Written By Josh Tolan for Fast Company
Permanent is always better than temporary, right? Not always, and the rising trend of the temporary workforce shows these fleeting employees might be a solution for your common recruitment woes.
CareerBuilder found that 42% of companies were planning to ramp up temporary hiring, with 43% hoping to transition temp talent to full-time superstars. Temp labor is being used by both growing companies and more established businesses to jump over the skills gap, navigate a crowded marketplace, and beat out the competition.
This is probably why numbers from Staffing Industry Analysts predict the temporary labor market will grow an additional 7% in 2015.
But are temporary workers the solution to your recruitment woes or just a passing fad? First, let’s take a look at what sectors are utilizing temp labor
Who are Temporary Workers?
According to the Department of Labor, a temporary employee is one who will be with the company for less than a year, and one who has a specific expiration date. These workers are making up more and more of the American workforce, as the skills gap and a tough job marketplace convinces both job seekers and employers to take temporary labor for a spin.
The most surprising fact might be just how widely used temporary labor is across industries and fields, from medical to creative services and human resources. There’s a misconception that temporary employees are only used in certain sectors of the job market, such as freelance contractor positions and low-skilled jobs.
This obviously couldn’t be further from the truth, especially as growing companies have less time to dedicate to hiring, and at the same time it’s become more difficult to find candidates with the right skills. Many employers are turning to staffing companies, not as a last ditch effort anymore, but as a solution to an overtaxed internal recruitment apparatus unable to find the right people.
A study from CareerBuilder and EMSI found temporary labor is utilized for everything from human resource professionals, customer service representatives, and construction laborers to administrative assistants, bookkeepers, and registered nurses. Almost every occupation or industry uses temporary labor in some form, but is this a cost-efficient plan?
Think about the typical costs of recruitment. You have to pay to post job ads, pay for employer branding material like brochures and materials, pay to attend job fairs, and sometimes even to fly in talented candidates. Those are just the costs on the surface. The hidden costs can be much more prohibitive.
You have to pay in time spent skimming through, on average, at least 250 resumes for a single position. You have to pay for onboarding an employee, and hope this money for training and education will pay off. If it doesn’t, a bad hire can set your company back $50,000 or more, to say nothing of lost productivity and a renewed gap in your workforce.
Temporary talent can be a great way to deal with a short-term problem while nurturing a long-term solution. The cost of temporary labor isn’t free, but it can often lead to more confident hiring, since the candidate went through a “try before you buy” period to ensure fit and skills.
Going through a staffing firm, you’ll need to pay a markup for the firm, as well as time for invoice processing and timecard approval. These candidates, however, can answer your short-term work needs, while also opening up the door for more long-term potential. You can see how their skills really shake out in a real-world setting, and evaluate how well they fit in.
Taking on temporary talent can provide an opportunity to give someone a chance. You might not have been blown away by a candidate’s credentials and experience, but when you connected in person or through a video interview, you were impressed with just how passionate they were about the opportunity.
Passion is a must for all companies, and it’s often the lifeblood of growing businesses. Hiring passionate people with room to grow might actually be a better idea than hiring someone with the perfect skills who is only lukewarm about your company. Setting a trial period for a temporary hire will allow you to see if this candidate’s passion translates into value for the company and an ability to learn new skills and grow into a great employee.
Before you jump feet first into the temporary labor pool, there are some important legal considerations to weigh. Just like any other employee, temporary talent is covered by all forms of labor laws, including harassment, discrimination, and workplace health and safety guidelines.
You also have to determine whether you want to hire a temporary employee or a contractor. It might sound like the same thing, but they are actually very different.
Contractors are usually skilled free agents helping your company on a case-by-case or freelance basis. Since they’re not an employee, you’re not responsible for providing benefits or even pay unemployment taxes. However, you must report compensation of $600 or more to the IRS for tax purposes.
If you hire a temporary employee, whether someone for a longer-term project or a seasonal hire, this person will be treated much like any other employee. This means they must be provided certain benefits, although which benefits often vary by state. Some of the most common are unemployment benefits, social security, and workers’ compensation.
Deciding whether you need a simple contractor or a temporary employee will determine what benefits you legally need to extend to this talent, so it’s important to be informed and do your homework before hiring.
The temporary hiring revolution might actually be just the thing to take your company to the next level and help you nab the talent you need. Hopefully, you can transition temporary talent into full-time superstars, but if not, your company might have just dodged a costly hiring mistake.
What do you think? Does your company use temporary employees? Why or why not? Share in the comments!