When to Use Temporary Instead of Full-Time Regular Employees

Business is picking up and so are your employees’ workloads. This is great news – except you now find your team spread too thin and risk projects falling through the cracks. You know you need additional resources – but where do you begin? When debating whether full-time regular hires or temporary employees will best meet your needs, a variety of factors should play into your decision.

Understand the Differences

Regular Employees – Regular employees are those who are in a traditional employee/employer relationship with a company. They work around 40 hours a week, are employed directly by the company and typically have W-2 status. In most circumstances, payroll taxes are taken out of full-time employees’ paychecks and they are eligible for the company’s benefits plan.

Contract and Temporary Employees – There are two types of contract/temporary employees. Some have 1099 status and are technically self-employed. These may be consultants or temporary employees who are not affiliated with a staffing firm. They do not receive benefits or unemployment insurance. The other type of temporary employees are those who are provided by a staffing firm. The staffing firm may give them W-2 status and benefits. The staffing firm manages payroll when employees are on assignment with a company and also handles any unemployment issues.

When should you hire full-time regular employees? It is likely that you are most familiar with the standard employee/employer relationship. As we all know, finding the right employee to fill an opening can be a time-intensive task. Yet, in many instances, this is the right route to take if an employee has recently left, leaving a crucial position open, or if you anticipate a long-term increase in business.

Full-time regular employees typically maintain a steady day-to-day workload. They complete the actual work of your business such as claims, customer service, processing premium/billing or underwriting.

If you are bringing on a regular hire, you must dedicate the time necessary to identify and recruit the right candidate for the position. Keep in mind that this also includes training the new hire on internal processes and continuing to develop and retain them throughout their tenure with your organization.

Here are a few questions to ask yourself if you are considering a full-time hire:

• Are your needs consistent and long-term?
• Are your attrition rates lower than your competitors’?
• Do you have the capability to mentor and develop the position internally?
• What is the development/training timeline versus the timeline required for results?

When should you utilize temporary employees? There are several instances where contract/temporary employees may be the best solution for your specific situation. If you have a spike in your organization or team’s workload, contract employees can help manage the excess, while allowing your regular employees to continue performing their standard responsibilities.

These workload fluctuations may be seasonal, such as an increase in claims during a storm season, or caused by new applications or high call volumes.

Also, needs may arise when your organization is going through a transitional phase. Often during mergers and acquisitions, repricing, or the introduction of new processes or products, additional employees are required.

The third scenario when temporary employees may be beneficial to your organization is if you are in the process of filling a full-time position.

Don’t let the stress of an open position or overwhelming workloads rush you into a decision you may later regret. By taking time to fully analyze your organization or department’s needs and ask the right questions, you will uncover the best human capital solution for your specific situation.