Personnel decisions are some of the most important decisions to be made when running a business. Those staffing decisions, such as hiring temporary employees vs. full-time employees, are essential aspects of effective management. Several factors have to be considered when deciding if you want to handle your staffing needs through temporary or permanent employees. Understanding scheduling strategies, long-term vs. short-term staffing needs and other financial forecasting tools can help you make the right hiring decision.
What is a Temporary Employee?
Before we dive into the benefits and drawbacks of hiring temporary vs. permanent employees in your business, we should make sure to have a sound understanding of what the terms mean. You know what a permanent employee is. However, the term “temporary employees” can have a somewhat variable meaning. First of all, temporary employees are those employees who hold a position that is set to last for a short, predetermined period.
There are no fundamental guidelines that determine how long temporary employment has to last. For instance, some retail stores may want to increase their available labor during the Christmas season, so they hire temporary employees starting in November and take them off the schedule around the New Year.
Other examples of temporary employment include small businesses that use the services of a temporary employment agency to fill temporarily replace an employee who has taken an extended period off due to the birth of a child, an illness, or another unexpected situation.
If you decide to use temporary employees, you must do so the right way. Make sure that the employee understands that there is an end date to their employment with your company. Failure to do so is not only unethical, but it could potentially lead to litigation.
Temporary vs. Permanent: The Pros and Cons of Each
As is the case with any staffing decision, the decision between using temporary vs. permanent employees must include an evaluation of the pros and cons of each side of the coin. Ultimately, hiring temporary employees vs. full-time will depend on the type of business you run, your budgeting abilities, and a myriad of other factors.
Pros of Temporary Employees
- Temporary employees can help meet your company’s short-term needs through a unique skill set that they possess. Hypothetically, let’s say that you’re implementing a new computer program in your business. A temporary employee who is well-versed in that program can help train your employees, setting them up for long-term success.
- Temporary employment provides networking opportunities. First of all, you can establish a professional relationship with a temporary hiring agency that can funnel employees to you. Additionally, the temporary employees you bring in may prove to be valuable contacts that later turn into permanent employees.
- In some cases, temporary employees can reduce hiring costs.
- Background checks, drug tests and other pre-employment screenings can be costly. If you allow a temporary employment agency to vet your temporary employees for you, it can save you money.
- Speaking of vetting employees, temporary employment agencies usually do background checks. These checks can help you avoid making bad hires.
Cons of Temporary Hires
- Training temporary employees can be time-consuming and costly. This is especially problematic if their employment will be for an especially short-term.
- Temporary employees often require a higher salary or hourly pay rate. These employees know that you’re hiring them because you’re in a position of need. They also know they won’t receive extra benefits and therefore can require higher pay.
- Temporary employees often work for multiple companies at the same time. This means that your company may not have its full attention and energy.
- Temporary employees may leave for higher-paying or permanent positions with little-to-no notice.
Pros of Permanent Employees
- Permanent employees are often more motivated than temporary employees. When people know they have the potential to advance within the company, they may work harder.
- Permanent employees may perform better due to being under less stress. When people know they have a stable work situation, they’re not as worried about the future.
- As an employer, you’re also under less stress with permanent employees. You can forecast for the future since you know who makes up your team.
- Speaking of teams, you can create a culture of stability by hiring permanent employees.
Cons of Permanent Employees
- You may be required to provide benefits to permanent employees if they work full time. Paying for various types of insurance, paid time off, and other benefits can prove costly.
- Depending on your state’s laws, it can be difficult to fire a permanent employee. Moving on from permanent employees can require extensive paperwork and other costs.
- Pre-employment vetting can be very expensive. Background checks, drug tests and other pre-employment steps not only require money but they’re also time-consuming.
- Employees may get bored performing the same tasks every day for years at a time. This can lead to diminished work quality.
While permanent employees are still more common among most business owners, there is certainly something to be said for temporary employment. Every company’s staffing needs are different, and each employer’s goals may vary.
Make Hiring Decisions Easy With DataCheck
Regardless of the hiring strategy that you choose, we have the solutions that you’re looking for. DataCheck has helped countless employers with pre-hiring screening and background checks they need to keep their business operating. With advanced background screening, you can rest assured that you’ll find the right candidate for your job openings.