Temporary work became popular shortly after World War II with clerical type positions. Today, the industry connects approximately 2.3 million workers from almost all specialties. Whatever your needs, there is probably a temp agency or contractor that can fill your hiring requirement.

Temporary work agreements allow managers to make real time labor force decisions. The flexibility enables almost immediate hiring and firing. The administrative filing and paperwork is usually outsourced to the agency which allows the employer to focus on core business functions.

Temporary workers typically make business sense for one of two reasons: 1) you could potentially eliminate the position within 6 months to a year, or 2) you want to use a temp-to-hire strategy to see if a new hire is going to be the right fit.

Both temps and contract workers could meet your business need, however the difference between the two is that temps are W2 and contractors are 1099. If you go through a temp agency, the agency will handle the withholdings. If you construct the temporary agreement yourself, you will be responsible for the withholding. All 1099 contractors are responsible for their own withholdings.

This list from bankrate.com shows a few industry leaders across a diverse set of industries.

Accountemps – Financial and Accounting

Aerotek - Engineering

CLP Resources - Skilled labor, Construction

Kelly Services – Professional, Technical, Administrative

Labor Ready – Day labor

Manpower – Professional, Technical, Administrative

MarketSource – Sales and Marketing

MSX International - Automotive

On Assignment - Healthcare

ProLogistix – Logistics and Warehousing

TEKsystems – Information technology

TransForce – Logistics

How it works

If you have established the need to hire temp workers, you might first want to select an agency that can provide the specialization you seek. As with any buying decision, you should speak with multiple vendors. Have each vendor make a presentation to you.

For their services, temp agencies will usually surcharge 15 to 30% above market compensation. If you are planning an extensive temp program then establishing a relationship with an agency might be the most cost effective. The agency will pre-screen talent, handle their employment filings, and assume certain liabilities, as the employee is not yours, they are the employee of the temp agency.

If you are only planning to hire one or a few temps then administering the process yourself could be more cost effective. First, be sure to have a proper Temporary Employment Agreement. This document protects you from a number of issues, one of which is being named in a unemployment claim once the temporary assignment is complete. The main benefit of negotiating the temporary engagement yourself is that you save the agency’s surcharge, however be sure to consider the cost/benefit.

Pros

Flexibility – make real time personnel decisions in response to the ever-changing business environment.

Evaluation – determine if a new hire is the right fit without having to consider the cost of hiring and firing.

Cost – eliminate overtime with strategic staffing and reduce employee benefits paid.

Cons

Training – as with any new hire, temps will face a learning curve that will require a certain amount of time and resources.

Safety – being unfamiliar with the environment could possibly lead to a higher rate of accidents than for permanent employees.

Legal – temps are guaranteed many of the same rights as permanent employees. Failure to comply could lead to suit.

Issues temps face

As a manager it is always important to be aware of the challenges your workers face. The Freelancers Union reports that 40% of independent workers report 1) having problems affording health and insurance, and 2) difficulty in collecting owed wages.

If you are planning to hire temps or contract workers, be mindful of their challenges. It could help acquire and retain top talent.

References:

Ruth Mantell, U.S. Employers Shift to Temp Workers

The Pros and Cons of Hiring a Temp by Patricia Schaefer

Part Time, Temporary, and Seasonal Employees