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Contingent or Direct: What’s the smartest way to add people in your SC company?

January 16th, 2014

Change will be the name of the game throughout 2014.

Declining unemployment, a slowly improving economy and implementation of the Affordable Care Act are just a few of the forces that will continue to fuel uncertainty. In light of these conditions, what are the right staffing strategies to help you control expenses, manage employment risks and still get your work done?

It’s a complex question, but choosing the best options for your business shouldn’t be. TRUE Group is here to help. Use the information below to evaluate your personnel needs and decide which type of worker you need – direct or contingent – when the demands of your workload outstrip the abilities of your core staff:

Advantages of Temporary and/or Contract Staff

Using contingent workers is a safe, cost-effective way to:

  • Prevent critical gaps in your staff due to vacations, illness or other unexpected absences.
  • Increase flexibility (which can also boost profitability) during seasonal upswings in demand or other types of workload fluctuations.
  • Access specialized resources for discrete projects.
  • Reduce the cost of health benefits and taxes as well as workers’ compensation insurance, overtime pay and vacation pay.
  • Save money in the recruiting and hiring process, including the cost of making a hiring mistake.
  • Improve focus and productivity of your direct employees, by offloading time-consuming or labor-intensive tasks.
  • Offer protection against an economic downturn or other market forces that could adversely impact your organization.
  • Easily remedy overwork and the burnout it causes in your core staff.

In addition, most staffing firms not only recruit qualified workers but also help companies screen and train these employees.

Advantages of Hiring Direct Staff

If you experience a significant (and likely permanent) upswing in business, direct hires may be the best solution. Full-time employees provide a number of advantages for your business, including:

More control. When you hire an employee, you get the advantage of being able to completely control and direct that individual’s work during work time, to train the person in the way you want the job done, to determine how and when work is performed, and to require that person to work only for you.

Stronger commitment and loyalty.  Full-time employees may be more loyal than independent contractors or temporary employees.  Loyalty can result in higher levels of productivity, though this is not a given.  To keep direct employees committed to you, create programs that recognize their accomplishments, provide opportunities for growth, and make employees feel valued and appreciated.

More versatile personnel. In smaller companies, employees will often perform a variety of job functions. They become jacks-of-all-trades, so to speak.  Having employees who can handle multiple roles to meet your company’s changing needs can be a huge advantage.

Clear lines of authority. With employees, both your managerial and legal obligations are clear.  With temporary or independent contractors, you must abide by “joint employer” rules and work to avoid employee misclassification issues.

Need more information to make the right choice for your company? Schedule a free workforce consultation with TRUE Group today. We’ll learn about your business, help you intelligently weigh your options and make the best staffing choices for your business.

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