Why do Companies Hire Temporary Employees?

What are Temporary Employees?

Temporary employees, also known as temps, are workers hired by firms for a limited period, as opposed to permanent employees, who are regularly employed for a long term. Temps are brought on to manage fluctuating workloads, fill in for absent employees, or provide skills that the company lacks. Common temps are independent contractors, freelancers hired for specific projects, seasonal workers for busy periods, and staffing agency hires. They also do not receive benefits like health insurance, paid time off, or retirement contributions. The lack of job stability and benefits can be disadvantages, but temporary work allows flexibility and variety for the workers. Temporary employees are responsible for their taxes, including self-employment taxes for freelancers. In exchange for giving up job security and benefits, temporary workers gain short-term versatility in their assignments....

Why do Companies Hire Temporary Employees?

1. Employee Leave: Companies often hire temporary employees to fill positions when regular employees take extended leave, such as for family or medical reasons. Bringing on temps allows the company to maintain productivity and progress while keeping the permanent employee’s position reserved for their return....

Benefits of being a Temporary Employee

1. Learning Opportunities: Temporary positions allow you to gain experience in a new industry or company and determine if it’s a good fit before accepting permanent employment. You can learn new skills from colleagues, get exposed to different corporate cultures, and gain insight into the day-to-day workflow. Temping lets you test-drive a career field or company before fully committing. The hands-on experience and networking connections can help clarify your career path and interests....

Traits of Temporary Jobs

1. Defined Contracts: Temporary jobs come with clearly defined employment contracts specifying the duration, pay rate, responsibilities, and other terms. It provides clarity on the short-term nature of the role. Having set start and end dates outlined in a contract distinguishes temporary jobs from at-will permanent roles. It sets expectations for both the parties....

Advantages of Hiring a Temporary Employee

1. Cost-effective: Hiring temporary workers is more affordable than bringing on permanent staff since you only pay for the work duration without added costs like benefits and payroll taxes. This optimizes labor spending. Temporary workers help control personnel costs and provide labor flexibility. There are no costs associated with laying off time or salary commitments after assignments end....

Disadvantages of Hiring a Temporary Employee

1. Extended Ramp-Up Time: It takes time for temporary workers to learn processes and systems. Frequent turnover means repeatedly training new temps, rather than permanent staff only needing to be onboarded once. With temporary workers, you lose time getting them up to speed, and just as they become fully productive, they may leave. The constant churn shall result in productivity lags....

Where to find Temporary Employees?

1. Leverage Staffing Agencies and Employee Referrals: Specialized staffing agencies maintain large pools of pre-screened temporary talent across various functions and industries. They can quickly fill temporary job openings and handle worker classifications. Referrals from current staff yield good temporary candidates since employees tend to refer people they know will perform well. Coworker referrals tend to be more engaged....

How long can you employ a Temporary Employee?

While being a temp offers flexibility, the designation is meant for short-term assignments, not indefinite ones. Employees retained beyond a year or without a clear end date in sight should be reclassified as permanent staff to avoid misrepresentation....

How many Hours can a Temporary Employee Work?

Many firms require at least a 3-6 month break in service after a temp has worked for 12-18 months before being rehired. Additionally, the law states temporary workers who log over 1000 hours (roughly 6 months full-time) at a firm in a year are entitled to participate in retirement benefits. These types of regulations aim to prevent the exploitation of the “temporary” designation and ensure temps are not retained indefinitely without workplace protections. While temporary work arrangements provide flexibility, employers do need to enact reasonable limits, transition temps to permanent roles when appropriate, and provide access to legally mandated benefits. It avoids the liability risks that can come with overusing temporary workers....

Frequently Asked Questions (FAQs)

1. What firms hire temporary employees?...