A business may hire temporary workers (temps) for many reasons. Most of the time, temps are hired to fill positions based on a short-term workload increase, whether it's seasonal business, unexpected orders/deadlines, or some project that isn't part of normal operations. A temp may be hired to fill in for an employee on sick leave or to fill a vacant position when someone has left the company and their intended replacement requires some time before coming aboard. In the best cases, temps can become valuable, permanent team members.

As you test the temp waters, it's important to keep some key points in mind.

Understand the associated costs

You should calculate the costs of hiring a temp before making a final decision. While costs will vary depending on the source of your worker(s), temp agencies generally calculate their fees based on the worker's hourly rate.

According to CostHelper, "The typical fee for employers using a temp agency is 12-50% of the employee's hourly rate. For example, if an employee earns $10 per hour from the temp agency, and the agency's markup is 50%, the employer will pay an extra $5 per hour to the temp agency for a total of $15 per hour."1

The costs are likely to vary based on the worker's skill set and the position for which they're hired. Be sure to explore your options and check with different agencies before hiring someone.

Explore temp agency options

Both national and local temp agencies have equal potential when it comes to providing the right candidate. It's simply a matter of where that candidate applied when they decided to look into becoming a temp. Check with multiple agencies before making any decisions.

Mie-Yun Lee at Entrepreneur notes that firms screen candidates differently: "Some firms use computer testing to evaluate candidates, while others supplement this with psychological evaluations or personal interviews to select temps for the right jobs. If you need a temp with specific skills, computer matches are usually adequate, but personal interviews can help ensure that workers are better suited for your needs."2

Hire as if they were permanent

While you're probably not looking for a permanent worker when you turn to a temp agency, it's still smart to hire a temp as if you were looking for a long-term team member. This will ensure that you're holding the worker to a high standard, and the work will ideally be a reflection of that. Hiring a quality candidate may also lead to an unforeseen opportunity to have a great worker in-house, should a permanent position open up. If you consider this to be a possibility in the beginning, be sure to make that clear to the temp. This can provide proper motivation for them to perform well.

When you hire, make sure the person is qualified for the position and that you train them well. However, if you have no intention of ever bringing them on for a permanent role, don't over-train them because this can lead to wasted hours/dollars. Be clear about your expectations of the worker, and team them with appropriate staff to set them up for success. Introduce them around the office so they feel like they're part of the team and feel comfortable interacting with other team members.

Get the paperwork right

Be sure to have all the proper paperwork taken care of. Keep records for each temporary employee and have signed offer letters on hand.3 Lay out all the details so that there is no confusion on what is being offered and what is expected. Keep documented reviews in case you end up having a disgruntled temp who was a low achiever.

Make sure temps are properly classified under wage and hour laws. Temp workers are subject to the same tax withholding rules as anyone else. Also note that all workplace protections apply to temps. If you have any questions about this, be sure to read this SBA article4 on the subject. Provide a non-disclosure agreement if the temp will have access to any sensitive information.

Temps can be the right people to hire in certain situations, and the option should not be overlooked if you have work that needs to be done and isn't expected to last in the long-term. It helps to understand the basics of what this will entail before you start the hiring process.

 

1. http://personalfinance.costhelper.com/temp-agencies.html

2. https://www.entrepreneur.com/article/59650

3. http://quickbooks.intuit.com/r/employees/tips-for-working-with-temps-and-temp-agencies/ 

4. https://www.sba.gov/blogs/5-things-know-now-about-hiring-temporary-or-seasonal-workers

 

The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice. Any views expressed in this article may not necessarily be those of Nevada State Bank, a division of ZB, N.A. Member FDIC