What is temporary staffing?
Temporary staffing is where an employer hires staff for work that has a specific beginning and end date. Employment with a predetermined end date may be based on seasonal needs or the completion of a project. Temporary workers are also known as ‘temps’ or seasonal employees. Temporary staffing can be utilized by big and small businesses alike in almost any industry. Businesses are hiring high-skilled workers such as engineers, doctors and marketing managers on a temporary basis. Small businesses can utilize temporary staffing for various positions ranging from customer-facing to back office functions.
The popularity of temporary staffing as a legitimate way to supplement the workforce is evident. The American Staffing Association reports that “three million temporary and contract employees work for America’s staffing companies during an average week.” According to Intuit’s Future of Small Business Report, the temporary staffing trend is set to continue. The research found that, by 2020, 40% of the workforce will be temporary workers.
Industries that already utilize temporary staffing
The online employment website, CareerBuilder, stated in a 2018 press release that 51% of employers surveyed planned to hire temporary employees. Due to factors like seasonal and economic changes, using temporary staffing can be less risky than hiring permanent employees. The following industries hire the most temporary staff:
- Retail – 82%
- Financial services – 80%
- Healthcare – 81%
- Professional services – 81%
- Public service agencies – 86%
If you’ve decided that your small business wants to utilize temporary staffing, you have several options to pursue, including:
Employing workers directly – Should you pursue this option, you’ll need to create a job description and do the advertising and interviewing yourself. You’ll be responsible for these temporary employees’ unemployment benefits, social security, and workers compensation since they’ll be part of your staff. The Small Business Administration (SBA) gives an overview of your responsibilities and obligations to temporary staff when hiring directly.
Using a staffing agency – If you want an easier but costly route for temporarily staffing your small business, consider using a staffing agency. Choose the staffing agency that is able to supply the most suitable employees after you provide them with your criteria. The staffing agency will supply the temporary employees and take care of the administrative side of recruitment, like checking references and drug screenings. The downside to using a staffing agency is that it costs you more per hour per employee. However, as a small business owner, you should budget for the additional expenditure if you view the extra cost as a reasonable trade-off due to the lower risk of using a staffing agency.
Hiring an independent contractor – Where you’re in need of someone with an expert skill set, like marketing or finance, an independent contractor may be a good choice. Independent contractors generally work on a per-project basis although they can also be paid by the hour. You can find independent contractors via professional sites, like LinkedIn, or ask your network to recommend someone they have used previously. The independent contractor is normally self-employed so you won’t be liable to pay their taxes or provide them with benefits. As there’s less of an obligation in relation to benefits when using independent contractors, some small businesses have misclassified workers to avoid their responsibilities. Falsely categorizing your workers as independent contractors can lead to your business being fined by the IRS.
How your small business should utilize temporary staffing
Small businesses owners can utilize temporary staffing in a number of ways to ensure that they are never under-staffed. Here are seven ways that small businesses can make use of temporary staff:
- Manage seasonal fluctuations
- Cover permanent staff
- Decide if the temporary staff is a good fit
- Save costs
- Boost staff morale
- Grow your network
- Focus on business growth
1. Manage seasonal fluctuations
The holiday season is normally the busiest time for most small businesses. Getting your business ready to maximize the sales opportunities means more than just having enough inventory. You also need to ensure that your staffing levels are adequate to deal with the increase in customers. Since the holiday sales spending cycle lasts no more than a few weeks at a time, hiring temporary staffing is a good way to prepare your business.
The amount of time that you hire your temporary staff for seasonal fluctuations will depend on how much training they will need to receive. If you plan to hire temporary staff directly, you’ll need to allow for extra time to show them the ropes. However, if you use a staffing agency, they provide workers who are experienced in your line of business and, therefore, would only require a shorter amount of training.
As well as holiday sales, small businesses, especially in the retail and hospitality sectors, have particular peak months, for example, the summertime. You can hire temporary staff for these months to keep your business fully covered. Alternatively, if your business has been awarded a new contract and you’ll find it difficult to deliver without help, then it’s a good idea to utilize temporary staffing. Utilizing temporary staffing in your small business helps to keep your customers satisfied while helping you to control your cash flow.
2. Cover permanent staff
Permanent staff will always require time off from work. Your employees will need to be away from work for vacations, medical leave or maternity/paternity leave. Small businesses can use temporary staffing as a stand-in to cover their permanent employees’ absence.
Hiring temporary staff with the right skills will help to keep your business running efficiently until your permanent staff returns. You may still need to take on temporary employees, even if all of your permanent employees are present. If your regular staff have no more capacity to deal with extra work, a temporary worker can lighten the load. If the increase in work is due to business growth, you can use temporary staffing to enable you to spend the necessary time to hire the best permanent candidate.
3. Decide if the temporary staff is a good fit
Bad hires can have a negative impact on your small business. Employing the wrong person can lead to decreased productivity, a dip in staff morale and harmful financial implications. The decision to make a permanent addition to your team should be done very carefully with the maximum level of due diligence. Temporary staffing could be used as a type of ‘try before you buy’ service in relation to growing your team. Hiring staff on a temporary basis will provide you with first-hand information about the employee’s commitment and overall suitability for the job. Even the extra financial outlay of using a staffing company to find your temporary staff will be less than the investment you’ll make in both resources and time compared to making a permanent hire.
If you use a temporary worker through a staffing agency, you can relieve the worker at the end of their contract or terminate early if they’re not suitable for the role. The temporary worker can be replaced by someone with the right skills and attitude is found. Where your temporary worker is a good fit for your business and they have agreed to pursue permanent employment with your small business, you should liaise with the staffing agency (if you’ve used one) to make the necessary arrangements for the transition.
Temporary staffing can be an effective hiring platform with 35% of respondents from an American Staffing Association survey saying they were offered a permanent job. Carrie Wood, the co-founder of the small business, Lease Ref, explains on the American Express blog that hiring temporary staff is a “litmus test” to find out whether the person should be offered permanent employment. She finds that this is an effective way of determining whether people are really committed to her business or whether they’re simply “looking for a paycheck.”
4. Save costs
Small businesses utilize temporary staffing to not only save on the costs of permanent hires but also to save on carrying out parts of the HR functions. Some small businesses don’t have a separate HR function, so outsourcing the recruitment of temporary employees’ results in a saving from having a full-time HR manager on the team. Hiring temporary staff can be time-consuming and should be done by experts to avoid legal and regulatory pitfalls. Using a temporary staffing company or an independent HR contractor can provide you with the services you need at a lower cost than a permanent HR professional.
Small businesses make an additional cost saving when utilizing temporary staffing if a staffing company is used. The overheads associated with employing staff are decreased as the temporary worker is classed as the staffing company’s employee. Therefore, the staffing company is responsible for the temporary employees’ unemployment and workers’ compensation claims.
5. Boost staff morale
Overworked permanent staff can become disgruntled and are likely to look for opportunities elsewhere. Working too many hours can even pose a health and safety risk to your workers if they operate heavy machinery. Resentment will build up where permanent employees are under constant pressure because they’re managing the workload of more than one person. Show your loyal employees that you care about them by easing their unreasonable work burdens.
Temporary staffing can be used to give your permanent employees the breathing space they need to do their job properly. Based on your small business trends and projections, you’ll know whether this extra work is fleeting or likely to be the new way your business operates. Either way, using temporary staffing to help your permanent employees – while you plan how to go forward – is a good move. If your permanent employees continue to be overworked, they could leave your small business, which will create more problems for you to deal with. The most suitable temporary staff will increase your permanent employees’ productivity and morale.
Another way that small business can use temporary staffing is to maintain the team’s cohesiveness. Resentment can build up between team members if employees have to do the work of their colleagues when they’re absent for a significant amount of time. Although taking medical and maternity/paternity leave is an employee’s right, the workers who remain may feel forced to increase their workload. As a result, the absent employee may experience hostility on their return to work because they’re regarded as the source of additional stress due to the extra workload. You can avoid this type of bad feeling creeping into your team by utilizing temporary staffing to allow your permanent staff to concentrate on their allocated roles.
6. Grow your network
Networking is an important part of growing small businesses. Utilizing temporary staffing is an effective way to develop your business network. Firstly, temporary hires who have had a positive time working with your business will share their experiences with their network. This type of networking is particularly useful if you’re hiring temporary workers directly. Being in possession of a list of people that you can call on when you need extra help takes the pressure off finding the right temporary employees. Additionally, if a trusted temporary staff member is unable to work, they can recommend someone that would be a good fit to replace them.
Utilizing temporary staffing to grow your small business network becomes very important when using independent contractors. When interviewing front of house workers, it’s easier to decide whether they have the aptitude for the job based on the answers to the interview questions. However, hiring the right independent contractors can be trickier because they’re experts in their field so you may not be sure about the validity of their answers. Asking independent contractors that you’ve worked with for recommendations is a useful networking technique. Independent contractors are careful about safeguarding their reputation, so there’s a higher chance that they’ll only send people your way who they can personally vouch for. A growing small business will need specialists’ skills at one point or another. For example, you may decide that your social media or your branding needs a revamp. View temporary staffing as a way to collect details of experts that you’re likely to need in the future.
7. Focus on business growth
Using temporary staffing, especially when a staffing company is used, frees up small business owners to concentrate on growing their business. Hiring temporary staff through a company will mean that issues like payroll, benefits, and taxes are taken care of. The legal and administrative aspects of hiring temporary employees are also handled. Requirements under legislation, like the Affordable Care Act, can make it difficult for small businesses to remain compliant. A staffing agency handles the regulatory and legal requirements for hiring temporary staff. This means that one of the few things you’re responsible for is making sure the temporary employees are where they need to be at the right time.
Using scheduling software to manage your temporary workforce also frees up your time so you can focus on developing your small business.
How Deputy can help
Small business owners can utilize temporary staffing to run an efficient business. Temporary staff could be used to fill in gaps or as a way to assess whether they would make an appropriate addition to your team on a permanent basis. Deputy can help to eliminate errors, miscommunication, and paper, manage absences and holidays, by saving time and money for both you and your employees. The accessibility of our mobile app was designed with staffing agencies and temporary employees in mind. Curious to see how much money you can save with Deputy? Download our free ROI Calculator and see savings on things like overtime, scheduling, payroll and timesheet processing, and more:
Whether you run a large staffing agency, a local restaurant, or a franchise retail store our streamlined timesheet approvals, simplified payroll process, and quick shift options will allow you to reduce administrative overhead costs. Give Deputy a try by booking a demo for a free 30-day trial and see why business across the globe use Deputy as their all-in-one employee management solution.