Permanent Staffing vs Temporary Staffing
Permanent staffing and temporary staffing both has their own pros and cons. After reading this article you’ll be able to decide what type of staffing is right for your organization.
Staffing is a critical function for any enterprise and it requires a hefty investment of both time and money. In a recent study conducted by Careersbuilder, 66% of US companies they interviewed claimed that they were affected by bad hiring decisions.
The study also reported that a single bad hire could cost US companies more than USD 50,000. These numbers were much higher in some European and the BRIC countries. Therefore it is not surprising that most companies invest substantial amount of resources on their staffing decisions.
Broadly speaking there are two main types of hiring – permanent and temporary staffing. Temporary staffing is usually to fulfill the organizations short-term requirements or to complete specific needs that may not be part of the core business operations, whereas permanent staffing is generally with the intent to retain the employee for a longer period of time and focused on critical business functions. It is important for an organization to understand the type of staff it requires, in light of its business needs and goals.
Most firms go for a mix of both permanent and temporary staff and the following article list some considerations on a firms staffing decisions:
The first and foremost factor that any enterprise considers when hiring a candidate is the cost. Permanent staffing may prove to be expensive in the long run, since the payroll and benefits are taken care of by the organization itself.
By comparison, if that firm hires a candidate through a staffing services provider and on a temporary basis, the entire payroll is borne by the outsourcing partner. Temp staffing also enables a firm to leverage the cost differential in salaries for the same skill set, across various countries.
Generally speaking, for short term requirements say, for an upcoming project or as a role-fill in the short term, it is advisable to go for temp staffing.. In addition to being cost effective, it would also save the organization time and efforts involved in the hiring process for a full time employee. With a good skill-set match for the job role, the organization would not need to invest in training the new part-time candidate hired.
In terms of loyalty, permanent hiring may be better compared to that of temporary hiring. This is because direct staff may put in more efforts and work towards creating a better impression so as to gain a long term employment.
On the other hand temporary hires may only be concerned with meeting the current requirements and in putting in the required time. Permanent staffing also allows firms to retain better control over their work culture & productivity
With no firm commitment, temp staffing offers the flexibility to make changes if the employee fails to meet the desired role requirements. However, one should be wary that making constant changes to the temp role can eventually turn out to prove expensive, loss or morale and possible dip in productivity notwithstanding Permanent staffing can prove beneficial in such cases since employees hired are highly trained and qualified, on the firms payroll and available at all times. They can also aid in the growth of the business since they are more efficient at their jobs and are familiar with the processes.
Overall temporary staffing allows the firm to outsource functions / roles that are necessary but not core to their business strategy and operations, whereas permanent staffing should be kept for all business critical functions.
Legal obligations of country or states law can also become a problem when it comes to temporary and permanent staffing. Many enterprises, in order to save the expenses of paying benefits and other forms of compensation to their permanent staff, opt for temp staffing. This may get such enterprises in legal troubles, though the regulations may vary from country to country. Hence, it is advisable for firms to choose the staffing strategy wisely and within one’s legal limits.
To conclude, selecting the right type and mix of staffing is crucial and depends on the firms business goals.