By Alexandra Zatarain

 

In present times everyone is being pressured to do more with less. This applies also for companies, where HR departments are struggling to cut the operating expenses of their greatest assets: their staff.

Thousands of highly skilled individuals who are currently unemployed, have turned to temporary staffing agencies as a means to “bridge the gap” to their next professional position. In today’s economic and employment conditions, employers will find talented and skilled individuals who can fill their open positions under a temporary contract.

Now temporary staffing firms are being used by organizations in all industries across the country to recruit everyone from envelope stuffers to executive directors.

Companies are now enabling a Just-In-Time approach in the human capital supply chain. A Just-In-Time approach to staffing can help reduce overhead and manage payroll costs. This will mean that “the right talent is located and delivered to the worksite at the right time and for the right cost.” (Giehll and Moss, 2009)

The benefits to companies come in many ways, primarily in savings and opportunities to acquire better full time long term talent, since a temporary worker can then be hired for a full time position if his performance is satisfactory.

 

Lower costs

Costs are at the center of the argument between using or not temporary staff. Using professional level staff to fill the organization’s project and short-term needs will eliminate the additional burden and costs associated with carrying the individual on the payroll year-round and providing benefits. “Temporary staff can provide the help when it is needed”.

Because temporary employees work for the staffing company, the practice is not responsible for paying their benefits or handling their unemployment claims. For example, the rate for outside staff includes legally required expenses such as social security taxes and discretionary costs such as medical benefits, holiday and vacation pay.

From the start the company will save on social security, workman’s compensation insurance, 401k benefits, the cost of employer provided benefits such as health insurance, paid vacation and sick time, and more. “According to Forbes, these savings can save your payroll costs by 20% to 30% or more”.

Temporary staffing at the senior staff level or even in the executive director’s chair is usually not contemplated by HR departments. But companies must realize that “filling open positions, especially those at the senior staff level, during a lengthy search process can also save an organization money in the long run”. This is because it sends a clear message of stability to all stakeholders during times of tumult and uncertainty.

 

Reduced risks

Offering a temp-to-hire option provides the opportunity to try out candidates before making the commitment of adding them to the team.

According to Ken Smith, VP of Peak Performers, making use of temporary staff during busy times will relieve the stress and prevent burnout for regular staff, “which can reduce absenteeism and worker’s compensation claims in the long run”.

 

Added flexibility

Adding extra staff under a Just-In-Time model will help avoid being overstaffed during slow times and understaffed in busy times. This way staff levels can stay productive year round.

 

Time well spent

If the employer decides to use a staffing company to hire temporary workers, the employer will save time and money on advertising, screening, interviewing and reference checking, since all these activities will be carried out by the staffing firm. Because workers will be pre-screened by the staffing company, the employer will also save in training.

One of the biggest benefits is the possibility to outsource payroll services to the staffing firm, through which the employer will save by transferring the staff’s payroll processing and benefits administration to. There will be no need for the employer to process payroll or generate year-end tax documents for the temporary worker.

 

To hire or not to hire?

Several factors may influence the decision and appropriateness of working or not with temporary staff. These factors include:

• The length of a project: is it long or short term? For a short term project a contract employee will almost always be a better choice than a full time worker.
• The urgency to fill the position: a contract employee can usually be found and hire more quickly than a permanent one.
• For projects put on hold or going under continuous changes, a temporary employee might be a better choice.

 

Finding Temporary Staff

Lisa Brown of Nonprofit HR Solutions and Laura Gassner from Nonprofit Professionals Advisory Group, recommends several alternatives to employers looking for temporary staff.

1. Use websites catered to independent contractors, soloists or consultants. These sites have a wide range of potential employees at any company’s reach.
2. Post the position online and in print. Candidates who are searching for jobs are more likely to be available to start a short or long term temporary assignment immediately. Many of the applicants from job boards will probably be looking for a temp-to-hire position or may leave once a full-time position is offered to them elsewhere.
3. A more tailored option is to turn to a temporary staffing company. When considering the use of this service, companies should inquire about their previous work in the industry, quality of the talent pool, services offered, and any other requirements that the employer might be looking to fill.

The benefits of working with temporary contractors are many, but it may also bring liabilities if the process is not carried out diligently. It is essential for companies working with temporary staff members to comply with all the legal requirements and maintain the process in accordance to state and federal jurisdiction.

 

Giehll, T., & Moss, S. 2009. Human Capital Supply Chains. Mill City Press. Minneapolis, United States