Hiring Temporary employees can be a cost-savings strategy for managers. There are pros and cons of hiring temporary employees. Temporary Employees differ drastically from Contract Employees. Choosing the right staffing agency to navigate the land of Temporary and/or Contract help is important.
What Is A Temporary Hire?
A Temporary Hire is when Agencies lease out (or employ) Assignment employees “On Assignment” to the employer. These assignment employees are the Agency’s Employer of Record and all necessary source deductions are deducted from the agency’s payroll. The employer can scale up the temporary help (during the employer’s busy season) or scale down the temporary help to match the pressing needs of the employer’s business. This is very useful over direct hiring where the employer has to worry about furloughing or laying off a permanent employee especially during slow business times.
An employer can use Temporary help from an agency in a variety of ways. They can use temporary help if the employer wins a major contract or acquires new contracts or companies. Another scenario would be if the manager needs to ramp up staff (on a contractually basis) to meet the demands of the new client. For example, if a food manufacturing facility is awarded new contracts from their existing customers, the manager can use Assignment Employees to ramp up their General Labour, Material Handlers and Quality Inspection teams to meet the demands of the new contracts. This is where temporary employees can help you greatly in managing the ebbs and flows of the business.
Vice Versa, when the contract ends, the employer can tell the agency that they do not need anymore assistance with the project and the employer can scale back the temporary employees without any hurdles to the existing business at hand.
Cost / Benefit Analysis of Temporary Employees
Having Assignment Employees not on Employer’s payroll can be a major advantage to the employer. Human Resources does not have to worry about conflicts or payroll source deductions. The Managers can focus on what is most important – meeting the demands of the customer. Any issues with the Assignment Employee can lead back to the Temporary Agency as the staffing company can quickly shuffle and change the employee in a quick instance. Benefits, Pension Plans and severance packages to the Employer will be non-existent when hiring Assignment Employees from a Temporary Recruitment agency.
From a Budgeting stand point, the Temporary Agency appears as an Expense line on a P&L Report. All liability on the temporary employee is put on the Recruitment Agency that has provided the temp. The employer can literally use the temporary employee as a “Test Run” before hiring the Temporary Employee as a full time employee.
There’s a Pandemic – Does This Mean An Increase In Temporary Hires?
The pandemic has changed the recruitment landscape. With the pandemic, I have seen a decrease in Direct Hire / Permanent Hires since March 2020. Our Direct Hire / Permanent Recruitment Business dried up almost over night. We found that existing customers were putting their Direct Hire Search requirements on hold. Companies didn’t want to take the risk of hiring and on-boarding new employees fearing that the business cannot support the direct hire.
Vice Versa, there has been in increase in Temporary Hires since March 2020. Companies like the option of trying out a “Leased” employee from the agency prior to committing to the employee full time. This makes sense since the liability and the risk of hiring a new employee is significantly greater during pandemic times. New Covid related jobs started to emerge in our recruitment landscape. Who would have thought that recruiting agencies would be looking for “Thermal Testers” or “Covid Case Managers” or “Contact Tracers” on temporary assignment 5 years ago. Now, these jobs are the new normal in what is called the “gig economy”