It’s no secret that the economy is on a slippery downhill slope at the minute, with many businesses having to increase their prices to the detriment of the consumer – 4 in 10 companies increased their prices in 2022 to cope with the rising costs. One route potential financial demise leads a business down is the road of temporary staffing, a more tactical and flexible solution to hiring permanent staff. According to the study, three-quarters of employers said they were noticing an increase in the onboarding of temporary workers.
Below, we’ll look at the benefits of hiring temporary workers and why so many brands – not just London brands – are favouring hiring temporary workers over permanent staff.
Financial Commitment
Hiring permanent staff comes with long-term financial commitments, including salary, benefits, and taxes. They say that an employee will cost a business 1.5 to 1.75 times the amount of their actual salary. Businesses may be concerned about the financial burden of offering competitive salaries, paying for employee benefits such as healthcare and retirement plans, and covering payroll taxes, workers’ compensation, and unemployment insurance. These costs can add up, especially for small and medium-sized businesses with limited budgets that can impact their bottom line.
Not to mention, in some situations, it just makes sense. One example is hiring temporary staff for specific and short-term business needs. Companies like Event People – weareeventpeople.co.uk – have teams of trained staff to meet specific event needs for that day. Specific and temporary business needs warrant outsourcing to temporary staffing, especially trade events where you will want to impress potential and existing clients.
Legal and Regulatory Compliance
Employing permanent staff means complying with a complex web of labour laws and regulations, including wage and hour laws, anti-discrimination laws, workplace safety regulations, and more. Businesses may be worried about the legal and regulatory requirements associated with hiring permanent employees, as non-compliance can result in costly fines, penalties, and even lawsuits. Staying compliant with labour laws and regulations can be time-consuming and may require additional resources, which can be daunting for businesses.
Flexibility and Adaptability
In today’s fast-paced business environment, many companies require flexibility and adaptability to respond to changing market conditions. Hiring permanent staff may limit a business’s ability to scale up or down quickly, as they may face challenges with workforce planning and management. Companies may also worry about the difficulties of terminating permanent employees if they need to downsize or restructure their operations, as it can be legally and emotionally challenging.
Employee Turnover and Training Costs
Hiring permanent staff also entails the risk of employee turnover. If an employee leaves, businesses may have to invest time and resources in recruiting, hiring, and training a replacement. High turnover rates can disrupt productivity, increase costs, and affect morale. Businesses may be concerned about the potential loss of investment in training and development if employees leave shortly after being hired, which can be a significant deterrent to hiring permanent staff.
Market Volatility and Uncertainty
Economic fluctuations and market uncertainties can impact businesses’ decisions to hire permanent staff. During economic downturns or uncertain market conditions, companies may be hesitant to hire permanent employees due to concerns about revenue, profitability, and the long-term sustainability of their operations.
The fear of having to lay off permanent employees during tough times can weigh heavily on businesses and lead to cautious hiring practices. The pandemic is the perfect example of a period where companies had to handle market volatility – 28% of brands laid off workers.
Administrative Burden
Managing permanent employees requires time and effort to handle administrative tasks such as payroll, benefits administration, tax withholding, and compliance reporting. Businesses may be apprehensive about the administrative burden associated with hiring permanent staff, especially if they do not have dedicated HR or administrative personnel. Studies have shown that it costs an average of £3,000 simply to hire an employee.
The additional workload and complexities of managing permanent employees can be overwhelming for small businesses or those with limited administrative resources.
There are numerous benefits to hiring temporary staff over permanent workers. That’s not to say that temporary workers will take over the business workforce – there will always be a requirement for permanent workers who understand the inner workings of a brand. One downfall of temporary workers is the lack of familiarity with a company.
