Temps Deliver Benefits - Are They Right For You?

A PDF version of this article can be downloaded here : https://www.lrgwa.com.au/wp-content/uploads/2019/08/The-Pros-Cons-Of-Engaging-Contractors.pdf

Whatever the type of work you’re engaged in, the company you’re with or the sector they operate in, you’ve either yourself been, or worked alongside, a Temp. In the financial year just finished, it was estimated that temporary staffing services in Australia generated more than $28bn in revenue, of which $20bn is in wages. Furthermore, these figures are predicted to see steady growth in the near future.

Temporary, contract and casual staffing offers employers a high degree of flexibility in the way they manage their workforce. Implementation depends on a number of factors, including workflow, seasonal changes and economic forecasts. Casual employees who enjoy and actively seek work of this tenure, tend to enjoy the flexibility and variety it offers.

There are situations when utilising Temps is highly effective and others where it simply isn’t a workable proposition. This article is written as a general guide for employers who may be considering introducing casual or contract staff to work alongside their existing permanent team members.

So, if you’re not sure of the best way forward for your business, here are the key points to take into consideration.

Do you need a skilled workforce?

If the people you’re looking to engage are skilled workers, there is a very high possibility that they will be in high demand. This really does enable them to pick and choose who they work with and their remuneration. This inevitably leads to a lot of movement as good people move to companies offering better pay and conditions.

In instances when your production is dependent upon properly skilled and accredited people, we recommend a move towards a permanent or term-contract workforce, which should enable you to plan more effectively and enable better cost control.

We do have a recommendation: Consider ‘completion bonuses’ for in-demand people and those on an assignment of more than four weeks. Simply, agree the minimum term of the assignment, settle on an amount and pay it upon the assignment being successfully completed. This will lead to less of your contractors leaving before the work is completed, eliminating, downtime and the expense incurred with on-boarding new people.

Is your industry seasonal?

Many, many businesses will experience peaks and troughs due to seasonal factors. It makes perfect sense to engage a casual workforce to help you during the peaks. Depending upon the nature of the work you need managed, it is best to stay abreast of candidate availability in the months leading up to your peak period.

Are you unsure of the economic situation?

If you’re thinking of expanding, have a number of short to medium term projects underway or are unsure of exactly what lies ahead, casual staffing may give you the flexibility you need to move forward. You can then increase the hours available to meet with demand and consider permanency to well-performing Temps.

Are Temps happy to take on part-time assignments?

Temps are typically looking for an arrangement that best suits their lifestyle, family and economic situation. If the hours you have available meet these expectations, you will be able to engage someone. The most typical example being parents who only wish to work during ‘school hours’.

Do you need cover for a fixed-term assignment?

We’re typically thinking of coverage here for maternity/paternity leave, fixed-term projects and annual leave in excess of four weeks. It really depends on a number of factors: Can the workload be shared amongst existing team members? Are there training and induction concerns? If the answer to these questions is ‘No’, you should engage a Temp.

 Would your Temps be ‘Customer-Facing’?

Please consider this example: One of your sales team spends their day ‘cold-calling’ on the ‘phone to potential customers, the other is managing enquiries and orders from your existing client base. It should be pretty obvious which of these roles in best suited to a casual employee.

Your clients won’t be happy dealing with multiple contacts, and it starts to tell a story when every time they ask for someone the response is ‘I’m sorry, he’s no longer with us’. That’s why we recommend engaging your client-facing staff on a permanent of fixed-term contract basis.

What’s covered in an ‘hourly charge or pay rate’?

If you manage ‘hourly’ casual staff on your own payroll, you still have to allow for leave and sick-pay loading, workers compensation, superannuation and statutory taxation. You will also need to manage PAYG for your staff.

If you are engaging your Temps through an agency, all of this will usually be included in the hourly rate for which you are invoiced, People who engage with you under a contract or ABN arrangement, will usually take care of their own financial affairs, although it is important you are aware that their well-being whilst working at your premises is still a potential liability for you to consider.

What’s the culture like in your workplace?

This is an important consideration. We have placed Temps into some environments which seemed positive from the outside, only to find that our staff were excluded from conversations and not made as welcome as they could have been. Needless to say, they had no wish to return.

Unless a casual is contracted as a ‘Person Friday’, responsible for making coffee, emptying the bins and collecting dry-cleaning, it’s best not to ask them. Believe or not, we’ve heard many a story of Temps being told ‘you’re the casual so you do the stuff we don’t want to’.

Are you concerned about Temps and Contract staff leaving during the assignment?

This is something that is pretty much beyond your control, but you can have an impact upon it. If a Receptionist is engaged for a twelve-week assignment and after ten weeks they are offered a similar assignment with ‘an immediate start’. The chances are that financial necessity means they will accept the new role and leave you short-handed.

We recommend ‘Completion Bonuses’: Payable to the Temp, as the name states upon successful conclusion of the role you’ve contracted them for. This will go a long way to ensuring your Temp ‘stays put’.

If a Temp has worked the agreed thirty hours a week for the last ten weeks, with a completion bonus of $2.00 per hour, they are going to have to walk away from $600.00 to take that new assignment. This should be enough to ensure they stay another two weeks. This sounds like a fair chunk-of-change until you factor in the downtime of engaging and training a new Temp: Then it’s a bargain.

Will Temps improve your cash-flow?

If there is one message I would like you to take from this article it would be this: Engaging Temps will not realistically improve your cash-flow. They will offer you the flexibility to better manage your outlay for wages.

If you typically pay your staff weekly and contract an agency who you agree to pay monthly, you will get a short-term lift in your cash-flow, however you’re not saving money, just deferring payment. Most agencies are wary when approached by potential clients in these circumstances.

Can I transition my existing permanent staff, to a casual or contract arrangement?

The simple answer to this is ‘Yes’. During the mining downturn, one of our clients made the tough decision to ask their small team to continue on a casual arrangement as their regular 38-hour week was no longer achievable. To engineer this, they paid their staff four-weeks’ severance pay as well as any annual leave they were owed. They left the office on Friday evening and returned the following Monday as casual employees, performing the same duties, on the same hourly rate plus loading.

This arrangement offered our client the flexibility to reduce employment to between twenty-five and thirty hours per week, per staff member, and maintain their business. They’ve all gone from strength-to-Strength: Every person is now back to full-time, permanent employment.

Are you looking to eventually hire someone permanently?

Most agencies supply temporary staff with an option to offer permanency written into their agreement with you. This is referred to ‘test driving’, ‘try before you buy’ and other terms. This arrangement works pretty well. It offers employee and employer a good chance to get to know each other and the culture of the workplace. One thing to take into consideration as an employer is that a permanent employee is unlikely to leave their role to take up a ‘casual trial’ with your organization, which will impact upon the range of potential candidates you can choose from.

If there is the potential for your casual assignment to become a permanent arrangement, make sure you cover off on this at the interview and initial engagement stage. Bear in mind, that some Temps are not looking for permanency and you don’t want to start again with a new staff member three-months down the track.

How can you make a casual employee ‘feel at home’?

We’ve already touched upon how important a welcoming culture is for casual employees. Try to involve them in all aspects of company life. I once managed a contract for an industrial recruiter at The Perth Mint. We had over 120 employees engaged within the Minting Operation, meaning that casual staff outnumbered permanent employees by a ratio of 3:1. We arranged to make a monthly payment on behalf of our employees, that covered their subscription to the social club. Any of our casuals were automatically a member for the term of their assignment. We also made sure that all of our shirts bore our company logo and that of The Mint, side-by-side.

Do you have security and IP concerns?

We’re not for a moment trying to suggest that casual employees are inherently more dishonest than permanent staff. We are advising that if you do have security and IP concerns, it might be prudent to restrict access to permanent employees.

Disclaimer: The information contained herein is offered as a guide only and classified as general information. Lloyd Talent Management cannot be held responsible for any loss or damage to your business, should you use this information in any way. ?2019 : Lloyd Talent Management.