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The Pros And Cons Of Temporary Labor

Jul 25, 2008
Often in business you run into labor shortages. Your business is expanding at a rapid pace. Maybe you've won the bidding on a large job. Whatever the reason you are in the position of needing more help and quickly. The question is whether hiring some form of temporary labor is the right thing to do for your company? Well to figure out the answer to that question you need to know some of the pros and cons of hiring temporary labor.

So let's start with some of the benefits of using temporary labor. One is the ease of finding an agency that can be used to facilitate hiring the workers you need. There are plenty of agencies out there that help to supply workers to companies in need. Many of them even specialize in workers for different industries. If you are in need of an accountant you can find one. Do you need clerical help, warehouse workers, or delivery drivers? Well you can find all of them too. So finding the help you need won't necessarily be that hard of a task.

Another advantage is that the people that are hired through a temp agency are interviewed and their references checked. That way they can make sure that person is the best qualified for your businesses needs. Also when you no longer need them you can inform the agency and let them go. If the time comes that you need someone else you can go back to the agency and request that someone be sent out. Also if you find that the person that was sent to you is not suited for your work environment or that you are just not comfortable with them you can ask for a replacement.

Okay so now that we know some of the pros what's the downside of it all? Well for starters the cost. Now for certain positions this is not a problem. A good accountant can be worth every penny. But what if you need a warehouse worker? You could find that your temp workers will cost your company more than your regular workers do. Because you are not paying the worker directly. They receive their wages from the agency. The agency sends you their bill. But just like most other things involving money everyone needs their cut. The employee needs to be paid, the agency needs to make money, insurance on the worker needs to be covered, taxes have to be paid, and whatever other expenses are associated with the worker.

Another factor to consider is what happens if you find a worker you'd like to hire full time. Often they have a contract with their agency. The contracts are usually for a set period of time. You can either employ the worker until the contract runs out and then hire them or many of their contracts have buyout options. Which means you can purchase the contract of the employee from the agency. The problem with the second option is that the buyout price can run in the thousands of dollars depending on how much time is left on the contract.

So whether you choose to go the route of hiring temporary labor or not is up to you. You just need to do some research first. Check into the labor companies in your area. Find out the various costs associated with the type of worker you are looking for. You'll find there are plenty of agencies and workers out there for you to choose from.
About the Author
Cash Miller is an experienced entrepreneur and speaker who has spent over a decade as a small business owner. His years of experience in small business cover a variety of topics. If you are looking for more small business help please check out http://www.smallbusinessdelivered.com
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