Permanent Placement vs. Temporary Turnover: Is Your Approach Strategically Sound?

Faced with the possibility of more downsizing, potential layoffs and an uncertain economy, many managers are reluctant to commit to permanent placements— preferring instead to stick to short-term solutions.

Recent research from the Association of Professional Staffing Companies (APSCo) shows that the trend of plugging the gaps with temporary staff has become particularly prominent in rebounding markets such as engineering, finance and accounting, where temporary placements significantly outpaced permanent hires through the first quarter of 2012. It seems obvious—after all, using temporary staff provides executives with some valuable strategic advantages:

  • Rapid Reduction In a fragile economy, businesses can’t be sure that a sudden spike in workload will weather the storm. In the event that downsizing becomes inevitable, a transient workforce is the quickest, easiest and most flexible way to cut costs. It also represents reduced risk—both attractive options to short-staffed HR departments.
  • Permanent Prospects In a strong economy, it’s a jobseeker’s market. Companies must move quickly to secure good candidates with an attractive permanent offer. But in a weak economy, employers find no shortage of highly qualified candidates prepared to compete for entry-level positions. Using temporary staff in this environment allows managers the luxury of extended try-outs, until you find the perfect person for the position.
  • Maintaining Morale The effects of a layoff are difficult and devastating. But while it’s always difficult to lose employees, confining the cuts to temporary staff is easier for employees to accept.

But while there’s no doubt the benefits of a flexible, temporary workforce are enticing, is it possible you’re damaging your division by deferring the decision to bring permanent staff onboard?

  • Accountability Permanent employees have accountability. They’re invested in the success of the organization, and understand what they could lose if they fail to perform at acceptable levels. But don’t assume that’s true for temporary workers too. If you aren’t committed to staff, you can’t expect them to be committed to the company.
  • Consistency It’s hard to teach temps to perform the same tasks with the same techniques. Training a constant influx of new staff is draining to the permanent workforce, and you might find your customers soon tire of the revolving door, let alone the slipping standards.
  • Reassuring—and Retaining—the Rest The main argument for using temps in a fragile economy is that they can be let go at any time. While this is a valid reason, the mindset won’t do much to reassure your remaining workers, who are still unsure if the downsizing is done. After a layoff, employees are watching management’s every move to determine if more cuts are on the horizon. Reluctance to commit to a permanent workforce could mean you lose skilled staff to whichever competitor is prepared to take that risk.

Ultimately, the decision to bring on permanent or temporary staff is very much a case-by-case decision. Company outsiders can’t tell you what to do—only you can decide what’s the best choice for your company, by weighing the organization’s internal operational needs and projected performance against the overall occupational outlook.

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Categories: Articles for Employers, Recruitment Strategy

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