Should you hire a permanent or temporary employee?

The differences between hiring a permanent and temporary employee 

When it comes to workforce planning, one of the key decisions you'll face is whether to hire a permanent or temporary employee. Both options have advantages and disadvantages, and the right choice depends heavily on your specific business needs.

• Permanent employees are hired for long-term positions, offering stability and continuity. They're typically entitled to benefits like health insurance, paid time off, and retirement plans.
• Temporary employees are hired for a specific period or project, often through a staffing agency. They provide flexibility and can be a cost-effective solution for short-term needs. 

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Benefits of hiring a temporary employee

• Flexibility: Temps allow you to scale your workforce up or down quickly, adapting to fluctuating workloads or seasonal demands.    
• Cost-effectiveness: Filling a permanent vacancy is often a costly undertaking. Hiring the wrong permanent employee is even more expensive. Temp hiring can help you avoid these long-term costs, such as benefits and ongoing training.    
• Specialized skills: Hiring temp employees can provide access to specialized skills for specific projects without the need for a permanent hire.    
• Reduced risk: If a project doesn't pan out or a candidate isn't a good fit, ending a temporary contract is generally easier than terminating a permanent employee.
• Coverage for leave: Temps can cover for permanent staff on maternity leave, sick leave, or extended vacations.
• Trial period: Temporary positions can serve as a "try before you buy" opportunity, allowing you to assess a candidate's suitability for a permanent role (more on temp to perm hiring later).    

Related: Six business benefits of temporary recruitment

Benefits of hiring a permanent employee

• Stability and continuity: Permanent employees provide a stable workforce, fostering long-term relationships and institutional knowledge.    
• Increased commitment: Employees invested in their long-term career with your company are often more committed and motivated.    
• Enhanced company culture: Permanent employees contribute to a strong company culture and build team cohesion.
• Professional development: Investing in the development of permanent employees can lead to significant returns in terms of productivity, innovation, and engagement.
• Specialized training: Companies feel more secure investing in the training of a permanent employee.

Related: Benefits of working with a recruiter to find your next candidate

How to choose the right option

Ask yourself these questions to help you consider key factors when deciding between a permanent and temporary employee:

• Business needs: Are you experiencing a temporary surge in workload, or do you need to fill a long-term position?
• Skill requirements: Do you need specialized skills for a short-term project, or do you need to build a team with long-term expertise?
• Company culture: Consider how each option will impact your company culture and team dynamics.
• Project length: Is this a short-term project, or an ongoing position?
• Budget: Evaluate the costs associated with both options, including salaries, benefits, and agency fees. Use tools like our salary guides to help you benchmark what you’re paying for roles in your industry and ensure you’re competitive and make strategic savings where possible.

Curious about salary ranges for permanent and temporary roles across various industries? Download our salary guides to craft competitive offers.

What about temp to perm hiring?

Temp to perm hiring is a work arrangement that starts as a temporary employee with the intention of transitioning to a permanent position after some time. There are several reasons why businesses might opt for a temp to perm hire, including:

• Expectant budget: Your organization may not have the funds to hire a permanent employee right now, but circumstances could be different after several months. Temp to perm hiring allows you to get the professionals you need and transition to a perm role when you have the budget to make it happen.
• Skill development: Temp employment gives professionals the opportunity to learn about your team’s processes, tools, and systems, positioning them for a smoother permanent transition.
• Evaluate the fit: Temporary contracts typically have a set end date. Before that time, employees and employers can determine whether they are well suited for each other before committing to a more permanent relationship.

How to approach temp to perm hiring

While a recruitment agency can help you navigate this process, the following practices can guide your efforts:

• Be transparent: Transparency is paramount at every step of the hiring process and on. State your plans in your job ads, in interviews, and at the offer stage to ensure everyone is on the same page.  
• Avoid overpromising: While your goal is to make a permanent hire at some point, you can’t guarantee that will happen. Instead of promising to extend a permanent contract, share factors that will determine this outcome, including budget, performance, and restructuring.  
• Maintain communication: Once you’ve hired your temp employee, check in with them periodically about your arrangement and intentions. Discuss how they are meeting your expectations and welcome their questions and feedback. Keeping them in the conversation will help ease any doubts and allow for necessary adjustments.

How Michael Page can help you hire temp employees or perm employees

Whether you need temporary or permanent employees, Michael Page recruitment solutions can provide valuable support.

• Extensive network: Michael Page has a vast network of qualified candidates across various industries and skill sets. Partnering with us grants you access to top talent for your open roles.
• Expertise and guidance: Our experienced consultants provide expert hiring advice to help you build effective workforce strategies.
• Tailored solutions: We offer tailored recruitment solutions to meet your specific needs, whether you need a single temporary employee or a team of permanent professionals.
• Temporary employee staffing: Michael Page quickly sources and places qualified temporary employees for short-term projects or to cover leave, providing candidate shortlists in just 1 day.
• Permanent recruitment: We help you find and attract top talent for permanent positions, ensuring a strong fit for your company culture and long-term goals, providing a shortlist of qualified candidates in just 3 days.
• Industry specialization: Michael Page consultants are specialized in various industries, allowing them to provide in-depth knowledge of your market. Explore the industries we specialize in.   
• Compliance: Michael Page ensures that all hiring practices are compliant with relevant employment laws and regulations. 

Ready to hire?

With Michael Page, you can streamline your hiring process and make informed decisions about your workforce, ultimately contributing to your business's success. Upload a job description or request a call from one of our expert recruiters to get started.

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