A national employment agency has tapped Diebold Inc. to give temporary workers the option of getting paid daily in cash.

Labor Ready, a Tacoma, Wash.-based firm that matches skilled and semiskilled laborers with temporary jobs, is buying 450 cash dispensers for its 390 offices.

Diebold, North Canton, Ohio, will supply and service the machines, which are to be installed by April 1.

Basic cash dispensers, more limited in function than automated teller machines, are proliferating as companies and retail stores seek more ways to serve people who lack bank accounts. Cash dispensing by machine also tends to be cheaper than relying on check-cashing services.

Labor Ready says more than half its workers are unbanked. All are accustomed to being paid daily by check.

Automated cash dispensing is "going to be a wonderful recruiting tool," said Glenn A. Welstad, president and chief executive officer of Labor Ready. The construction workers and other manual laborers who seek jobs through his agency prefer the privacy and immediacy of being paid in cash.

"He doesn't have to have somebody look at him when he is handed a check- it's his private business," Mr. Welstad said.

The machines are also good business for Labor Ready, which will charge $1 per transaction.

Though the company still must pay the cost of printing and distributing daily vouchers, it will save 13 cents for each check it does not have to process. Labor Ready expects to distribute 6.4 million checks this year.

"We are able to reduce Labor Ready's check-processing fees, while providing enhanced service and convenience to Labor Ready's workers," said Thomas J. McBride, Diebold's director of worldwide product marketing.

Mark Walter, an electronic banking consultant in Birmingham, Mich., said temporary agencies may be the next frontier for cash dispensers. Given the large turnover rates-temp workers readily leave for permanent jobs and assignments from other agencies-distributing paychecks can be costly.

"It's not like you can use your internal mail to distribute paychecks," Mr. Walter said. Using cash machines is "a great match and a great idea."

Temporary workers are a growing segment of the labor force, according to the National Association of Temporary and Staffing Services. Corporate downsizing, plus companies' interests in flexible staffing arrangements, has prompted a doubling in the total of daily temporary workers, to 2.3 million, from 1991 to 1996, the association said. These payrolls increased 121%, to $31 billion, in the same period.

Labor Ready requires all its workers to report to its offices every day, then return at the end of the workday to be paid.

Workers who elect to accept cash will get a voucher with a number on it to enter into the dispenser, a stripped-down version of Diebold's 1064i. The vouchers take the place of an ATM card.

"Adding cash payments to the equation will help us keep those employees, even if they move to another city," Mr. Welstad said.

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