Should you bring in temporary employees? Or only pursue people for long-term positions. In many cases, the answer is a little bit of both. Read on to find out what the experts say about striking the proper balance between temp and regular employees.
Matt Ross
Matt is the co-owner and COO of RIZKNOWS and The Slumber Yard, which operate multiple internet properties, including popular websites, YouTube channels and a mobile application.
It seems like contract manufacturers use temp workers more than other industries. For example, in the supplement industry, I’ve had the pleasure of visiting several contract manufacturing facilities (think protein powders, pills, etc) who use a stable of temp workers to meet production needs. I believe it’s so prevalent in this industry because manufacturers are so reliant on large customers. In other words, there are a ton of ups and down in the production cycle. One week, the contract manufacturer might be producing 100K pounds of protein powder for a large customer and the next week, there’s no work. As such, it makes more sense to use temp workers rather than salaried production workers.
Rick Struzynski
There are significant advantages to outsourcing (NOT offshoring) functions that are:
- not essential competencies
- difficult to fill due to budget constraints (especially for smaller companies).
It really makes sense to focus on what you do best and let others manage the other functions more professionally that you could.
Some examples:
- Outsourcing your inside sales department – doesn’t really matter where they sit and can bring a unique perspective as well as a very seasoned team with excellent management. Also allows for easy budget allocations.
- Finance/Accounting – this is probably the most common (along with legal) – some going as far as outsourcing their top-level finance manager (Outsourced VP of Finance).
- Outside sales management – this is primarily for smaller-sized businesses that either do not have the financial resources for a full-time professional manager, or perhaps even the need. Outsourcing to a professional is far better than the business leader doing it themselves.
In all cases you can expect to receive:
- Efficiencies and professionalism, you would likely not see if you were performing the function yourself.
- Change in cost structure – moving from fixed to variable costs (a big deal for smaller companies).
- The ability and time to find a long-term permanent solution if or when the business case is there.
Every industry has job roles that would be better suited to temporary positions. A good test would be to ask two questions:
- Is the job needed intermittently? Perhaps it’s seasonal, or only done at a certain stage of the business process.
- Is the work commoditized? Meaning, are we clear about what needs to be done, and we know that it’s something that many people can do?
In the oil and gas industry there are jobs that should never be temp jobs. For example, managers and experienced engineers that are needed all year need to be preserved for continuity and synergy within the organization. Some work, such as when the oil well is drilled (planned) on paper (DWOPs), is only done once for each well. Experts that get brought in to solve a local problem might only be needed for a few weeks.
In most every industry, jobs that are intermittent and/or commoditized are best filled with either temporary, or outsourced staff.
Any industry which experiences seasonal variations in demand, such as swimwear industries in summer and coat manufacturers in winter, should look into hiring temporary staff. You need to have enough staff to cope with the high demand of peak seasons to prevent customers getting frustrated, but hiring a large workforce will be counter-productive, as staff will be stuck twiddling their thumbs for the rest of the year, which is a waste of their time and your budget.
Hiring temporary staff is the answer to this; keep the minimum number of staff needed to get through the quiet periods on a permanent basis and then hire extra staff in peak seasons to cope with the spikes in demand. Then, when peak season is over, their contracts will be up, meaning you can go back to just maintaining your core employee base.
Hiring temporary staff is sometimes seen as exploitive of the high unemployment rates of today’s job market. This is because some companies continually hire temporary staff, who have no choice but to take the job, and refrain from putting them on a permanent contract to avoid having to pay them certain benefits such as pensions. However, staff will have no problem working on a temporary basis if you are clear from the outset that the role is merely temporary to deal with the increased demand of peak season.
Matt Edstrom
Matt Edstrom, CMO of GoodLife Home Loans. We are a mortgage company based in Laguna Hills, CA. Matt is an expert in human resources, business management, and finance. He’s been responsible for starting and managing several brands, including his most recent endeavor, GoodLife Home Loans.
Which industries benefit most from temp staffing?
Industry #1: Information Technology
Information technology is a popular industry for temporary staffing. Temporary staffing in IT often makes more sense than regular positions. This is because many IT positions need to be filled for short-term projects. If a business has a one-off project that they need to hire additional staff for, it doesn’t make sense to hire a full-time position. This is because when the project is completed, the business won’t have enough work to cover the new positions they’ve hired for.
Industry #2: Construction
Construction is an industry where hiring temp staffing often makes more sense than hiring for full-time positions. The number of projects that a construction company has at one time, varies throughout the year. The current economy and the amount of land available to build on, in addition to other facts, can influence how much work a construction company has. Since projects for construction companies change regularly, it makes the most sense to hire workers on an as-needed basis. In addition, different phases of a construction project can require a need for different positions. The same employees who cleared a lot for construction may not be qualified to lay cement or operate heavy machinery. This is another reason that construction industries benefit from temp staffing.
Industry 3#: Office/Clerical Roles
Office or clerical roles are known for hiring temporary staffing over regular positions. This can be because of the minimal amount of training that is required for these types of roles. A business’s needs for office management can vary depending on the phase that a company is in. Hiring office or clerical roles as temporary positions can often be for temp to hire. This means that they are filling the role as a temporary position, but there is a possibility for the role to become long-term. This could be a result of a new business initially only needing 20 hours of work. Yet as the business grows they may need more of a full-time role. This also gives businesses the option to see if a potential hire is a good fit with the company culture before making a permanent decision.