The Hiring Temporary and Contract Workers Guide
A crucial factor in the success of an organization in achieving its goals is its workforce.
In the organizational structure, it is unavoidable for a hierarchy to be in place, whether it is set by the organization itself, or through informal means, such as those that were established by the employees.
There are the supervisors and the subordinates. The white-collar employees clearly distinguished from those doing the blue-collar jobs. The professionals from the skilled workers. And then there are the permanent employees and workers identified separately from the temporary workers, or employees who are only with the organization for a limited time, as stipulated in a contract.
In this article, you will learn about 1) the nature of temporary and contract work, 2) what are the reasons for hiring temporary workers, 3) the advantages and disadvantages of hiring temporary and contract workers, and 4) the rights and entitlements temporary and contract workers have.
THE NATURE OF TEMPORARY AND CONTRACT WORK
Temporary work goes by a lot of names, each one basically pertaining to the same concept. Some use contractual work to refer to this type of employment, while others simply use the shortened term “temps” to refer to people who perform these temporary work. Some even go so far as to call it a type of freelance work, and some companies also sometimes refer to its temps as “casual staff”.
It all basically revolves around the same principle of temporary work.
There has been a steady increase in the number of temporary workers in the United States and around the global working world, with the recent years seeing an accelerated rise, mainly due to the increased globalization.
These days, we can also see more and more temporary work agencies or temporary staffing firms operating, offering the service where they provide temporary workers for companies or businesses that need them. Temporary employment is characterized by the following:
- The period of employment is limited to a specific period of time, usually for the short-term, and often not exceeding one year. Companies specify a fixed term within which the workers will be employed with them. These are called fixed-term contracts. Sometimes, it coincides with a project period, where employment will cease once the project has been completed. These are project-based contracts.
- Hiring by companies is primarily based on its needs at a certain point in time, with these needs expected to be fulfilled in the short term.
- As a general rule, temporary or contractual jobs do not offer the workers prospects of a long-term employment relationship with the company. The relationship ends when the term indicated on the agreement or contract lapses.
- Temporary workers may also receive benefits from their employers, such as health and medical benefits. However, these benefits are significantly lesser or lower than what is being received by permanent workers. In many instances, some employers do not even give any benefits to temporary workers, other than the basic compensation agreed upon and required by law.
There is a general confusion among many people about the nature of temporary workers being similar to that of part-time workers. This is not conclusive at all, considering the fact that temporary workers may work on a part-time basis, if the nature of the job or work to be done calls for it. Similarly, permanent workers may also work part-time if that is what the job dictates.
If there is one area where permanent and temporary employment differs greatly, it is stability. Permanent employees are pretty much assured of having a job and a steady source of income from one pay day to the next, until they are laid off or fired, or when they voluntarily resign or reach the age of retirement. Temporary workers, however, are working on “borrowed time”, so to speak. The assurance of having a job and earning their pay will only last for the period that was indicated on the contract.
The simplest form of temporary work would involve a worker walking straight into a business establishment that is looking for people to perform seasonal jobs. Or they could go to a temp staffing agency and join the firm’s pool of temporary workers. Companies that are looking for short-term workers will engage the services of the temp agency, and when you fit the qualifications that are being looked for, you are likely to be one of the workers who will be sent to the company. Of course, internet has opened another door on how to gain temporary employment, with staffing websites and apps now available for temporary workers to look for employment.
Interested in how job seekers are looking for temporary work? Read these slides.
REASONS FOR HIRING TEMPORARY WORKERS
There are several reasons behind the decision of many businesses to hire workers on a temporary or contractual basis.
- The nature of the job is more suitable for temporary workers. There are jobs that are seasonal or interim in nature, and this is where temporary workers are deemed to fit in perfectly. They will only hire the workers when they are needed, instead of keeping permanent employees and have them work for only the first half of the year, and then end up not knowing what to do with them during the second half.
- Immediacy or urgency of manpower needs. Sometimes, companies find themselves in urgent need of personnel to perform a specific task (due to employee absences, leaves and sabbaticals), and they simply do not have a lot of time to conduct full-length recruitment and screening processes. It would be much faster if they simply call a temp agency and tell them what is needed.
- Highly technical requirements of the job. The company may find itself in need of the expertise of highly technical people for a specific project or an aspect of its regular processes. However, they cannot find anyone among its current roster of employees to be able to address the need. The quickest way would be to seek temporary workers to act as advisors and consultants, bringing their specific and often rare expertise to the table.
It is a reality that some employers also hire contractual workers for reasons that are not completely ethical.
For instance, there are some businesses that are more partial towards contractual workers because they want to avoid having to make mandatory payments of benefits and compensation. This becomes more apparent when you spot an employer that rehires the same temporary workers over and over which, in a roundabout way, makes their employment long-term, but broken down into contract periods.
Employers try to justify this as a cost-cutting measure, when they simply refuse to pay the employer’s share of employee benefits such as insurance premiums and health and medical benefits.
ADVANTAGES OF HIRING TEMPORARY AND CONTRACT WORKERS
Let us go over the many advantages of hiring temporary employees and workers.
Clearly, this is one of the major motivators of employers when considering whether to hire workers temporarily or on a permanent basis. Hiring new people on a permanent basis has corresponding costs that will be incurred. Compared to permanent employees, temporary workers are not entitled to some benefits and compensation.
Thus, when the companies hire temporary workers, they are not obligated to make these payments, resulting in cost savings.
Staffing costs will be greatly reduced if the company keeps its workforce “lean and mean”, meaning the staffing levels are flexible and kept optimal. The number of regular or permanent employees is just enough so they are all productive.
In the event that they need more people for a specific period of time or for a specific project, they just have to hire temporary workers. This is certainly more cost-effective than keeping on a lot of permanent employees on staff, with some of them becoming unproductive at certain points.
You may also have to train these employees so they will be better equipped for the job. If you hire a temporary worker, you will be spared much of the expense associated with recruitment and hiring. Since you can also specify the skill set or qualifications that you need, there is no longer a need to spend on their training.
Boost morale and productivity in the workplace
Believe it or not, hiring temporary workers can also have a positive effect to the atmosphere In the workplace. For example, temporary workers may come in, taking on the role of rescuers and helpers, providing much-needed assistance to the permanent employees. They will be able to help in keeping the regular employees from becoming overworked, because they share in the load.
Regular employees may also feel more motivated to work when they see temporary workers come in. Humans, by nature, are very competitive, and for many permanent employees, the idea that a “mere temporary worker” is more productive and can perform better, may not sit so well with them. Thus, they will be more inclined to improve their performance.
There is a lot of paperwork involved when it comes to hiring – and even firing or laying off – employees. Say, for example, that you have a project coming up and you need new people. The process of recruitment is tedious, and has a lot of documentation involved.
On the other hand, let us say that an employee suddenly has to go on leave due to an emergency, suddenly leaving you short of hands at work. Firing that employee also means having to accomplish additional paperwork, so your quickest option is to hire a temporary worker to take the employee’s place, at least until the latter returns to work.
Specialized skills and talents
Business organizations have their respective structures, designed according to the nature of their business operations and their needs. More often than not, however, these structures are designed with the long term in mind. That means that they often do not include positions that are needed for the short term.
Take, for example, a construction company. Their main operations revolve around construction work, so they will hire people with the appropriate qualifications. They will not hire computer programmers on a permanent basis, because they will not be involved in the main operations anyway.
The way to get around that is to hire a computer programmer on a contractual basis; the moment he is able to develop a program that will be used by the business for tracking and monitoring construction projects, then the contract would have been completed and, along with it, his period of employment.
Probationary or trial period
The general rule is that temporary workers are not to expect ending up becoming a permanent employee of the employee once their contract is over. But there are exceptions to this rule, because some companies actually look at temporary work as a way to test employees, and evaluate their suitability for the company in the long term.
Their period of contractual employment is actually akin to a probationary period; if the employer is impressed and happy with their performance, he might offer a permanent position for the employee at the end of the contract.
In the same way, many workers opt to take on temporary jobs on the off-chance that they will be able to land a permanent job. They view their period of temporary or contractual employment as one long interview process.
For the company that is hiring, the advantage of this practice is that they will feel more confident in making the hiring decision, since they have already seen the employee in action, and know the quality of his work.
DISADVANTAGES OF HIRING TEMPORARY AND CONTRACT WORKERS
It would be remiss of us if we only speak of the pros of hiring temporary workers and not talking about its cons. Yes, temporary workers and contractual workers have drawbacks from the point of view of businesses.
Time spent on training temporary workers
There are projects that are highly technical, requiring the workers to have specific skill sets that match these requirements. If the new hires are not equipped with these skills and knowledge, there is a need to train them.
Training them takes time, that could have been spent working on the project or the job right away. It becomes even more exhausting and time-wasting when you have several contract periods in one year. Every time a new employment contract starts, training also begins. That is a lot of time wasted.
We have cited that hiring temporary workers could boost the morale and motivation of the permanent employees. That could swing the other way, too, because the permanent employees might view the contractual workers as threats to their own employment.
They may see them as competitors, which could lead to disharmony in the workplace. Even the temporary workers may also end up disheartened by the fact that they are putting in the same hours and the same amount of work as the permanent employees, but are not getting the same benefits.
Higher risk of legal liability
A company that has established a reputation for hiring temporary workers tends to draw the eye of regulatory agencies. They are likely to be suspected of trying to escape the responsibility of paying the full benefits due to permanent employees so they hire contractual workers instead. This undue attention can reflect badly on the image of the company as a whole.
RIGHTS AND ENTITLEMENTS OF TEMPORARY AND CONTRACT WORKERS
Temporary workers, contractual employees and casual staff, also have rights and entitlements beyond their basic compensation for their job. Just like permanent employees, temporary and contractual workers are entitled to be paid an amount commensurate to the work that they put in.
In some instances, especially in highly technical fields or where the temporary worker enters the company in a consultative capacity, they could demand higher compensation. This will be negotiated, and the final agreement will be stated on the contract.
But it is a reality that temporary workers often do not get as much benefits and additional entitlements as permanent employees do.
You may have heard of some temporary workers getting health insurance and medical benefits from the company, but those instances are quite rare. In fact, it is hard to find a company that gives the same type and amount of benefits to its permanent and temporary employees. The decision on whether to give more benefits to these short term employees will largely depend on the management itself.
This does not mean, however, that temporary employees do not get anything. Usually, if they are part of a temp agency, they will get benefits from the agency, and not directly from the company. There are temporary staffing firms that give incentives and benefits to employees that have served longer tenures.
Other than the issue on compensation and benefits, temporary employees have the same rights as the permanent employees in terms of the following:
- Safe working conditions
- Conducive working environment
- Freedom from discrimination, on the basis of age, race, color, religion, or beliefs
There are different state laws governing the issue on temporary employment, so depending on the state where the company or business is based, they will have to adhere to what the law imposes.
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