Have you been considering bringing in temporary employees? It can be an appealing solution to your workforce needs. Temporary employees work in all fields and across a broad spectrum of positions, from clerical help to accountants to engineers.
They can represent an opportunity to scale up a workforce and pare it down, according to seasonal workflow and business conditions, in a convenient way that wouldn’t be possible with salaried employees.
Many companies use temporary employment as a kind of unofficial try-out for permanent salaried employment. Good temp employees may be made a job offer if the company needs a full-time permanent employee. Roughly 43 percent of companies that use temps utilize this method of hiring full-time employees.
But before hiring temps, it’s important to know if temporary employees actually cost less, and to take into account important legal considerations for bringing them onto your team.
1. Do Temps Actually Cost Less?
When doing a cost-benefit analysis of hiring temporary employees, you need to compare the costs of hiring a full-time employee.
Part of those costs, of course, are recruiting: Everything from drafting the job posting to reviewing resumes to interviewing costs time and effort from existing employees. The time they spend recruiting is time spent not doing other tasks.
Part of the costs of hiring a permanent employee are the onboarding and training involved.
Altogether, Fast Company estimates it may cost as much as $50,000 or more to hire a permanent employee.
Then, of course, should the hired employee not work out, they must go through a termination process and someone else be hired, starting the cycle all over again. While the job is vacant, there is lost productivity for your business.
Given these costs, hiring temps may be cheaper. While temp staffing agency recruitment efforts and onboarding and training may be necessary for temps as well, staffing agencies often are familiar with good temps, so these efforts may take less time. Temps can also be let go without a termination procedure.
2. Legal Considerations
As more and more of the U.S. workforce becomes temporary and contract based, it’s important for companies to distinguish between temps and contractors and what each type of worker is legally due.
Contractors are paid by the companies they work for, but they do not have taxes and related withholding taken from their paychecks. So, for example, a contract worker will not have Social Security, state unemployment taxes, or workers compensation deducted from their paychecks.
Temps, on the other hand, do have all these items withheld from their paychecks. A temp worker hurt on the job, as a result, will have access to workers comp, while a contractor similarly injured will not. In this, temps are more like permanent workers than contractors are.
Also, companies need to realize that, just because temps don’t work for the company (they work for staffing agencies), it doesn’t mean they aren’t covered by Federal and state laws concerning employment. Temps are fully covered by all labor laws, including health and safety regulations, anti-discrimination, and harassment.
Hiring temporary employees can be a good solution to business needs. You need to consider the relative expense of temps versus permanent employees and be aware of legal considerations. For more info on acquiring temporary employees, contact Nesco Resource today.