Should I hire a permanent or temporary employee? What should I consider?

Consider these factors:

Time

How much time do you have? How soon do you need someone to start? The length of a hiring ‘runway’ may be a key factor.

If you need to make a fast hiring decision, consider temporary or contract recruitment.

If you are taking on less long-term potential for risk and commitment through temporary and contract workers, the hiring process can become more efficient, while still maintaining its integrity through thorough background and skill checks.

Cost

Do you have budget for this role all year long and each year after that - or for a finite period of time?

If long-term budget is uncertain but there is an immediate need for skill/resources, a temporary employee may be the best option.

Short vs long term needs

Every hiring moment is an opportunity to transform. But what kind of transformation are you seeking, and when do you expect it to take place?

If the skill set required today could be different to next year, it might make sense to hire a temporary worker.

Commitment

Are you looking for a long-term commitment? Remember that commitment is tied directly to risk. If you offer a low commitment, you’ll get the same in return - and a higher risk that your temporary employee might leave.

Recruitment is also a two-way street. For both employee and employer, permanent employment is associated with a greater commitment related to time, finances and skills.

The benefits of hiring a temporary employee

Temporary workers are typically hired for short-term periods of weeks to months, but that doesn’t mean you don’t get to enjoy the benefits of high performing traits. 

One of the key benefits of hiring temporary staff is accessing an adaptable skill set. Your organisation can leverage the key skills and relevant experience a temporary employee brings, quickly.

Temporary staff are also generally available immediately. A quality recruiter will have already undertaken reference checks, background checks and even skills-testing for each temporary candidate, enabling you to make a fast decision and get them started swiftly.

Hiring a temporary team member does not require the same level of ongoing commitment as hiring a permanent employee. This mobility can be great for major project and organisations that need access to a flexible, dynamic and highly skilled workforce. 

Another key benefit is access to specialist skills that don’t currently exist in your team. Temporary staff are sought out in order to address the immediate needs of your organisation, so you can customise your workforce and available skill sets to suit your current needs.

Things to consider when hiring a temporary employee

Have you thought about how you will onboard and look after temporary staff?

Even if someone is only joining you for a short term, creating a positive and supported employee experience is important.

While the fast hiring and onboarding of a temporary employee can bring immediate benefits, hiring a temporary employee via a recruitment agency involves a recruitment costs.  The recruiter will charge you a margin on a per day or per hour basis, on top of the hourly rate that gets paid to the temp and the statutory oncosts.

A third option - fixed-term contract

Recruiting a new team member on a fixed-term contract is an ideal middle ground ie slightly more stability for the employee while still maintaining flexibility for you as the employer. 

The difference here is that a fixed-term contract has an agreed length and end date.

Just as in a permanent hiring solution, there exists a direct employment relationship between your organisation and the new employee, including statutory leave and superannuation - and an agreed notice period should either party want to terminate the contract early.

Fixed-term contracts are a great option for newly created roles, coverage of long-term leave and organisations funded on 2-5 year government funding cycles. 

What’s the difference between a temporary engagement and a fixed-term contract?

Employment relationship

Temporary workers are usually employed by the recruitment agency, which means the responsibility for candidate communication and payroll management lies with the agency. 

In most cases, contract employees are employed by the hiring organisation on a fixed-term basis and paid directly via your payroll.

Notice period

This is a big one, especially if flexibility is important for your business.

Notice can be as short as 24 hours for temporary employees, while it’s standard for a fixed-term contract to have a 2-4 week notice period.

Leave and benefits 

All workers in Australia, regardless of their employment status, must be paid superannuation.

Leave entitlements are a slightly different story. Temporary workers aren’t entitled to leave, whereas fixed-term contract employees are usually allowed a pro-rata leave entitlement.

Deciding whether to hire on a temporary or permanent basis is an important choice.

In considering your options, you might find it useful to read this article about temporary staff costs in Australia.