Staffing is one of the most complicated processes in business operations – unless your business is rocket production. When hiring temporary vs permanent employees can add to the complication. There are so many moving parts including recruiting, legal, tax, contracts, training, benefits and even state workforce compliance. Then there is the affordability factor. It takes a lot of money to find, employ, train, retain, and even terminate employees. Labor is one of the biggest expenses for most companies, but if done correctly, it can be one of the best investments. The trick is to know when to hire temporary vs permanent. When does it makes sense to commit to a permanent hire, versus seeking out a temporary employee from a reputable staffing agency.
- You do not have a dedicated Human Resource Department
If you don’t already have an established Human Resource Department, you really should seek out a staffing agency for temporary help. There is a lot of paperwork involved in the employment process. The work doesn’t end once you get through all the legal loopholes to begin hiring. Once you’ve concluded all the federal forms and set up proper withholding, you then need to consider where your employees will go if there is an issue with their paycheck, want to change their bank for their direct deposit, the state informs you of child support withholding, debt wage garnishments, Medicaid wage verification, housing or credit wage verification…..you get the idea.
If you don’t have dedicated staff to dealing with these issues, they will either consume you, or cost you a ton in late filing and penalties. Without HR, you will undoubtedly spend more money trying to staff DIY style, rather than just going to an agency that takes care of all these things for you. They also take the time to shop benefit providers, wellness programs, investment options, etc.
- You do not have a well-developed training manual/process
The point utilizing temporary staff is to save money by hiring someone for a specific job with exceptional efficiency. This is almost impossible unless you have the training aspect worked out. Learning by experience takes a lot longer without a foundation of education. You could very easily find yourself in a situation where you are spending the bulk of your labor budget on training employees, rather than actual production. Since temporary staff cost more up front, when hiring temporary vs permanent can be a tricky decision. But if you bring on a temporary employee, be sure to be prepared immediately and get them up to speed quickly to ensure you keep your costs under control.
- Specialized Projects and Time Sensitive Projects
The recruiting process is difficult enough, without adding to it the need for a specific skillset or having a time restriction issue. When hiring for a project that requires a special skillset, it’s often best to use a staffing agency. They can quickly move through their pool of candidates and help you find the needle in a haystack you are looking for. The onboarding process is also hugely beneficial, as they have already completed most of the employment paperwork with the agency and so there is very little to do, once you’ve selected your candidate. Plus the agency generally is the company of record and handles all payroll, taxes, etc… making your life a lot easier to get the person started quickly. When to hire temporary vs permanent often can come down to is the project going to take a year or more or just a few months of clean up work.
- Hiring Influencers
Everyone who works for an organization contributes to the overall work culture and environment. Having said that, there is a difference between contributors and influencers. Influencers are those who make a big impact on the day to day work life of several other workers. This can be management, department heads, and even trainers and floor support staff. Their interaction with employees in large part influences the organization’s internal culture more than its mission statement. For these key roles, consider using permanent staff. If you want to foster and create a specific environment, then you must allow these influencers to develop the culture over time. People become loyal, not to a company alone, but to the people within it. Having influencers that stick around will usually lead to a lower turnover rate and lower job dissatisfaction across the board. If you are having trouble recruiting a good candidate for one of these positions, you can reach out to a staffing agency with the expectation of the job becoming permanent after a trial period.
- You’ve been in business for less than two years
Every business is different, but if you’ve been in business for less than two years, using temporary staff is at the very least worth considering. There are of course the actual logistics of hiring staff that can be overwhelming atop the massive undertaking of developing production systems, marketing, and so on, but it can actually be a way to test what works for your company. No doubt you had to present a business plan in order to receive your funding, however what you are probably experiencing now is that all the forecasting was just a guess….an educated guess maybe, but still needing a lot of adjustment.
The beauty of temporary employees, is if you find your operations and flow charts are not working how you predicted, you can always alter the model, without having to fear unemployment and severance packages. You can also tweak schedules, hours, pay rates, job titles, etc based on what your needs are. Temporary employees are an incredible way to keep your business responsive and thrifty as you fine tune your framework.
Hiring temporary vs permanent is a tough call, here are other helpful posts regarding the hiring process:
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