The pros and cons of using temporary employees

There are different reasons why a company will use temporary employees. One being the job position is for a limited time; for instance, while an employee is out on maternity or sick leave. Then there are companies such as those in the industrial field that prefer to only hire temporary workers for jobs that aren’t management positions, such as laborers.

Anyone that owns or runs a business knows the expense that comes with bankrolling a business. Payroll and overhead can drive a business straight into bankruptcy if the costs aren’t kept under control while maintaining the business.

When is the right time to use temporary employees versus hiring full-time,or is freelance workers the new thing on the horizon? Well, the answers depend on the company, the direct need and the availability of help.

What are temporary employees?

Temporary workers are employees that perform duties but aren’t direct employees of the company providing the work. The majority of these jobs are often short-term positions that are meant to fill a temporary need.

The reason for this is not due to the employee quitting or getting fired; it strictly is a tool to bypass the hiring of a full-time employee and to fill a gap. Temporary employees can be full-time, part-time, casual or on an as-needed basis.

Most temporary worker positions last for a year or less. Such employees are often employees through a third-party contract service otherwise known as temporary hiring agents. It is not required for a company to utilize temp services to have temporary workers on board.

Businesses that have high turnovers in categories such as construction workers will employ a temp agency to prevent having to screen and hire employees on a continuous basis. It is often easier weeding out the good employees from the bad ones when you aren’t responsible for the hiring and training ahead of time.

Temporary agencies must follow hiring protocol that the company establishes before they can send a worker to the job site. For instance, if a company is using a temp agency to find a secretary for a six month period with requirements that the worker has computer skills and possess an associate’s degree in business administration, the temp agency cannot send anyone with fewer credentials.

The pros to using temporary employees

  • Accommodates fluctuating workloads: Seasonal jobs and holidays often show an escalation in sales or production calling for a need of extra workers during peak periods of a year. For instance, holidays tend to have soaring sales and will require additional sales personnel.

Other situations could be a client has asked you to complete a large project that would not justify hiring additional employees just to do layoffs when the job hit completion. Temp employees are there to carry a company through a busy peak time but will go back to its regular staff when business slows down.

  • Help in finding competent future employees: If the company you own or manage hires a lot of regular employees, and you aren’t happy with turnovers due to unskilled individuals, using temp workers allows you to see ahead of how a person is as a worker.

If the temporary employee is a good match for the position available within your company, you have the option of offering them a full-time position. Using this strategy allows you the chance to evaluate a worker without the commitment of a long-term position.

  • Monetary benefits: Though businesses are required to offer some benefits to temporary employees, vacation pay, health insurance, retirement plans and sick pay benefits do not have to be part of the package.

Such expenses can run a payroll tab up fast and in high numbers. By not being required to offer these benefits a company stands to save a lot of money. It is the temp agency’s responsibility to withhold any taxes required such as worker’s compensation and unemployments insurance.

  • Minimal payroll responsibilities: By using a temp agency there will be fewer payroll responsibilities. The temp agency acting as the hiring company will be the ones responsible for bankrolling the pay of all workers that are employees associated with their employment.

These responsibilities can be a full-time job for an in-house employee to maintain. By hiring through an agency the payroll burden shifts.

The cons to using temporary employees

  • Time wasted on training: Regardless of the individual’s skills, temporary employees are there for a short period. All new hires require some level of training, and with temporary employees, the money spent for training is only for short periods of time.  On some instances, the training cycle will take up a lot of the time the employee is under contract.
  • Legal issues could rise: If you hire employees for temporary employment, be sure you document your purpose for their job. It can easily get confusing as what differs between a “contractor” and a “temporary employee.”

Be sure to classify the position whether it be as a temp or contractor. By doing so will save you conflict in the long run.

  • Low level or competence: With temporary employment, many workers are there just to make a quick dollar and move on to the next big thing. With this mindset, they typically aren’t as devoted to your company as what a full-time person might be.

Staffing agencies are known for hiring a warm body to fill a job post with no necessary skills other than to just show up. Either way, they will get payment for that person whether they show real skills or loyalty to the company.

Chances are you will go through many temp workers before you find one that cares about their performance while producing at low or mediocre levels.

As you can see, there are pros and cons with making a choice to use a staffing agency to find workers whether it be for short-term or you are considering recruiting for a full-time position. Depending on what skills you require to complete the tasks on hand, going with an agency could be what fits your company best.

Meeting with your Human Resources leaders to decipher what your goals are in the long run should be your first step. If you are just trying to get through a busy cycle, using a temp agency may be right for you. If your goal is to hire for long-term employment, following new hire protocol with long-term benefits may be the likely choice for your company.