Temp, Temp-to-Hire, & Direct: How to Choose the Right Recruitment Method for Your Business

What are Temporary Employees?

The Department of Labor considers an employee whose term lasts a year or less to be temporary. Temporary jobs are often available for a variety of reasons and allow employers to obtain help they need without having to add new employees to the payroll. There is usually a deadline or a target date associated with temporary work that marks an end to the period of labor agreed upon by the employer and employee.

What are the benefits of using temporary employees?

Temp Employees can become Full Time Members of your Staff

Temporary employees are not full time employees, but they can become one!

Many temps have a fresh outlook at the company they are working for and can bring a ton of value in a short period of time. If management takes notice, they can decide to bring them on full time to continue to boost their company staff and morale.

Saves Your Company Time and Money

Hiring a temporary employee can get you the help your business needs quickly without the cost and effort of recruiting and hiring staff and adding them to your payroll. Temps work on site under your supervision while remaining employees of the staffing agency. That means there are a lot of costs you don't have to deal with including hiring, firing, unemployment, workers' compensation, and benefits.

Offers Staffing Flexibility

Temporary employees help businesses by quickly filling openings caused by seasonal demand or employee absences like vacation, illness, maternity, or disability leave. Employers can stay current and meet demands, while not overstaffing to fill temporary positions.

Provides Time to Builds Skills

Temporary employment not only helps employers, but employees too by allowing workers to explore new career paths and opportunities without a long-term commitment. Temporary work can be an excellent way to build skills and gain experience while making connections in a particular field of interest.

Disadvantages of hiring temporary workers

Training and Safety Concerns

There is always an adjustment period whenever a new employee starts, and training is required no matter their level of experience or skill. Hiring a temp worker might be a good move depending on the amount of training needed to get the employee up to speed and your industry.

For example, if you work in an industry like retail that has a seasonal rush around the holidays, and the same temps return every year, you might not have to spend a lot of time training employees. However, according to the National Center for Biotechnology Information, temp workers have between 24% to 54% higher rate of injury than standard arrangement workers. For those in the construction or manufacturing industries, the risk of costly injuries might not justify the accessibility of hiring temp workers.

Low Morale

Morale problems can occur among your employee base, especially if temporary and permanent employees are working together for an extended period. Temporary workers can start to feel under appreciated if they are performing the same job, putting in the same hours, but do not receive the same compensation or benefits as permanent employees.

Temp Employees are Not Eligible for Benefits

Because temporary employees are not directly hired employees, they are not typically eligible for benefits.

In fact, they are paid directly from the temporary staffing company and are not on payroll at the company they work for.

What is a Temp-to-Hire Employee?

A temp-to-hire employee is usually recruited for about a six-month period or more. During this time, the employee's status stays on the staffing agency's payroll so employers can evaluate the candidate's performance before committing to hiring them full-time or decide to seek a different individual.

Why do companies hire temporary workers?

Temp-to-hire jobs can be made available for a variety of reasons. Many companies need someone in between a temporary worker and a direct hire worker so they opt for temp-to-hire employees.

Life can get in the way easily from:

• Long vacations
• Maternity leave
• Disability leave
• Illnesses
• Current employees finding other jobs

Temp-to-hire employees can help fill this vacuum for a short amount of time until the job is not longer needed or another more qualified direct hire employee fills the spot.

Benefits of Temp-to-Hire Employees

Offers Flexibility and Reduces Risks

Using temp-to-hire placement allows you to ensure that your next hire is a perfect fit before you bring them on-board. If you find that the candidate is not working out, the temporary staffing agencies can help find you someone else who will meet your needs.

The main benefit of using temp-to-hire recruiting is that you have a better chance of making qualitative, smart decisions for the benefit of your organization. Employees define the productivity, performance, and brand identity of your business, and temp-to-hire placement gives companies the ability to make smart hiring decisions for long-term success.

Assess Skills and Performance

If you're hesitant to hire a potential employee because you're not sure how they will perform once hired, this is the perfect situation for a temp-to-hire placement! You have the time to assess their skills and performance on the job, then hire them if they are a great fit.

Temp-to-hire recruitment also provides an advantage for the candidates as well. If the candidate's résumé isn't as impressive at first glance, they can still woo over the recruiter with their performance and skills and bag a position they deserve.

Saves Time and Money

Staffing agencies can help you get in touch with temp-to-hire candidates and cut down on the time and hassle of recruiting yourself and then deciding everything from salary, incentives, benefits and much more. You can then focus on your business rather than spending your time recruiting.

Challenges of Temp-to-Hire

Lack of Teamwork

Sometimes temporary employees do not integrate with your full-time employees. Permanent employees can be hesitant to work with someone who might not be around long or become prickly around those they perceive to be interlopers.There's no easy solution to building a great team, so watch how temp-to-hire employees embrace your company's culture and established teams.

Contract Buyout Fees

If you find that you would like to hire the candidate permanently, you may have to pay a fee to the staffing agency to buyout the contract or wait until the end of the contract period in usually 60 to 90 days. If you wait too long, the employee might feel underappreciated and move on to take another offer.

Temp-to-Hire Employees vs Temp Employees

Temp-to-hire recruitment is great for when you find a potential employee who made a wonderful first impression, but does not have a lot of experience.

Temp-to-hire placement let you see a potential employee's performance without making a commitment and spending time and money headhunting.

Using a temporary employee can be a great idea if you have a short-term need to fill or do not currently have the resources for a new hire.

A temporary worker can be a good solution, especially for seasonal work or if you need to quickly fill an open position.

If you're interested in keeping a temporary employee with your company, you might want to consider a temp-to-hire placement.

What is a Direct Hire Employee?

A direct hire is an employee who is brought on as a full-time employee at a company and is not paid by a staffing agency for a temporary period. Direct hire placement is usually used when businesses have a long-term or high-skilled job opening and plan on keeping the new staff member permanently.

Benefits of Direct Hire Employees

Better Candidate Selection

Often, a business who uses a staffing agency for a direct hire placement can attract top performing candidates. Most top performers are continually employed, and a direct hire position can attract the top talent in your area that a temporary or temp-to-hire position would not.

Stronger Employee Commitment

Direct hire employees often have a better sense of stability and security within the company they are placed. Temporary employees usually do not feel the same sense of loyalty toward the company a direct hire does, as temp workers know their employment period isn't permanent.

Ability to Offer Better Perks

With a direct hire, companies can promote their own perks and benefits packages. If your company has a great retirement package and insurance benefits, there are perks that can be used to attract the type of prospective candidates you are seeking. Temporary or temp-to-hire employees, on the other hand, receive monetary and insurance benefits from the staffing agency.

Challenges with Direct Hire

Less Flexibility in Compensation

From an administrative point of view, direct hires are more expensive to place than temporary or temp-to-hire employees due to their salary and benefits packages. Achieving greater payroll flexibility with direct hires can be more difficult. While direct hires are often highly qualified, employers have to compensate them for their expertise and skills.

More Time-Consuming

The process of hiring an employee directly is slower than a temporary or temp-to-hire placement. It takes time to make a long-term decision and evaluate the pros and cons of hiring an individual who has the potential to be with the company for years. This lengthy process can cause you to miss out on great candidates if you're too slow to make a decision and a competitor hires them first.

What is a Contract to Hire (C2H) Employee?

A Contract to Hire (C2H) means that employee will work for a predefined amount of time, or until a specific job/task is completed. If an employer decides to extend their contract, they may do so, but they are by no means bound to this type of employee.

A Contract to Hire employee can be used to fulfill certain company obligations. Similar to a temp-to-hire employee, C2H's can fill in for any of life's obstacles that get in the way of a regular day at work.

Direct Hire Employees vs Contract Hire Employees

If you are looking to fill a higher position, a direct hire placement is a great way to attract top performing candidates and inspire company loyalty.

While this process can be time-consuming and more expensive, it's the best way to find and retain top talent.

A contract to hire is great If you have a specific job you need to get done and you'd prefer to not take away from your current employee resources.

These employees can be trained rather quickly as they will already have the skills for the job you need done.