Do you find it more expensive to use temporary workers?
The Flex sector is experiencing strong growth. This growth can be seen not only in small employment agencies, but also by the big players in the industry. Temporary employment agencies are intermediaries that mediate between job seekers and companies that need people to carry out certain tasks. However, for project-based service providers, it’s not always clear whether it’s viable to hire temporary employees.
Temporary employment agencies were created to cater to companies with fluctuating productivity needs. That’s why companies that work on a project basis find hiring temporary employment agencies so attractive.
Example: a construction company
As an example, let’s look at a construction company working on short term projects that consist mainly of renovation and reconstruction projects. Let’s suppose that a project manager from this construction company needs five extra employees in the short term to work on new projects. The company decides to recruit permanent employees.
Unfortunately, hiring new staff takes longer than expected, which causes delays to the project. Furthermore, after the project has been completed, they will have a few employees on their hands for whom they have no further projects available as yet. This leads to higher costs and reduces the company’s profits. In these kinds of situations, there are three reasons why project-based service providers would be better off using a temporary employment agency.
The main advantage of hiring temporary workers is that the company is free to decide when it needs to use temporary staff. In a project-based working environment, temporary employees can be deployed for the duration and size of a project. A temporary agency worker can be used for as long as there is work to be done.
When the work comes to an end, it won’t be a problem. The temporary employment contract stipulates that the employee’s services may be terminated as soon as the agreed work has been completed. This method allows the company to pay only for the hours worked and avoids unnecessary high costs which have to be borne by the project.
2. Time savings
When a temporary employment agency is hired, the application process (recruitment and selection) is in the hands of the agency. The temporary employment agency will advertise all the vacancies and also handle all the job applications as well as the interviews. With a large database at their disposal, there is a good likelihood that the employment agency will soon find a suitable candidate. This means that the agency will also check the references of the applicants.
In addition to mediating between job seekers and companies, temporary employment agencies are also able to offer applicants apprenticeships or training. That’s something else the company does not have to worry about, which means that the temporary employee can start working on the project at the right level.
3. Fewer risks for the employer
In addition to flexible employment and time savings, the company won’t be responsible for the administrative obligations of a temporary worker. However, it will be necessary for the project manager to ensure that the temporary agency employee submits the correct number of hours worked to the employment agency.
If a company hires a temporary employee, it also has no employer risks. For example, if the temporary employee becomes ill, the responsibility lies with the agency and not the company.
Are temporary workers only suitable for large companies? Certainly not. It used to be the case that as a company recruited more staff, more flexibility was required. Nowadays, in both large and small companies, the costs and revenues are often calculated per project and you can therefore factor in the costs of hiring temporary workers in your pricing.
Project managers often compare the hourly rate of temporary employees with the hourly rate of permanent employees. In this comparison, it seems that temporary workers are indeed more expensive. But when a temporary employment agency is hired, it means less responsibilities for the project manager, such as not having to oversee the job application process. There’s also more flexibility when it comes to terminating the services of temporary employees. In that way, you save on costs.
Nadine van der Vegt
Nadine van der Vegt is a junior online marketer at YoungCapital. YoungCapital believes in the power of the young generation and encourages companies and organisations to utilize that power.