The use of temporary workers or “temps” as they are commonly called, has grown over the last several years. As the economy has tanked in many areas, the increase in augmenting permanent staff with a contingent workforce has gone up. A research study Contingent Labor Management conducted by Aberdeen Group early in 2011, indicated that as many as 22.5% of the 300 companies polled used contract workers to handle tasks on all levels. This can come with some advantages and disadvantages at times, however.
It’s obvious that there are many pros and cons of using temps.
Here are some of the most common benefits and problems with using temps to consider:
Reduce labor costs – One of the best reasons to use temp employees is to cut labor costs. These can range from placing help wanted advertisements and background checks, to training and overtime costs. When you use a contract workforce, you can eliminate many of these costs, and offset peak production times with temp workers who are eager to provide their hard work for as long as you need them.
Eliminate recruiting work – A lot of time and effort goes into recruiting even a single employee. When you decide to hire temp workers, you essentially shift these duties onto another capable team of recruiters and career professionals.
Reduce benefit requirements – The requirement to provide benefits is on the minds of all employers, especially those that have a large number of full time eligible employees on staff. In order to offset the costs of bringing more full time employees on, consider the use of part time temps to get the same amount of work done without benefits (which can be supplied by the temp staffing agency at no cost to you).
Eliminate hiring mistakes – Every manager has made a poor hiring decision, that may have cost the company thousands in wages, benefits and lost productivity. Instead of worrying that your next hire may be a dud, consider how beneficial a temp worker may be. Temps are pre-screened and their skills are tested beforehand. Many temporary agencies also allow you to replace a temp with a 24 hour notice too, in case the worker doesn’t meet your standards.
Avoid unemployment claims – One of the bigger issues that companies face today is that of unemployment claims, which can range in the thousands of dollars for even one employee let go. To avoid this all together with, choose temp workers to do the job. If you decided to not keep a temp, for whatever reason, you can replace them or let the agency deal with an unemployment claim because you are not legally responsible,
Higher wage rates – When you use temporary workers, expect to pay between 15-20% more for their hourly salary. This is because you are not only paying the employee a fair wage, but the staffing agency includes their fees in this rate. While this may seem high, remember that the temp worker may only be on staff for a few days to a few months, and you will be able to hire the temp when this contract expires, reducing this hourly rate.
Contract buyout fees – If you decide you have found a perfect fit with a temp and you want to keep him or her on staff permanently, you are generally entering what’s called a “contract buyout” phase. During this time, you can either wait out the time period of the contract or snag the employee now buy paying the difference in their salary for the remaining contract time period,
Inability to build teams – Unfortunately, many times permanent employees view temps as just that – a barrage of warm bodies who have no real value to the overall team. Temps may not be treated with much respect by others, and they may even be perceived as a potential threat by long term workers who have grown to be less motivated.
Possible lack of commitment – An issue with few temps is that they may not seem as committed to the business objectives as permanent employees. This is really on a case-by-case basis and how the temp is treated on the job, if there are opportunities offered for long term work, and if they have good overall work ethics.
Reliance on agency screening – Another concern of HR when using temps is the over-reliance on agency screening to weed out problem employees. However, the company may request a copy of the background check results and is free to conduct a thorough background check before perm employment is offered, if this is the case.