Today, it is not unusual for workers to have multiple job titles during the span of their professional career, due in part to advances in technology and changing job descriptions. To mitigate the transition from one job to the next, many of these people turn to temporary staffing agencies as a way to learn new skills, increase their networking opportunities, and help them stay relevant and employable during a down economy.
As a result, savvy business owners and managers are changing their hiring strategy to include both permanent and temporary employees, in order to meet their objectives and develop an effective workforce.
Let’s consider some of the advantages and disadvantages of each type of employment.
Benefits of hiring temporary employees:
- Access to specialized skills - The traditional ‘temp’ talent pool has evolved from the general laborer and receptionists, and now includes people that are highly skilled in virtually all industries. This gives you access to almost any specialized skill you need to quickly complete one-time projects.
- Lower cost - Get manpower at reasonable costs without having to pay for expensive benefits packages. Generally, it is more cost effective to hire a temporary employee for short-term assignments. Similarly, if you are using an agency, you won’t have to bear the cost of recruiting, testing, doing payroll and tax deductions, because the temporary employee is employed by the agency.
- Evaluation without commitment - By employing potential perspective candidate on a temporary basis you can evaluate their performance while on the job. The benefit here is being able to see how effectively the candidate will perform without having to make a long-term commitment.
Disadvantages of hiring temporary staff include:
- Loss of in-house experts - Using temp workers is an ideal solution if your business has specific jobs that require special skills, however, it doesn’t allow your own in house staff to upgrade or acquire new skills. The nature of your business and how often you require specific specialized skills will determine if it is worth having an onsite expert compared to using a temp for each special project.
- Additional costs - Depending on the position, using a staffing agency to find a qualified temp worker could be more expensive than recruiting a new employee. Most staffing agencies require a fee to use their services as well as a percentage of the temp worker's salary. Therefore, it is important to fully understand the agency’s compensation structure and fee schedule.
- Disruption in workflow - Each time you hire a new temp worker, they have to be brought up to speed with how your company operates and of course the specifics of the assignment. This constant ‘starting over’ process is disruptive and could greatly impede the progress of some projects.
Benefits of hiring permanent employees:
- Loyalty - Investing in a permanent employee is an investment in their loyalty, which translates into more productivity because they are personally invested in your company’s success. This also creates a willingness to wear multiple hats to achieve the goals of the business.
- Seamless workflow - Permanent employees do not have to ‘restart’ for every new job assignment, as they are already familiar with projects and your business processes, which ensures the workflow is consistent and uninterrupted.
- Stability - As a fixed part of your staff, permanent employees offer you a welcomed level of predictability and stability, allowing you to be more strategic when making long-term plans.
Disadvantages of hiring permanent employees:
- Limited skill upgrade - Although permanent employees develop expertise in their respective fields, they are often limited on the time and resources required to learn new skills. This challenge is compounded when employers use temp workers to complete tasks that require specialized skills instead of training their in house staff. Unfortunately, this leaves permanent workers and more importantly, your business at a disadvantage when a new application or technology is introduced.
- Higher expenses - Insuring permanent employees can be expensive, especially for small and new businesses with limited working capital. With permanent employees comes extra overhead, i.e. processing benefits, payroll, providing training and tools, and the rental fee of the space impacts the total cost of employing permanent employees.
- Recruiting efforts are expensive and time consuming - Finding the right talent for your workforce is a time consuming and costly endeavor. Diverting time and resources required to list open positions, screen candidates, and interview them can stall projects and reduce productivity.
Final Thoughts
Developing an effective workforce requires the same energy in planning and consideration as it does in creating a business plan or digital marketing plan. The reality is that both types of employment have varying degrees of benefits and challenges. As such, whether you choose temporary or permanent employees, or a combination of both, defining your company needs is the first step in successfully creating and managing an effective workforce.
ChangeU: For your independent study ...
White Paper: The talent shortage continues - How the ever changing role of HR can bridge the gap http://bit.ly/1xVonjD
Bureau of Labor Statistics http://stats.bls.gov/
6 Unique Ways to Build a Better Talent Pool With Social Media | The Staffing Stream http://bit.ly/1zw22uX
