Temporary workers are now an emerging corporate trend

By on June 12, 2014

Globalization has transformed the way businesses operate today. Growing competition and shrinking profit margins compel businesses in every industry to think out-of-the-box and find out new ways of conducting operations. The traditional workplaces with a large pool of permanent employees is slowly being replaced by blended workplaces which have a smaller but proportionate pool of traditional full-time workers, part-time workers, temporary workers, remote and contract workers (Graebel, 2013).

Big companies prefer part-time or temporary workers

The Times of India recently claimed consultants at major consultancy firms prefer to work in temporary work arrangements rather than committing themselves to the 15-18 hours full-time jobs. The report provided that leading consultancy firms like KPMG, McKinsey, The Boston Consulting Group, Bain and PwC are offering greater flexibility and consultants are also enjoying this flexibility. According to this report, the percentage of temporary workers in McKinsey has risen from 8% in 2012 to 10% in 2014 (TJinsite, 2014). The Economic Times reported in this regard that firms operating in the field of Information Technology (IT), IT-enabled services (ITeS) and retail sectors are more active in hiring temporary workers. The report also claimed that the global temporary staffing industry is worth $140 billion. As the reason behind an upsurge in temporary staff hiring, the report provides permanent hiring is at least 2 to 5 times more expensive as compared to the temporary hiring. This is why companies are cautiously hiring permanent employees (Sengupta, 2012). Research conducted by McKinsey (2012) points out the scenario in the US that over the last decade, contract employment has grown 4 times faster than total employment. The report also accentuates that even during the recession, while less-skilled temporary workers faced layoff; the hiring of highly skilled professionals on contract basis continued to grow (Lund et al., 2012).

Below are few companies and their temporary staff strength:

Company Name Temporary Worker Strength Net Addition (Feb-April 2012)
Team Lease 65000 5200
Randstad India 60000 3000
Manpower Services 30000 700
Adecco India 100500 1500
Kelly Services 5000 -4000

Temporary Staff Statistics

Source: Sengupta (2012).

Benefits of hiring part-time or temporary workers

As said earlier, part-time and temporary workers are hired by almost all industries today because of the benefits it offers. The main benefits include:

  1. Temporary workers can be occupied at lower cost of hiring both in terms of money as well as time. In most cases, such employees are occupied by professional employment agencies that specialize in providing temporary workers for different industries. Even when companies do not outsource the hiring, it is economical because such employees are hired for specific requirements. Hence it is easier and faster to find such individuals with only the specific skill (Schaefer, 2005).
  2. These employees help contemporary businesses to adjust immediately to internal and external environmental fluctuations. During the times of economic boom or the peak period in case of seasonal industries, for a special project, or the times when permanent employees are absent due to illness, pregnancy, vacation; or during the period when there has been a retirement or termination and the replacement is not done; at all such times temporary workers can be of great help to keep the firm moving (Schaefer, 2005).
  3. The employees hired as temporary worker provide good opportunity to the firm to evaluate their skills and potential in real business scenario. This is an excellent and economical way to get permanent employees who can perfectly meet the demands of the business. Hiring first as a temporary worker also enhances the scope to offer on-the-job training to prospective full-time employees (Schaefer, 2005).

Drawbacks of hiring part-time or temporary workers

As it is said, nothing comes without a cost; hiring temporary workers also have inherent drawbacks. The important ones are listed here:

  1. Although temporary workers are easily available with desired skills, yet it should not be concluded that they do not need any training. No matter how well an individual is trained; minimum training is always required to apply that skill to present organizational needs (Schaefer, 2005).
  2. Temporary workers should not be expected to feel engaged with the organization like permanent full-time employees do. This is because employee engagement requires mutual commitment both from the employer as well as employees. Caplan (2011) stated in this regard that employee engagement is a two-way interaction between employer and employee. Employee engagement can be achieved with employers’ providing job security and employees feeling committed towards organizational goals.
  3. Besides there are also fair chances of workplace conflicts as both temporary and permanent employees work together sharing the responsibilities. Though responsibilities are shared on same job, the temporary workers are often not entitled to any benefits other than compensation that permanent employees avail. Moreover, there might occur ego problems as well between temporary workers and permanent employees (Schaefer, 2005).

Why job doers are interested in working as part-time or temporary workers?

As reported by The Times of India, besides maintaining a perfect work-life balance, such flexible work arrangements help people continue their personal passions along with their job. Some want to study further while others may look for establishing their own business. Working as a part-time or temporary worker also offers enough scope to keep an eye on lucrative career growth options in other firms (TJinsite, 2014).  In addition to these, joining initially as temporary staff helps them to learn new skills and expertise and understand the complexities of the job. It also leads them to develop a professional network with employees of all those firms where one works as temporary employee and eventually in bright career prospects (Hannon, 2012).

Glimpse from the future

Considering the growing competition in the global marketplaces, frequently changing consumer demands; mounting focus on lowering overhead costs and improving market response times; it can be expected that this talent-on-demand model is going to gain momentous in the near future.