Temporary vs Permanent Staffing: Which One Should I Opt For?

Upon closer inspection, you will observe fundamental shifts occurring in both the business and HR realms. Gone are the days when businesses used to function on traditional terms and policies. Modern organizations face a more dynamic landscape marked by constant change and intense competition. And adapting to the ever-evolving business landscape, going beyond the textbook rules has become essential.

Among all the elements of a successful business, skilled staff plays an essential part; it is even called the lifeblood of the business. A business can opt for two different types of staffing: temporary and permanent staffing, each having its own unique pros and cons.

A traditional approach advocates the idea of permanent staffing for its sheer stability and loyalty. However, in this modern time, temporary staffing is gaining momentum. According to a report, the temporary or contract staffing market is projected to grow by $130.20 billion by 2030. But as an HR expert, which should you opt for in your organization?

In this new HR edition of the Pitch N Hire newsletter, we will delve into the temporary and permanent staffing systems, understand how they impact your organization, and provide guidance on the preferable choice.

What is temporary staffing?

As the name suggests, contract or temporary staffing is the temporary employment of individuals to meet specific business needs. Temporary workers, or temps, are typically hired to fill in for absent employees, meet seasonal demand, or complete specific projects.?

Did you know that in a year, American staffing companies hired more than 14.5 million temporary employees?

Examples of temporary staffing

• Temporary software developers and programmers are hired for specific software development projects.
• Temp filling in for an employee who is on maternity leave.
• Accounting firms hire temporary employees who can do taxes and handle the surge in workload during tax season.
• Hiring employees to complete year-end data entry tasks.

Advantage

1. Flexible: It provides great flexibility to your workforce, as temporary staffing can serve as a means to balance fluctuations in workload in different projects.
2. Cost-effective: Considering its short-term contract, this can be cost-effective if you need employees for a specific project or season.
3. Specialization: With its swift onboarding process, contract staffing provides specialization for short-term projects, allowing you to access specialized talent quickly.

Disadvantage

1. Training investment: Companies that operate on specialized software often struggle with temporary staffing as it demands investment in training new employees.
2. Lack of continuity: Though the onboarding process is easy with the temporary staff, they may not be as dedicated as their permanent counterparts.

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What is permanent staffing?

Permanent staffing involves recruiting individuals for the long term, considering their specific skills contributing to the overall workforce. These employees are internal members of the organization whose tenure is not limited to a particular season or project.?

This is a traditional and most prevalent employment model where employees are expected to remain with the organization for long and receive benefits like health care insurance and retirement plans.?

According to a study by the American Staffing Association , 73% of US staffing employees are full-time.

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Advantage

1. Stability: Unlike temps, permanent employees offer a stable and more reliable workforce that cares about the job and outcome of every project.
2. Loyalty: A permanent workforce can be more loyal to the company and believe in a team world. This can help you foster a better and more positive work environment within the organization.
3. Long-term investment: According to a study, the average cost per hire is around $4,700 . Yes, hiring permanent workers demands a heavy initial investment. However, investing in permanent employees fosters long-term skill development and knowledge retention, contributing to the company's overall growth.

Disadvantage

1. Inflexible: Permanent employees may struggle to adapt and provide flexibility in response to changing project demands.
2. Onboarding period: On average, hiring an employee for a permanent role takes 20–40 days, which can delay project timelines and execution.

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What to choose and when? Temporary or permanent staffing

In this modern business world, where the market is growing increasingly saturated, HR experts favor a hybrid staffing method. Under this method, the advantages of both methods are hinged on achieving optimum efficiency and reducing operational costs.?

Here is what to consider before making a decision:

Nature of work

Assess if your operational activities follow a seasonal, project-based, or ongoing structure. For short-term seasonal or project work, consider temporary staff. But if your organization involves long-term commitments, opt for permanent employees who can stabilize your workforce.

Budget

If your department or organization is under tight budget constraints, hiring temporary staff is advisable.

Legal obligations

Hiring permanent employees keeps the hiring department and organization busy, as they come with legal obligations such as leave pay, retirement plans, and employment law compliance. If your organization cannot handle such legal obligations, temporary staff can be your answer.

Skill requirement

Analyze whether your organization needs specialized skills for a short period or if it needs to fill a permanent skill gap. If it's long-term, you can choose permanent staffing.

Hire the best talent with Pitch N Hire’s ATS

Whether temporary or permanent, finding the right candidate who actively contributes to the overall workforce is essential for any organization. But tracking and hiring the top talent is not an easy task. It involves several time-consuming manual processes, like job posting, resume parsing, and onboarding.?

After all this, it can still be a bad hire, costing you additional hiring costs. And that's where Pitch N Hire's ATS (application tracking system) steps in. It is an AI-powered system that embraces the tried-and-tested methods of traditional hiring and incorporates modern tools such as a visualized pipeline, automated job posting, and streamlined interview scheduling. This enables the HR department to track and hire the best employees in record time.