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Temporary/Contract Hires vs. Permanent
When there is a positive change to your business, often you look at the option of hiring additional staff. If you are like most business owners, you would rather contribute to furthering your business. Spending time placing ads on the Internet or in newspapers, screening 50 plus resumes and applications, interviewing five (plus or minus) candidates, having to make the hiring decision (which sometimes doesn't work out), and then going through the new hire "negotiations" may not be how you want to spend your time. Some small business owners aren't comfortable doing these tasks because they question their "human resource" expertise.
One alternative to adding permanent staff is to hire someone on a temporary or contingent basis. To help you make the basic temporary vs. permanent decision, please review the reasons it may make sense to hire a temp, below.
Sometimes the answers to these questions would suggest that a temp hire is not the best alternative but you'd still rather start out that way. There is another scenario under which a temp hire may make sense and it is called a temp to perm' placement.
If you want to make sure someone will work out longer term without the uncertainty of the outcome, the best way to make that "permanent" decision is to "try before you buy." The advantage of this approach is that you can observe the person doing the job for a period of time before you have to make the final hiring decision. That's the most reliable selection process going.
Here are a number of very good reasons to hire someone on a temp basis:
But does this approach actually save you money? In most cases it can, but you need to be sure you understand the temp agency's compensation structure as well as what percentage of the fee is going toward paying the temp, what percentage is spent on taxes/benefits, and what percentage is their fee. Most temp agencies only charge you, the business owner, for the time actually worked, they pay the temp hire and assume full responsibility for all payroll taxes, social security, workers' compensation and unemployment insurance.
Before you agree to an arrangement with any temp or contingent hire company, you should complete a bit more "due diligence" by gathering information on the business and making sure the temp agency can reasonably perform on all the "advantages" they may cite to you, since they are marketing their services to you. Below is a list of that information.
You should also carefully review a copy of the agreement that will be signed by you and the temp agency that details in legal language the relationship parameters of your business interaction. Make sure that document agrees with the information you garnered by asking the questions noted above.
Assuming you agree to do business with a temp agency and hire someone on a contingent basis through them, you still need to integrate your temp employee into the flow of your business and your work environment. You might want to consider the following "punch list" when doing this temp-hire orientation.