When you apply for jobs, you have the opportunity to choose between a temporary and a permanent role. Which is the best choice for you? When hiring employees for your business, what is the difference between hiring temporary or permanent employees? Which is right for your industry and your business? In this article, we look at the pros and cons of each option for employees and employers.
What is a permanent employee?
A permanent employee fills a position in which he/she is a part or full time salaried worker with no predetermined ending date for the post. The position involves a contract that defines the number of hours of work.
What is a temporary employee?
A temporary employee has a position for a designated amount of time. It can last a few days, a few weeks, several months or a season. At the end of the contract, an employee may reenter the job market and pursue another position or the employer may offer an extension or a permanent job. This type of position is sometimes referred to as freelance or contract work.
Permanent employment
Pros of permanent employment for workers:
- Financial security and job stability
- Ease of budgeting
- Reduced stress levels, peace of mind
- Possibility of advancing career and optimizing earnings
- Free of constant need to find another temporary assignment as soon as one finishes
- Often includes health insurance, dental insurance, retirement fund, paid time off and other perks
- Integration with a team/social benefits
- Long term financial planning possible (ie: investing in a house or car)
- Allows you to leverage your work experience or connections in the industry
- Tax is deducted at source, no need to set money aside to pay a tax bill
Cons of permanent employment for workers:
- Boredom, the feeling of needing a change, feeling stuck in a routine
- May feel the need to work long hours leading to burnout and an unhealthy work-life balance
- Little freedom to decide your schedule
- Restrains exploring other fields and gaining broad knowledge and skills
- Lack of variety (performing the same role, in the same office, with the same people, day in and day out)
- Feeling trapped (more difficult to walk away from permanent, secure employment both psychologically and contractually)
Pros of permanent employees for employers:
- Reduced stress levels for candidates
- Possibly enhancing the performance of workers
- Motivation for workers to perform at their best to advance their career within your company
- Higher rates of productivity
- Consistency to cope with necessary workloads
- A stronger level of employee loyalty
- Greater employee focus
- Having employees that you trust and can rely on when you need them
- Can delegate tasks permanently which frees up your time to do the jobs that are important to you
- No need to continually train new staff
- Have time to fully induct staff into your business, helping them understand the company at large and their role within it
- The chance to build a tight-knit team
Cons of permanent employees for employers:
- Additional costs (benefits, training, resources, office space, etc.)
- Extensive hiring and firing process (additional paperwork and time)
- You’re responsible for your employees’ training and professional licensing requirements
- Over time, you may find your permanent staff become disengaged
- The recruitment process is costly with no guarantee that you’ll find the right person
- Recruitment mistakes happen and may not be uncovered quickly
Temporary Employment
Pros of temporary employment for workers:
- Helps you acquire a new set of skills and knowledge
- Can build a professional network by working a series of temporary roles
- Good for those who prefer the small-time commitment that comes with a temporary job
- Helpful for those experiencing extended unemployment
- Ensure that you continue to earn money during your search for a permanent position
- Avoid unnecessary resume gaps
- Demonstrate your hardworking and committed nature
- Provide relevant experience before applying for a permanent job
- Gain experience and make professional connections in an industry
- Offers greater flexibility (escape the permanent 9-5 lifestyle)
- Can detach yourself from office politics and focus on the job at hand
- It may be used as a short-term test for both you and the employer
- Can be an ideal option for students or parents
- Good choice for after a long absence away from employment or for graduates looking to gain experience
- Allows you to test industries and professions when unsure about what you want to do with your career
- Contractors/freelancers often decide when they work and when they don’t
Cons of temporary employment for workers:
- Lack of financial stability
- Difficulty budgeting
- Long term financial planning difficult
- No opportunity for career advancement
- No benefits (no health insurance, dental insurance, retirement fund, paid time off and other perks)
- Contract often too short for development of social contact with co-workers
- Possibly increased stress levels
- Often responsible for managing your tax affairs
- Lack of security (contract can be suddenly severed)
Pros of temporary employees for employers:
Provide special skills for your company’s short-term needs
- Great for short term projects
- Staffing agencies often manage payroll taxes for temporary employees
- A good relationship can be developed with the candidate for future staffing opportunities
- Can test out the candidate’s potential to perform various roles and responsibilities before making a long-term commitment
- Temporary employees are often excited to be working
- Temporary employees often work hard as they’re attempting to garner a permanent contract
- Cost-effective way to employ workers
- Flexibility to adjust staffing levels at short notice to suit business needs
- Tapping into different age demographics (seniors, students)
- Best choice when you’re seeking expansion of hours (evenings, weekends)
- If a temporary employee is not a good match, you don’t hire them again
Cons of temporary employees for employers:
- Temporary workers may cut corners and take shortcuts
- No relationship with temporary staff hence no loyalty from them
- Costly and time-consuming training can be required for only a short time of employment
- End date of the employment period may fall during a busy time when extra assistance is needed
- Employee may leave for a full-time position or higher-paid opportunity
- Employee time and energy may not be solely dedicated to your projects as employees may also work for other employers
- Some temporary workers may not have the right technical skills
- Temporary workers can, and do, move frequently from job to job
Why use a staffing agency for finding temporary work placement and/or hiring temporary employees?
A staffing agency serves as a facilitator between temporary employees and organizations that need short-term help. They help workers to secure more consistent short-term roles and assist employers in quickly filling temporary positions. They can save workers and employers time and effort.
Why use a staffing agency for finding permanent work placement and/or for hiring permanent employees?
To hire the best talent you need the help of a recruiter/agency. Staffing agencies give you access to the best candidates, save you time and money, provide industry expertise and enable business growth and innovation. They help you reduce turnover and can quickly fill multiple positions. They have a vast network of candidates and connections, are adaptable and often handle onboarding procedures. For those seeking work, staffing agencies are generally free of charge for candidates, providing expert help finding a position. They have an excellent knowledge of the labour market, know which sectors and companies have opportunities and can quickly get you in contact with interesting clients and projects. Agencies are first to hear about profiles that are needed and often provide assistance for candidates from intake interviews to salary negotiations.
Is it better to seek temporary or permanent employment? Is it more advantageous to hire permanent or temporary employees? The best choice is the one that works for the individual job seeker or the individual business. Be aware of the pros and cons of each choice so that you can make an informed decision about what best suits you/your business. Need extra assistance? Consider using a staffing agency for help finding a position (permanent or temporary) or support finding employees (permanent or temporary).