Temporary/Contract Employment Vs Permanent

When there is a positive change to your business, one often has to look at hiring additional staff. If you are like most business owners, you would rather contribute to furthering your own business far more than spending a lot of time and energy on hunting for the right people to join you.

Spending hours placing ads on the Internet or in newspapers, screening 100’s of CV’s and applications, interviewing candidates, having to make the hiring decision (which sometimes doesn’t work out), and then going through the new employee “negotiations” may not be how you want to spend your time. Some small business owners aren’t comfortable doing these tasks because they question their “human resource” expertise.

One alternative to adding permanent staff is to hire someone on a temporary or contingent basis. To help you make the basic temporary vs. permanent decision, we have put together some pointers below.

Why Hire A Temp?

  • Do you need someone full-time or part-time?
  • Is the job seasonal?
  • Do you know when you will no longer need this extra help?
  • Is this need caused by a special project that has an end date?
  • Do you need someone with specialised skills that you won’t need or can’t afford once the project is completed?
  • Is this an emergency caused by someone who is absent unexpectedly and is planning to return?
  • Is the return date certain or uncertain?
  • Is someone going on maternity leave?

Temp Option

  • Temp agencies will use either their applicant database or recruiting skills to find a number of qualified applicants almost immediately — that’s their business.
  • Temp agencies are skilled at screening and selecting people.
  • There is no recruiting expense to the hiring company.
  • Most temp agencies will have a process in place that allows the hiring company to “convert” the temp to a “perm” (permanent) for an up-front negotiated fee or by keeping the temp for a specified period of time through the agency, after which the hiring company may convert them to a regular or permanent hire.
  • If the person selected isn’t working out, he/she can be replaced quickly by the temp agency
  • Temps from LA Intronet receive all the same benefits a permanent employee would receive, such as leave, sick leave and paid public holidays.
  • LA Intronet Temps will obviously not be included in your Pension Scheme unless they become permanent members of staff.
  • The LA Intronet compensation structure includes payment for Public Holidays, Annual Leave, Sick Leave and Family responsibility leave, as per the Basic Conditions of Employment Act (BCEA). We also cover all the statutory costs including Workman’s Compensation and Unemployment Insurance, Skills Development Levies etc.
  • The service fee LA Intronet charges includes management of the payroll, ensuring effective labour relations and cash flow management.

Temp vs. Permanent Cost Example

(% added to Cost included in charge to client)

Information you need from Temp Agencies before you do business with them

  • How long have you been in business and can you give me contact information for three current customers?
  • How do you test prospective hires? What is your selection process? Do you do criminal checks?
  • How quickly will you have people for me to interview?
  • How do you monitor and maintain the quality of your temps? Do you visit them on-site and check for understanding of what they are doing?
  • May I see proof of good standing with SARS for statutory deductions for all temps?
  • If I am not satisfied with your services and let you know, what happens?
  • You should also carefully review a copy of the agreement that will be signed by you and the temp agency that details in legal language the relationship parameters of your business interaction. Make sure that document agrees with the information you garnered by asking the questions noted above.

Integrating a New Temp Hire into Your Work Place

Assuming you agree to do business with a temp agency and hire someone on a contingent basis through them, you still need to integrate your temp employee into the flow of your business and your work environment. You might want to consider the following “punch list” when doing this temp employment orientation.

  • Show an interest in the temp hire by spending a few minutes with them and asking them basic questions about their work history, skills, knowledge and abilities.
  • Ask if she/he has any concerns about working for you or your company. Ask the temp what they liked or didn’t like about their last temp engagement.
  • Restate/tell the temp what their role will be and how his/her work fits into your business process. Tell the temp what you expect in terms of quality and quantity of work.
  • Take the temp around the office and introduce him/her to the rest of the team, publicly stating that he/she is a temp and briefly describing what he/she will be doing.
  • As soon as possible after the temp begins their work assignment, find something to praise/recognize him/her for and publicly do so – this will solidify the importance of the temp’s role with your employees and will establish a solid bond between you and the temp.
  • Ask the temp if he/she has any questions, etc

What If things start to go wrong?

  • Don’t delay.
  • Temps are still covered by the Basic Conditions of Employment Act and fall under Industry Bargaining Council Agreements. As such they have the same rights as any permanent employee and are still entitled to protection under the law for things like unfair dismissal etc.
  • It is very important that you communicate any problems to your LA Intronet Consultant. LA Intronet will manage the process entirely even if the case ends up with the CCMA.

If you found the information useful and would like a print version sent to you please email..