Temporary employees or staff is those people who are employed by the company only for a definite and predetermined period of time or only for a specific project. On the completion of that project, those employees will cease to be the part of the company unless their contract is renewed. Whereas regular or permanent employees have no such predetermined fixed date and can work in the organization till they retire, quit or are laid off. Both types of employees have their own advantages and disadvantages.
Benefits of temporary employees
Temporary employment will allow an employer to hire a person for a particular task or project which is beyond the employer’s capabilities. It can also be done as a replacement for a permanent employee. Once the purpose for hiring a temporary employee is over, the employer need not lay-off or fire that employee. Since the employment was for a particular period of time, term will end automatically unless there is a renewal.
Temporary employment is also a good source of testing the potential of new employees before giving them a permanent position.
Drawbacks of temporary employees
Hiring of temporary employees again and again leads to wastage of time and energy, since lot of efforts are taken in order to train them. It also leads to loss of productivity since because you have to start afresh with each new temporary employment contract. Besides, company may have to face legal consequences if it hires same employee again and again on temporary basis, in order to evade giving of the benefits to the permanent employee.
Permanent employees save a lot of time which is spent on temporary employees in their training. Permanent employees also add to the growth of business as they are more efficient in their jobs, the familiarity to their work environment may be the reason behind it. But as an employer, you may lose the flexibility to promptly incorporate the changes if employee is resistant to change. Apart from that, if there is not enough work for keeping the permanent employees busy all day, you may have to cut their working hours.
People usually interchangeably use independent contractor and temporary employees. Temporary contractors are nothing like independent contractors. While latter may work only for a specific fixed period of time, or own project they carry on their own business and use their own equipment. They also follow their own procedure to complete the given task. But if an employee follows your instructions and procedure and work under your direction notwithstanding the outcome of the project then that person is the employee of your company. It is mandatory to complete proper tax forms and pay relevant employee charges irrespective of whether the employee is permanent or temporary.
If the company is diverse and consists of a variety of projects, hiring a skilled temporary employee will be beneficial as it will enable you to find the perfect person for each project. A company should hire according to its needs. Where temporary hiring is an ad-hoc solution for your staffing needs, permanent employment is for long term goals.