Read on as we explore the nuances of temporary and permanent staffing— including the key differences, challenges, cost implications, and benefits of each option.
Understanding the differences between temporary and permanent staffing is essential for businesses aiming to optimise workforce management.
As the recruitment landscape evolves, businesses often face the crucial decision of whether to hire temporary staff or to hire permanent staff instead. This decision cannot be taken lightly, as it impacts an organisation's operational efficiency and strategic goals.
Key Differences Between Temporary and Permanent Staffing
The most recent report from the Australian Bureau of Statistics revealed a 0.4% decrease in full-time employment and a 2.2% increase in part-time employment. While this highlights a downward trend in permanent staffing and an upward trend in temporary staffing, it doesn’t offer a comprehensive overview to help you decide which staffing mode to choose for your organisation. Let’s discuss some factors to consider as you try to make an informed decision for your company.
Duration of Employment
● Temporary roles are typically short-term and range from a couple of days to weeks or months. They can be project-based or set up to cover a leave period for a permanent employee.
● Permanent roles offer long-term employment with no fixed end date. For instance, when you hire a permanent employee, they can grow within the organisation until they or the company terminates the agreement.
Contract Terms for Temporary Staff
In Melbourne, temporary contracts vary depending on employer needs or employee capacity. However, new regulations specify that temporary contracts end after a set period and cannot exceed two years. Also, employers should provide temporary employees with a Fair Work Information Statement (FWIS) and Fixed Term Contract Information Statement (FTCIS) when entering a fixed-term contract. Standard contract terms for temporary staff include:
● Start and end date
● Hourly rates the employee is expected to work overall
● Compensation specific to agreed-upon rates
● Benefits employee is entitled to while on contract
● Detailed job description
● Performance expectations
● Termination clauses
Hiring Process
There are differences in the procedures companies must follow when hiring temporary versus permanent employees.
1. Evaluate Your Need
Understanding why your organisation requires a temporary or permanent employee is essential. Is it to fill in for a permanent employee on leave or due to a seasonal increase in workload?
On the other hand, a permanent employee search indicates a deeper need. Did an employee leave the company, and you need a replacement, or is there a huge new long-term project that requires a certain level of expertise your current team lacks?
Answering these questions helps you identify the need and guide your talent acquisition process.
2. Choose a Recruiting Option
It is crucial to assess the resources available to you. If your company has sufficient time and a dedicated recruitment team, you can use these internal resources for talent sourcing. If time is limited, you can outsource recruitment from a talent agency with extensive experience and a large pool of suitable candidates to choose whether you need a temporary or permanent hire.
The in-house recruitment team or the agency you hired will create job ads to attract candidates who meet the job requirements.
3. Start Reviewing, Screening and Interviewing
No matter which recruiting option you choose, a temporary employee's reviewing, screening and interviewing processes are often brief due to the low investment. It can be a few days long or up to two weeks.
On the contrary, hiring a permanent employee is extensive because the investment is long-term. It can take several weeks or months and typically involves rigorous screening, multiple interview stages, and thorough background checks.
4. Offer and Negotiation
Making offers and negotiating for temporary employees is quick, typically taking a few hours to a few days. There is usually little room for extensive negotiations as the roles have immediate requirements.
On the other hand, this step may take days to weeks for permanent employees as it involves detailed discussions around base salary, performance bonuses, and benefits packages. Also, multiple stakeholders are usually involved in the decision-making process, which can cause delays in finalising the negotiated terms.
5. Prepare Employee Onboarding
The onboarding process for a temporary employee is short and straightforward, focusing solely on the specific role or project they are needed for.
This process is more comprehensive for permanent hires and often includes orientation, training, and integration into company culture.
Cost implications
Temporary employees usually receive higher hourly rates compared to permanent employees. However, due to their short-term status, businesses can save costs and avoid long-term financial commitments and comprehensive benefits.
Permanent employees receive a monthly salary and additional benefits such as annual raises, bonuses, paid time off, superannuation, and health insurance.
Employer Responsibilities
Firms are responsible for ensuring temporary staff are effectively integrated into projects and offered necessary support. Similarly, they are responsible for fully integrating permanent employees into the company processes and delivering performance management and career development opportunities.
In addition to that, the Fair Work Act states that all employees are entitled to workplace rights. While temporary workers are limited to general rights such as fair treatment, safe work environment, fair payment, and all other contractual agreements, permanent staff also have the right to receive job security, career development opportunities and protection against unfair dismissal.
Ultimately, employers must honour these rights and responsibilities and ensure compliance with the Fair Work Act.
Adapt and Align Accordingly
The people you hire can have a considerable impact on the success of your business. It’s vital to ensure that the staff you bring on board are a good fit for your business needs.
If your team is overwhelmed with the workload due to seasonal or short-term project demands, consider hiring a temporary employee. If your organisation needs flexible support while on a budget, you can save costs by hiring a temporary worker. Read why it is beneficial to have a flexible staffing strategy. This approach allows you to meet your business needs quickly and expand your workforce without making long-term commitments to employee training, salary, and benefits provision.
On the other hand, if your firm needs ongoing support, it’s better to consider hiring a permanent employee as they provide stability in the long run. Permanent employees can also grow, advance in their careers, and find job satisfaction, leading to lower turnover.
Choose the Right Staffing Option For Your Business
When choosing between temporary and permanent staffing, it’s essential to consider various factors, such as your business size, industry, needs, budget, and long-term goals. Although it may not be an easy decision, understanding the staffing differences and the value each option can bring to your firm can help you make the right choice. Check out these best practices for maximizing productivity with temporary staff.
At WellsGray, we recognise the importance of finding top talent that aligns with your needs and contributes to your business goals. Get in touch with us today to begin your journey to finding top talent for your firm.
