1st Commercial Credit

Learn About Funding and Supply Chain Finance Solutions, Business Tips, and Industry Related Articles.

Over 18 Years in Business

Recent Transactions

invoice factoring for a po funding valve importer from china for inventory, freight and duty fees


Valve Importer PO funding

invoice factoring for a invoice factoring for start up temp staffing company with 1 client


Start Up Staffing Agency

The True Cost of Temp Staffing vs Regular Employees

There are many schools of thought when it comes to temporary staffing versus regular employees. When the idea of bring in temp workers to help in a seasonal rush or to enhance the current workforce during a busy period is mentioned, many company managers and owners bristle at the idea. The common thinking about temp agencies and their workers is that the costs are too high to justify the work being done. But it may not be as simple as a matter of basic productivity.

The financial website AllBusiness.com puts the cost of temporary workers into a perspective that is easy to understand. A temporary agency provides labor to a company for a flat rate, but that rate includes the overhead costs of the temporary agency as well as any employee costs that go along with hiring a workforce. It can sound like it is cost prohibitive, but the other side of the story may show a different perspective.

Even if a manufacturer keeps a list of potential part-time employees that it can hire during the busy times of the year, there is no guarantee that every person on that list will dutifully report for work. Part-time employees that find full-time work with other companies are no longer options for the busy time of year. Now the manufacturing company has to go through the recruiting process again and find replacements for the people on the list that are no longer available. The manufacturer's labor costs go up with each part-time employee that it needs to recruit.

No matter how many times a part-time employee works for a company, there is always some kind of paperwork that needs to be filled out before work can begin. The more part-time employees there are, the more paperwork administration costs the manufacturing company will have to absorb.

There is also the productivity factor to consider as well. Many companies plan their busy times of the year out so that they can begin assembling their part-time staff before it is needed. What if the busy time happens earlier and lasts longer? What if the company experiences significant success and has another busy period that it was not expecting? The process of assembling a part-time work force must begin again at significant administrative cost to the manufacturer.

The new healthcare laws have made hiring employees, part-time and full-time, expensive and complicated. There are provisions that a company must make for every employee and steps the company must take to prove that certain employees do not qualify for health insurance. This just adds up to more administrative costs for the company.

An ongoing problem associated with part-time employees is turnover. The company will need to replace part-time employees who quit and there is a lapse in productivity when part-time employees do not show up for work and have to eventually be terminated.

A temp agency provides a work force that the agency is responsible for and at a flat rate. The company that utilizes a temp agency would get a workforce that is only there to produce results. Temp staffing is trained before they enter the facility and they are ready to go. The paperwork and turnover are the responsibility of the temp agency and not the company that hired the agency. In many ways, the true cost of temp staffing makes it an ideal solution over hiring part-time employees.