Are temps more cost-effective?
Employers often underestimate the true cost of a full-time employee. We're breaking down how much employees actually cost and whether or not hiring temporary workers is a more cost-effective staffing option.
You have a number of job openings but no time or resources to fill it. This is an all too familiar situation most Recruiters and Hiring Managers fear. Luckily your Human Resources department has the option to utilize a staffing firm to help you recruit qualified candidates. How much do temps actually cost? Is it more than what your current full-time employees cost? Let's dig into the factors that make up the true cost of employees- both full time and temporary workers.
The Cost of a Full-Time Employee
There are numerous expenses associated with full time hires. Employers pay a whole lot more than just the base salary for their employee. In addition to wages, employers also pay for benefits, local, state, and federal taxes.
Benefits and taxes
Employee benefits and taxes are among the #1 top costs of full time employees. One of the best reasons for utilizing a staffing agency is that your company is not responsible for providing these benefits. Depending on your company's specific benefits you offer will all play a factor into the cost analysis.
Full family benefits such as health insurance costs typically rise each year.
Paid vacation/sick timeDon't forget to calculate paid vacation and personal or sick days in your budget. PTO is a costly expense employers are burdened with.
Profit sharing, 401K matching
401k matching and profit sharing costs tend to vary by employer, but don't forget to factor this into your cost.
The Cost of a Temporary Employee
Temporary (contract) employees only work the specified hours or days you need them, so you only pay for the time worked or until the project is completed. So in-comparison to full time staff, contract workers cost much less than salaried employees. Workforce flexibility, hiring speed, and access to available talent are just a few of the top benefits of using a staffing agency.
Are you looking to grow this year? Learn how TPI Staffing can help your company with your staffing needs!