Temporary Hires: A quicker way to fill your jobs?

Struggling to recruit and considering Temporary Hires?

This week, we’ve spoken to a couple of employers struggling to recruit permanent staff (in different sectors). Both seek the right mix of skills and culture fit, but the process is taking longer than expected, putting pressure on their existing teams. They asked Grassroots about the pros and cons of temporary hires instead.

With rising national insurance rates and increasing wages, many businesses are re-evaluating their hiring strategies for 2025. Temporary staff or contingent resources can sometimes fill roles quickly or reduce costs for businesses worried about the commitment of permanent hires. But do temporary hires really save time and money, or do they introduce hidden challenges?

Here’s a breakdown of the pros and cons of temporary vs. permanent hires, plus some essential HR info to help make an informed decision.

How to Recruit Temporary Staff

When considering temporary staff, there are three main options:

1. Fixed-term Contracts (FTC): These contracts end on a specific date or when a task is completed. Common for maternity cover or short-term projects, FTCs offer employees holiday pay and notice periods based on contract terms.
2. Zero Hours Contracts: Workers aren’t guaranteed hours, giving flexibility. However, new legislation as part of the Employment Rights Bill requires employers to offer guaranteed hours based on past work. (I recommend avoiding these for long-term solutions, especially as a member of the GM Good Employment Charter).
3. Agency Workers: Hiring through a recruitment agency (and yes, we offer temporary and contract recruitment services too!) means they’re classified as ‘workers,’ not employees. After 12 weeks, they have the same rights as permanent employees, including pay and working time rights.

The Case for Temporary Hires

Temporary hires offer flexibility, as well as key advantages like:

1. Cost Flexibility: You only pay for the hours worked, avoiding long-term salary commitments, as well as the need for big hiring budgets or long-term cashflow that comes with the investment of a permanent member of staff.
2. Quick Scaling: Ideal for seasonal peaks or covering short-term absences. Recruitment processes are often shorter than for permanent roles as you may choose to skip some of the scrutiny you invest in hiring a long-term employee, plus temp staff tend to be available to start immediately.
3. Specialised Skills: Temps often bring niche expertise, reducing the need for internal training and quickly adapting to new systems. They’re likely to be familiar with the flexibility and agile nature of temporary contracts – making them used to hitting the ground running, picking up new systems and taking ownership of tasks with minimal supervision.

However, there are challenges:

1. Higher Hourly Rates: Temps can command higher rates, which may outweigh perceived savings.
2. Administrative and Legal Burden: Employers must manage compliance with laws like AWR and IR35, which can add significant admin work.
3. Lack of Continuity: Temporary workers may lack the commitment and cultural fit of permanent staff, impacting long-term team dynamics.

The Value of Permanent Hires

Our advice to both? Hiring temps isn’t always the ‘quick fix’ you think it will be. Permanent employees remain the backbone of most businesses, providing stability and a long-term investment in the company’s growth. They’re more likely to be invested in your company’s success, contribute to your culture and, over time, they gain valuable institutional knowledge and experience.

The costs associated with permanent recruits are also more predictable. While there are ongoing costs like national insurance contributions and benefits, these are easier to forecast and budget for. Plus, with the right training and development, permanent staff can grow within the company, reducing the need for external recruitment.

While the recruitment process may take a bit longer, in our view it’s a worthwhile investment in hiring the right people for your business.

Factors to Consider Before Deciding

Here are key considerations when deciding between temporary and permanent hires:

1. Demand Forecasting: Evaluate whether your needs are short-term or ongoing.
2. Cost Analysis: Compare the true cost of permanent staff (including benefits and taxes) with the higher hourly rates and admin costs of temps.
3. Compliance & Risk Management: Be aware of relevant legislation, such as IR35 and AWR, and ensure you’re meeting all obligations.
4. Team Dynamics & Brand: Consider how temps might affect morale and productivity, and the message it sends about your company’s values.

Finding the Right Balance

For many businesses, the ideal strategy combines both temporary hires and permanent hires. Temporary staff work well for seasonal or project-based needs, while permanent hires are best for core functions requiring stability.

As hiring costs rise, being strategic about your workforce mix is key. Temporary hires offer flexibility and savings in the short term but come with admin and legal responsibilities. By assessing your needs, forecasting demand, and understanding hiring costs, you can create an effective workforce strategy. Whether temporary, permanent, or a mix of both, please get in touch if you’d like to discuss what’s best for your business.