilled tradespeople,” she says.
In order to be successful, there has to be rigorous recruiting, screening, hiring and a deployment process, which doesn’t simply end “with a background check and a pair of gloves”.
PeopleReady, for example, specialises in providing ports and terminals training programmes which are customised to the individual needs of the customer. Only by doing this, stresses Ms Whited, can an agency attract and retain the qualified workforce its customers need.
Filling the books
But can agencies get enough workers?
This, she adds, involves a true partnership. As long as communication and expectations are clear, and there is reasonable time to find and mobilise qualified workers, then for the vast majority of time PeopleReady is successful in finding enough workers.
“Understanding specific labour needs, combined with proactive, multi-channel recruiting campaigns, allows us to build a deep bench of qualified talent to ensure that our clients never run short,” she says.
Ms Whited is adamant that maintaining a high degree of expertise in a terminal operator’s workforce doesn’t necessarily mean keeping a permanent pool of workers of its own. “In fact, thanks to the extensive training programmes we have in place, at PeopleReady, as well as the strategic partnerships we have with our customers, we are able to maintain a workforce with a high degree of expertise. While an associate may not work for the same customer full time, they are working consistently within the industry, at multiple port locations. This helps build a more diverse workforce with more readily available skills,” she says.
INSTILLING WORKER LOYALTY
Sourcing staff from shared labour pools or from third party agencies throws up the same question of worker loyalty: if there is no attachment to the terminal, will workers be willing to give 100% all of the time?
PeopleReady's Zandol Whited believes that this is a moot question as the traditional idea of 'loyalty' is being refined as the new world of work changes rapidly.
“Candidly, worker loyalty is not what is was many years ago," she says. "However, overall, we see surprisingly strong loyalty within a contingent workforce. The next generation worker often prefers to work for multiple companies located within a port. Many are energised by the opportunity to learn new skills and become a top performer at multiple companies, which translates into more rewarding advancement opportunities.”
Steveco's Rauli Pohjola believes the issue is less clear cut. “They would still be professionals and professionals are generally loyal, if the rules are clear and fair," he says. "This is the same situation at it is now in Finland. For example, when we train our temporary workers, but there is not enough work them, they might move to another company's list. It's our loss, but highly understandable from their point of view. Using external agencies might be helpful in this area,” he says.
“With the exception of crane operation, we train our temporary workers in the same way that we do our permanent workers, since we need their expertise and skills. The current system makes its possible and is beneficial to both groups.”
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