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Should Employers Hire Permanent or Temp-to-Permanent Employees?

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Hiring new employees is an important decision for any company. Should you directly hire permanent staff or consider temporary-to-permanent arrangements? There are good arguments on both sides of this question. Evaluating your specific needs and priorities can help determine the better hiring strategy for your organisation.

What are the benefits of hiring permanent employees?

 

Building an experienced, consistent team

Permanent employees are likely to stay with your company longer than temporary workers. This allows you to build an experienced staff over time and reduce turnover costs associated with recruiting and training new employees. Employees who work together longer often become more cohesive and consistent in their work product.

Signalling a long-term investment in talent 

Bringing on permanent staff signals a strong, long-term investment in talent to both current and potential employees. This can help attract and retain workers who are seeking job security and career growth opportunities. When employees feel confident about job stability, they may be more loyal and motivated.

Avoiding temporary talent gaps 

If a temporary employee leaves at the end of their contract, it can open up a talent gap while you search for a replacement. Hiring permanent employees reduces instances of unexpected turnover, given the longer commitment.

 

What advantages could temp-to-permanent arrangements provide?

 

Extended evaluation of workers

A temp-to-permanent approach gives you a chance to thoroughly evaluate employees before transitioning them to permanent roles. The initial temporary contract serves as an extended working interview. This allows you to validate skills and assess cultural fit before making a permanent offer.

Increased hiring flexibility 

You can bring on temporary contractors to fill specific needs as they arise, without over-hiring permanent employees. Temporary workers can more easily cover fluctuating workloads or projects. If you eventually decide to convert strong temporary workers to permanent staff, you’ve built in added hiring flexibility.

Lower long-term risk 

While permanent employees expect a long-lasting commitment from employers, temporary arrangements have built-in end dates if the worker is ultimately not a good fit. If you decide a temporary employee will not transition well into a permanent role, you already have a planned exit strategy. The worker leaves when their contract ends.

How should employers evaluate their options?

Assess hiring urgency

Do you need to quickly fill roles, or is taking a slower approach to hire permanent staff a viable option? Temp-to-permanent arrangements can help you rapidly fill pressing needs for the short term.

Consider project or role needs

Are you looking to fill a temporary project demand or need to address a long-term, year-round business requirement? Your answer can indicate whether temporary or permanent hiring better aligns.

Evaluate cultural fit

Will this role shape or significantly influence company culture? If so, the long-term investment of a permanent employee who fits well may be worth prioritising over a short-term temporary fill.

 

The choice between hiring permanent versus temporary staff comes with many trade-offs to weigh. Assessing the pros and cons for your specific organisation can set your hiring processes up for greater success. With some careful evaluation of your team’s needs, you can determine the better staffing strategy.

 

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