With a breaking AI news story hitting almost every week this year, automation in the workplace is a ferociously white-hot topic. Business owners and organizational leaders are walking a tightrope right now, balancing the integration of modern technology and investing in a powerfully productive workforce. This guide will help you determine when temp agencies are worth it and when integrating a digital transformation solution makes more sense.
Many organizations rely on temp workers for any number of positions including data entry, seasonal labor, and administrative roles. There are also specialty staffing agencies that work with accounting professionals, IT experts, lawyers, and other positions that range in scope and expertise. These staffing industry trends show just how wide-ranging the use of temporary employees is.
While there’s nothing wrong with utilizing temporary labor to fill positions throughout your organization, it isn’t always the most efficient workflow to establish.
By understanding the staffing agency industry, you can better imagine how temporary employees might fold into your business model, while also starting to consider the development and integration of long-term strategies.
“Someone sits in the shade today because someone else planted a tree a long time ago.”
- Warren Buffet
Successful organizations rely on a combination of technological solutions and an expert workforce. One without the other is a disaster waiting to strike. Read Impact's eBook on Fast-Tracking Your Digital Transformation to familiarize yourself with some of the leading trends in the space.
The Different Types of Temporary Staff
Temporary workers can be an easy, simple, and fairly cost-effective solution to a short-term labor need within your organization. That’s partially why the market size of the staffing industry reached $218 billion in 2022.
With the size of the industry in mind, it’s important to clarify that most staffing agencies have a variety of workers in their candidate pools across industries, skill levels, and work priorities.
This should reiterate how vital it is to have a thorough understanding of your actual staffing/business needs before jumping into a contract or partnership with a temp agency. Knowing the scope of the role you’re looking to fill will direct you toward the right type of temporary employee.
The main candidate categories staffing agencies offer to clients often include seasonal and hourly employees, pure temp hires, temp-to-hire candidates, and specialists. Many staffing agencies can also facilitate direct full-time hires.
Hourly and Seasonal
There is a flurry of holidays at the end of the calendar year, and this always drums up an incredible amount of retail and shopping activity. If you’ve ever been out and about shopping the deals between November and December, you’re likely familiar with hourly and seasonal temporary employees.
In order to meet the seasonal increase in demand from shoppers, retailers need to hire additional employees. This also ensures that full-time employees don’t get overwhelmed by the increase in traffic.
Since employers know that this is a recurring seasonal trend, it’s easy and efficient for them to turn to staffing agencies to fulfill the increase in work demand during these high activity periods.
It’s worth noting here that business intelligence solutions can help you identify patterns and trends within your organization so you can take advantage of peaks and cut expenses during valleys.
Pure Temp/Contract
A pure temp position is one that has a specific start and end point. This can be in the form of a project, a specifically delegated volume of work, a timeline, or any other number of benchmarks predetermined by the employer.
The nature of a contract or purely temp position is extremely attractive to candidates seeking a bit more flexibility in their work week or want exposure to a variety of different roles and projects within an industry.
If you have a project or certain tasks with a very defined start and end point, pure temp workers might be a great solution to consider for your operational needs.
Temp-to-Hire
Temp-to-hire contracts are a bit more versatile than a pure temp position, or even contract work. These contracts involve what is essentially an employment trial period followed by an optional offer window.
In other words, the employer takes on a temporary worker with very low-risk, has a chance to see them perform, and after a certain duration (often 6 months) has the option to offer the candidate a full-time position within the company.
These contracts are great for employers who want to test out a candidate before bringing them on full-time and employees who are looking to break into an industry and really prove they’re worth their salt.
Specialists
Finally, many staffing agencies choose to serve a niche market of professionals. Rather than offering employers a wide breadth of non-specialized talent that is great for entry-level positions, these agencies help organizations find specialists to bring in at a mid to senior level in a consulting, freelance, or full-time capacity.
The compensation rate for filling these positions is much higher and these staffing agencies are much more focused on placing candidates with your organization who already have the expertise and technical skills needed to succeed in the role.
If you’re considering working with a specialty staffing agency, you might also want to consider partnering with a managed service provider (MSP). Where a specialty staffing agency can place a professional or two with your organization, an MSP delivers you a full team of industry experts ready to help you blow your business goals out of the water.
“If you knew how much work went into it, you wouldn't call it genius."
- Michel Angelo
Are Staffing Agencies Worth it? Pros and Cons to Consider
Like with anything in life, there are pros and cons to working with a staffing agency to supplement your workforce and labor needs. Whether or not working with a temp agency is going to be the right call for your organization will depend on the goal you’re trying to accomplish.
Certain business goals are aligned extremely well with the value of a temporary employee while others are much more achievable when pursued through a permanent solution, like AI-powered software.
Dynamic and Flexible Workforce
A huge benefit to working with a staffing agency and temporary employees is the flexibility that it provides both to the organization and to the employee. Temporary employees know they have flexibility. As such, this can be very agile work, great for people who like to travel or don’t necessarily need a consistent full-time income.
On the organizational side of things, the ability to assign one-off projects or mitigate a busy season workload without going through the process of vetting and hiring full-time employees can save you significant time and money.
Low Risk
Another reason so many organizations choose to utilize a temporary staff is because there’s such low risk involved. Most often, temporary employees are actually employed through the staffing agency, not the client of the staffing agency.
This means that any payroll tax deductions or contributions are managed by the staffing agency, not your organization – simplifying the entire payroll process. Although this protects the organization in a number of legal ways, employers are still expected to adhere to standard labor and employment laws.
Expensive Repeat Cost
On the other side of the coin, relying on temporary employees from a staffing agency can be an extremely expensive repeat cost.
This is especially the case in the instance that the first candidate doesn’t work out for any reason. If you have to go through the process of training a new temporary employee more than once, you might already be losing money on the process.
Temporary employees also become a high repeat cost if they’re continually relied on for repetitive tasks that don’t have a defined endpoint. Data entry, for instance, is a task that will likely exist within the organization far beyond the scope of any one temporary employee. Relying on temporary employees for these types of infinite but repetitive tasks can end up being a huge cost to the organization.
Inefficient Longterm Solution
In the same way that temporary staff becomes too high of a cost to justify with infinite but repetitive tasks that need to be done (like data entry); they are also an inefficient long-term solution.
Most temporary employees aren’t hired on with culture fit in mind, expertise in the industry, or technical skills.
So, are temp agencies worth it? It very much depends. Sometimes they are, and in some cases, it’s better to develop a more permanent solution.
Permanent Solutions to Consider
Temporary employees are like Band-Aids. They’re great for small cuts and scrapes, but when it comes to larger injuries, they just don’t bring enough to the table.
Seasonal demand spikes, one-off projects, and expert consultants are all well served by staffing agencies.
Meanwhile, ongoing tasks, positions involved in organizational growth, and roles contributing to long-term strategy are all much better served by a permanent solution like a full-time position or a digital integration solution.
Full-Time Position
As you define the scope of the projects and tasks you want a temporary employee to cover, it might start to become evident that a full-time employee would be a better fit.
The larger the scale and scope of the position, the more likely it is to be well suited for a full-time position within your organization.
A Solution Through Digital Transformation
After doing a deep dive into staffing agencies and temporary employees, you might still be coming away with the feeling that there simply has to be a better way to do this. If that’s the case, you might be truly looking for a digital transformation solution.
Going back to data entry, for instance; this is a task long outsourced to temporary entry-level employees. However, this comes with the up-charge involved with the staffing agency partnership, as well as other issues like inconsistency in performance, high turnover, and unreliable candidates.
In place of temporary staff to fulfill these tasks, high-performing organizations look to technology to provide automated solutions. Data entry is a perfect candidate for automation in your organization because it's repetitive, typically numbers-based, and a relatively low-value activity. The faster it can get done, especially through automation, the better it is for you.
Not only that, but automated data entry is also significantly more accurate than its manual counterpart making it a truly valuable workflow to consider integrating into your organization.
Finally, it’s a much lower cost over time beyond the upfront investment in development and integration. The video below has a few words from Impact’s own CEO, Frank Cucco, on establishing a culture of digital transformation.
