When Is It Time for Temps?

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With the nation is an economic logjam and firms skittish to make a commitment to full-time employees, temporary and contract workers are an attractive option for firms of all sizes.

There are also many options when it comes to temporary worker skill sets. A small firm today can bolster its staff with a two-week receptionist or a six-month chief financial officer.

“The staffing industry employs people across all industries and all levels from scientific professions to C-suite executives and blue collar workers,” says Richard Wahlquist, president and CEO of the American Staffing Association in Alexandria, Va. “Small firms often don’t consider tapping into staffing agencies but they could bring someone in to develop a new business plan or help with accounting. Those much-needed skills sets might be at a higher level than a small business could justify putting on a payroll on a permanent basis.”

Jennifer Folsom, the director of staffing firm Momentum with offices in Richmond, Va., and Washington, has seen her company undergo a major growth this year because the demand for non-salaried workers is so high. Momentum, which was founded with the idea to place professionals in more flexible positions in order to achieve a better work-life balance, started out two years ago with the idea they’d place workers with 50% contract placement and 50% permanent placement. In 2009, it’s been 95% contract, says Folsom.

MindFarm CEO Andrea Fuller also has seen her two-year-old business skyrocket during the recession. She places high-level professionals who are looking for short-term, flexible arrangements. Her firm also has seen revenues jump – 130% more than this time last year. She attributes that partly to the great demand for workforce flexibility.

The temp arrangement can work out on “both sides of the equation,” she says, referring to benefits to both workers and a workplace.

By tapping into the talents of a staffing firm, small businesses could be doing themselves a favor, says Wahlquist. “Hiring and recruiting generally are not core competencies of small business owners. They are in the business of providing goods and services, not hiring.”

Here are some staffing tips:

Try Before You Buy. Folsom says the temporary arrangement can give someone out of work a chance to try out a job while an employer can see if it’s a right fit for them. As Folsom says: “If you get stuck with a mediocre full-time employee, it’s tough to get rid of them.”


Fluctuating Workflow. It’s also a big benefit for small firms that have a seasonal or fluctuating workflow like those who do contract work. “Very few businesses have a demand cycle that is static, says Wahlquist. “There are periods of time when sales pick up and then tick down and to try and staff at a median level and fill in the upticks with temp workers makes sense.”

Keep Expenses Variable. Every business owner is anxiously waiting or predicting when the recession will be over. “A business must try to keep its expenses as variable as possible because it’s uncertain when the recovery is going to occur and to determine how sustainable it’s going to be in an upturn,” says Wahlquist. “The last thing a business wants to do is hire full-time workers for short-term needs at the first sign of an economic tail wind.”

Personality Match. Personality match matters just as much as skills match, according to Fuller, who adds “especially in a small business” where everyone works together on multiple projects. “A worker in a small business is not buried in an organization and even a temp needs to be able to hit the ground running and make an impact immediately,” she says. She recently placed a short-term human resources director at a firm while the current HR lead was on maternity leave. The short-timer also found a different role at that term when her assignment was up because she was so well liked there.

Insource. A business has the choice to outsource work to another firm or “insource” by hiring a temporary worker and bringing that person in-house to work as a temporary contract marketing department, for example.

Document Systems. But a problem Folsom has seen micro-firms run into stems from the lack of well-documented systems. Employees at the smallest firms may be responsible for multiple company roles like accountant and CEO. Additionally, a lot of the knowledge of how to run the business is passed on verbally without adequate documentation. Lack of documenting procedures can make it extremely hard for a temp worker of any level to jump into the business and be effective right away.

Folsom recommends that a firm document its most important systems. Additionally, she says if it looks like it might need someone temporarily in about a month, hire that person for a few hours now and get them trained so that they’re prepared as soon as they walk in the door at a later date.

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