What Is Temporary Staffing?

All businesses want some degree of flexibility in their staffing policies and decisions, and this has become fully possible with temporary staffing. The market, valued at around $90 billion in 2021, is poised for fast growth at a CAGR of 9%+, making it a $130+ billion industry by 2030.

These figures suggest the steadily growing demand for temporary workers in various business sectors worldwide. So, it’s evident that the trend is here to stay, and as a business owner, you should take a closer look at its benefits and implications. Here is a definitive guide to temporary staffing to streamline your hiring practices in 2024 and beyond.

Introduction to Temporary Staffing

What is temporary staffing? Put simply, it is a hiring arrangement that presupposes the recruitment of skilled candidates on a contractual or temporary basis, that is, for a predetermined period. These contracts may be:

• Fixed-term
• Project-related
• Task-based
• Seasonal and casual work
• Day labor

Therefore, the meaning of temporary staffing is in the company’s ability to address its staffing needs dynamically. This non-standard mode of hiring comes with minimal legal obligations on the part of the employer, so the contract can be easily terminated after a pre-specified period. When you decide to use this approach in hiring, you can do it directly or with the help of a qualified temporary staffing company.

Permanent vs. Temporary Staffing Services

The differences between permanent and temporary staffing mainly rest within three legal domains:

• Employer. Permanent employees are officially hired by the company and registered on its payroll. So, the employer bears full responsibility for the whole scope of benefits, taxes, and pension arrangements for its in-house team. Temp workers are usually hired by a third-party staffing agency or have a contractual arrangement with the employer, which typically doesn’t cover social benefits or health insurance.
• Taxation. The employer fully covers taxes on the part of their permanent employees. This is done by the company’s accounting department, so employees rarely need to do that on their own. Temporary and seasonal workers usually bear the responsibility for independent tax filing.
• Social benefits. Permanent staff are automatically eligible for the full range of benefits an employer is legally obliged to cover for them in addition to the plain pay rate they receive on a monthly basis.

As for the rest, there is basically no difference in permanent and temporary staff rights in the workplace. Both categories of employees have the right to sick leave, allowance, fair and safe working conditions, and equal pay.

How Do You Know You Need Temporary IT Staff? Industry Guide

The pace of digitalization is quick in all industries today, from banking to customer service and commerce. Therefore, many companies look into hiring temporary IT staff to cover their short-term transitional needs and establish their online presence. Here are a couple of industry examples illustrating the trend:

• SMEs use temp staffing in the IT sphere to get access to niche skills and subject matter experts. This way, they can establish and automate critical processes in their business IT infrastructure without the costly engagement of permanent IT departments.
• Web development and web design companies heavily rely on temp IT staff to meet deadlines and rapidly intervene when something goes wrong on a project. They use a wide variety of skill-specific staff, from cybersecurity experts to QA and business analysts, to get their projects back on track and spot critical vulnerabilities.
• The financial business sector is rapidly evolving and digitizing, with many brick-and-mortar institutions going online to satisfy the needs of tech-savvy users. Thus, banks and financial organizations set up their digital architectures, mainly with the help of contractual experts.
• Tech infrastructure updates and daily administration. All business sectors, without exception, require regular updates, administration of their digital resources, and 24/7 omnichannel customer service. These needs are often fulfilled by temp IT staff that set and automate all procedures, train in-house staff, and provide troubleshooting and consulting services on demand.

Temporary Staffing as an Emerging IT Trend

Temp staffing is a notable new trend in the IT sector, mainly because it addresses the key concerns of IT businesses like:

• Managing staff shortages during peak seasons or demanding projects
• Timely replacement of team members on leave
• Completion of skill-specific tasks requiring no full-time engagement

This way, the temporary staffing solution can become any IT business’s magic wand for boosting growth and addressing downtime, project delays, or uneven tech talent engagement.

Notably, temp staff can also open new paths to tech innovation, as the company can experiment with new technologies or get a skill-specific team member on board to complete tasks requiring a unique tech stack its in-house team lacks. This way, IT businesses are no longer limited by in-house talent pools in terms of web development, design, cybersecurity, and other aspects, as they can always find suitable technical skills for temporary engagement.

It’s vital to note that temporary employment, though initially viewed as a side hustle by many IT experts, has become a path to permanent hiring. Many IT companies hire temp workers for project-based tasks to fill in the temporary staffing gaps. However, as soon as they see a worker is talented and enthusiastic enough to contribute even more to their success, they can offer a longer contract. That’s why more and more IT specialists are seriously considering temporary vacancies, as it may become their window or opportunity in a top tech company.

Legal Considerations of the Temporary Staffing Model

Though temp staffing looks like a safer legal arrangement for the employer, there are still some legal implications in every jurisdiction. Look at the following examples:

• The USA. Under US laws, temp staff employment contracts are governed by the Fair Labor Standards Act (FLSA) and the Occupational Safety and Health Act (OSHA). Employees are also protected from discrimination under the Equal Employment Opportunity Commission (EEOC). Though their contracts rarely cover health insurance, paid leave, and retirement provisions, their pay terms and working conditions should be identical to permanent staff performing the same functions. In some situations, the employer and the staffing agency can enter into a co-employment contract to distribute the roles and responsibilities; in such situations, employee misclassification is a serious legal problem. Besides, American companies are obliged to cover health insurance for employees involved in more than 30 hours of work per week, provided they employ 50+ staff.
• Europe. The EU’s Temporary Agency Work Directive also sets a legally binding requirement for the employer to guarantee equal pay and work terms for temporary and permanent staff. European businesses’ contracts with temp staff should include all details of work required from them, the contract’s duration, and conditions or date of contract termination. Unlike the USA, European temporary workers are entitled to the same social benefits as permanent staff and can also participate in collective bargaining.

As you can see, there is a complex legal framework in any jurisdiction. To avoid all these issues, we recommend partnering with a temp agency as your reliable and legally competent provider of temporary staff. The cost-benefit ratio of such a decision definitely works in your favor because you receive:

• Quick access to qualified staff.
• Coverage of training costs on the agency’s part.
• Quick resource gap filling for the avoidance of business downtime.
• Convenience of addressing all staffing needs without time losses.

A competent IT staffing agency typically has a vast database of categorized and pre-screened candidates for all sorts of tasks and projects. Therefore, they can address your staffing needs really fast without guesswork or first-best candidate selection.

Pros of Temporary Staffing

While some job seekers are suspicious of the temporary staffing contracts they encounter in the labor market, in fact, this arrangement comes with many benefits for both the employer and the employee. A worker may find such a hiring model useful if they:

• Plan to work only for a short period of time.
• Want to try their hand in multiple industries before setting on one position.
• Combine work for several employers at the same time on a contractual basis.
• Combine work with education and can’t commit to a specific job position on a full-time basis.
• Enjoy flexibility in the renegotiation of working conditions.
• Learn from the companies of their dreams even if the employer doesn’t offer full-time vacancies.

As for the employers, their advantages are also indisputable.

Cost Savings

Hiring a new employee is a slow and costly process regardless of the business type and industry. You need to go through all the circles of administrative and legal arrangements, from job vacancy formulation and candidate screening to a job offer and contract negotiation, hiring, and onboarding.
Once the employee is on your team, the next round of expenditures includes payroll, taxes, equipment and office space, paid leave, social benefits, and pension. None of this happens if you use temporary staffing services.

Lower Legal Risks

Full-time contract termination is not as easy as it might seem. Businesses have to go through all circles of hell to prove they have all legal grounds to end a working relationship with an employee, while in some cases, they will also be obliged to pay considerable compensation. That’s why many businesses employ staff only on a short-term contract basis today to avoid these legal problems and reduce their workforce-related risks.

Seasonal Staffing

Many businesses have seasonal workloads, from hospitality and tourism to e-commerce brands. IT companies may also experience a seasonal shortage of qualified staff, such as during the tax season, which is a period of heightened demand for tax accounts. Various project stages may also be likened to seasonality in the IT industry, with various project stages requiring different skills and varied numbers of experts on board. Thus, by partnering with a temporary staffing agency, you may anticipate these gaps and close them on time to avoid process disruptions and delays.

Better Employee Leave Management

If one of your IT experts is planning a vacation or breaks their leg, you may face a critical disruption of important work processes while waiting for them to return. Temp staffing can become your viable alternative in such cases, closing your staffing gap pretty quickly and ensuring the absence of downtime or pauses in mission-critical business processes.

Project Work

The IT industry is heavily project-based, which means that staffing needs may fluctuate widely throughout the project’s life cycle. For instance, at the beginning of project development, you might need fewer developers but a greater engagement of UI/UX designers and artists. As the project progresses, the UI/UX sphere requires only minimal support and oversight while the number of front-end and back-end developers engaged in active work rapidly grows. At the end of the project, you will definitely need a QA testing team, which steps in only at the final project stages.
This way, as you can see, the workload changes dynamically day by day. As a rule, IT companies solve this issue by launching several projects at various moments so that there is always an early-stage, mid-stage, and late-stage task in the process. Yet, a small firm or a company dealing with IT only indirectly can’t attain such dynamic staff engagement, and temporary staffing resolves the uneven workload issues well.

No Impact on Headcount

Full-time in-house team headcount has serious implications for your company’s taxation, record-keeping, and other financial and legal aspects. Running a company of 5-10 employees is pretty different from having 50+ staff on board, as each country has various legal requirements for businesses of different sizes.

That’s why you may keep your official staff number lower by hiring temporary workers. These arrangements are sure to reflect in your taxes and filing requirements, and while you will still have all your staffing needs addressed, you need additional resources.

Easier Contract Termination

Ending a contractual relationship with a full-time employee is a real headache. Labor laws in most Western countries are designed in a way that protects employees from discrimination and unfair treatment, so the burden of proof of incompetency and other reasons for firing lies on the employer.
In the overwhelming majority of cases, the business owner has to cover many additional costs of employee resignation, let alone protected populations whose firing is often made technically and legally impossible. So, temporary staffing solutions are ideal for employers reluctant to enter this slippery slope with non-critical full-time staff.

How to Manage and Incorporate Temporary IT Staff? Tips for HR Managers

Integrating temp employees into the in-house team structure may be challenging for an HR specialist. Yet, this task is of critical importance, as poorly onboarded and non-integrated employees are usually demotivated and not engaged. Thus, it’s in the best interest of your company to develop a standard procedure for temp staff incorporation. The following steps can streamline the procedure and make it efficient.

1. Select only properly qualified, resourceful, and experienced temp employees with strong communication skills to ensure they match your team and integrate well.
2. Clarify all job responsibilities and parameters during the screening and interviewing process to guarantee you’re on the same page regarding the nature of the job.
3. Sign a confidentiality agreement with all temp workers to keep your business data protected.
4. Conduct background checks of all temp staff entering your workforce to keep business assets secure.
5. Assign a person in the company to manage unemployment claims and other issues on the part of temp staff. It’s vital to give competent and timely legal responses to all claims so that your business avoids greater legal troubles.