With labour often being the biggest line item on the organization’s P&L, minimizing human capital expenses is being achieved by supplementing staff with trained temporary personnel to sustain production and/or service demands.
Almost any position can now be filled on an interim basis – from ditch digger to CEO. Today, even scientists work on a temporary basis, and that new availability is tremendous for companies that need to be flexible during product development or swings in the marketplace. The reason for hiring temporary staff has changed over time, from short-term cover to an integral part of the workforce.
When a permanent placement does not work out, there are usually wasted recruiting dollars, along with impaired productivity and performance from the employee, and perhaps lowered morale for a whole department. Because of these possible effects, some companies like to “try out” workers before they make an offer for permanent employment. In this sort of situation, workforce solutions prevail.
For countless organizations, there are many benefits to using temporary staffing. The most obvious is that you can reduce overall payroll expenses by adding staff only when needed. Companies such as hotels, restaurants and entertainment venues are obvious examples, but that is just the tip of the iceberg. Today there are temps in accounting, HR, marketing, logistics, administration and the list goes on – companies in almost every sector can use temps to their advantage.
Of course, to make optimal use of the contingent workers, it is necessary to plan. A decision maker at a relatively senior level needs to forecast when the extra help will be needed, how many people will be needed and what level of worker is needed.
Part of this equation involves deciding how much of the extra work regular staff can absorb and how much work a temp can handle.
There is also the issue of training. In an ideal situation, it is good to be able to identify clerical or routine tasks that temps can do with little training.
Although there are so many more temps in companies today, some HR specialists suggest that many managers do not use this versatile workforce as effectively as they could. Some important tips for getting value from using temporary staff in your business include:
Convert Fixed Cost to Variable
Analyze your workload and determine which processes can be handled by temporary staff. Reduce core staff to levels necessary to maintain normal operations. To continue meeting production/service levels use temporary staff to process work over several days versus hiring temporary personnel impromptu.
Using temporary employees in place of overtime can reduce labour costs by 20% or more.
Reduce Training Costs
Cut training costs and improve quality and productivity by employing skilled temporary employees. Save time and money on qualifying whether or not the temporary employee can perform the task.
Focus on core activity
Being understaffed will lower the probability of a department meeting its productivity targets, which could have a cascading impact on other inter-related departments. Shift the administrative burden when you use temporary staff instead of direct hires – all costs associated with processing and administering payroll and benefits are transferred from your company to the staffing firm.
Avoid costs associated with burnout
Many companies may take the concept of ‘lean thinking’ too far. Pushing full-time staff to produce more with few resources increases stress which leads to problems with quality, productivity, absenteeism and turnover. Take the pressure off by using temporary employees.
The additional personnel will help your staff avoid burnout, reduce the cost of defects, avoid productivity losses and limit turnover expense.
Get maximum productivity from your current staff
Free-up your experienced staff by using temps for time-consuming jobs. Don’t slow the productivity of your top-performing staff with tasks that could be dealt with by an additional temporary staff member.
Too often the temp is only seen as taking care of less important jobs. In fact, temps can be utilized for specialist skills on short-term projects, even managing project teams. Often these people can bring skills that are lacking in your current team. They can be used for a fixed period, and then let go at the end of the project.
Temps can be the ideal answer for administrative and technical assistance. Numerous temps can provide cost-effective assistance with technical procedures and systems implementation, setting up a database, designing administrative procedures or with project planning.