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Temporary workers: a good or bad idea?

According to the American Staffing Association, there are approximately 3 million temporary and contract employees working for U.S. staffing companies during an average work week. That means there's a wide range of skilled people usually available for work whenever most businesses need them. Even so, should your company hire temporary workers? Consider the following:

Advantages:

Reduced short-term costs. Typically, temp agencies cover many of the costs traditionally handled by employers. These may include payroll processing, administrative expenses and fringe benefits. Even factoring in higher hourly rates to cover agency fees, hiring a temporary employee may be less expensive than paying wages and benefits to a full-time worker.

Ability to evaluate potential employees before hiring. With a temporary worker, you can "test drive" before you buy. An agency staffer generally comes with few strings attached, so you're afforded the opportunity to assess a person's skills, personality and fit with your company before committing to a long-term relationship.

Disadvantages:

  • Training time. No matter how skilled or experienced the temporary worker, he or she must get up to speed on your way of doing business. Factory workers may need to familiarize themselves with a unique piece of equipment. Office staff may require handholding to grasp the quirks of your proprietary software. When permanent employees are tasked with training the worker, short-term efficiency may suffer.
  • Diminished morale. Hiring temporary workers may lead to friction with your existing staff. Permanent workers may fret about being replaced. Long-established teams may cease to function efficiently because trust hasn't been established with recently added workers.

If you decide to use a temp agency, find out how long they've been in business, their policies for screening staff and their responsibilities as an employer. Ask them to make a detailed presentation to your management team and be sure to review any contracts with your attorney.

Let us know if you have questions about how temporary workers will affect your business's taxes.