The new year is a time when many organisations conduct their annual reviews, assessing the challenges that they faced in the year before and applying their lessons for the year ahead. Businesses will often use this time as a reason to implement significant changes and projects, more often than not, recruiting new staff to help with the growth of the business. Companies will often look towards temporary staff to help boost the resources, address short-term needs and develop the business quickly in today’s competitive marketplace. Whilst the idea of temporary staff may seem like a good idea to help evolve the organisation, the investment may not always be beneficial to the business, resulting in huge internal costs in the long-run.

Above the standard elements of expenditure to invest in new staff – base pay, pensions, holiday and workplace costs – temporary staffing come with additional costs that decision-makers may not be aware of.

The Hiring Process

The time it takes to source, review, interview and hire a member of staff can put huge constraints on the productivity of senior staff, along with the continual performance management they will need to conduct on each new employee. It is important that you weigh this time against the benefits that the temporary staff will bring and whether better value would be derived from investing cost and time in full-time staff or promoting in-house.

Additionally, the agencies used to source temporary staff can range in the costs associated with them. Temporary workers will come at a fee made up of a basic salary with a percentage on top for the agency commission fees. These fees will vary from agency to agency and will be dependent on the job role and industry in question. Should you want to make the worker a permanent member of the team, you will be legally entitled to pay a temporary to permanent fee to cover the loss of the worker’s value. Again, this will vary depending on circumstances but should be considered in your decision.

Time and Cost on Internal Resources

Despite their previous training experience, a temporary worker will have to undergo training for each assignment in line with the needs, requirements and expectations of the organisation, which will inevitably utilise the time of one or more of your full-time staff members.

Certain roles and their requirements can be dangerous and, therefore, staff will need adequate safety training to complete their assigned tasks. Studies indicate that workplace injuries are typically higher amongst temporary workers due to training problems.

Value to the Business

Soft costs to the business can also be derived from lower productivity and poor quality or results from temporary workers (in comparison to full-time staff) who are not adequately trained or invested in the company’s goals.

Considering the Total Cost of Ownership (TCO) of any new hire, it is imperative that businesses consider whether restructuring business operations, utilisation of automation software or offering training schemes to develop the current staff could provide them with the skill sets and resources they need within the organisation, without relying on hiring new staff. If hiring is the only option, it is important that companies consider the internal costs and value added from full-time and temporary workers and select the most advantageous choice for their business.

Consultancy services that look at current staffing and how to reduce payroll costs, as well as ensuring the efficiency of business operations, are helpful for businesses who are unsure about managing the costs of their staff. Our expert team, who draw on years of expertise, can help to identify and implement the solutions which support staff recruitment, development and performance, so your business runs efficiently. Get in touch with us today.

Article by: Steve Stiles