The backbone of any company is its permanent staff however more than ever forward thinking companies are looking to flexible staffing, particularly by using a temporary workforce to give them the speed of movement that they require.
Temporary staffing has in the past suffered from the image of the temp office assistant taken on to cover holidays and peak periods, and whilst this can still be a valuable weapon in the managers’ armoury, time and the skill level of the temporary worker has moved on.
Firms that are better able to weather difficult times are ones that adopt a flexible business strategy1. Being able to actively manage fixed costs is proven to be a significant marker of business survival and ongoing success. The need for a company insolvency practitioner is minimised
For companies with proportionately high staffing costs this will take the form of matching staff levels with demand and in the case of companies that experience high peaks and low troughs the benefit available will be even greater.
Using temporary staff to manage at least a part of the increase in demand is an efficient and responsive method as additional operational staff can usually be found exceptionally quickly.
Bringing in interim staff, especially at higher levels also has the benefit of adding in new knowledge from outside the organisation. Professional interims will often have worked at many different companies, experiencing different cultures, working methods and sectors. Adding this experience into the acquired knowledge of the company can provide a very useful filip for a company looking to move forward.
What help is available
The easiest temporary staff position to fill is the ground level worker, doing a simple and routine job. This takes little training and supervision and can be used to flex capacity at little extra cost when needed. But there are many more types of position in the modern workforce.
Skill gaps can be plugged by bringing in short-term workers to either apply their talents to specific projects for which there will be no requirement later, or to hold the fort whilst the management decide on more long term staffing.
Interim management is more than ever a career choice for many professionals and whilst this arguably started in areas such as telecommunications, where interim staffing is commonplace it is now widespread across not only industry but also public sector and not for profit.
Temporary staffing extends right the way up to the top executive positions where interim Financial Directors, Chief Operating Officers and even Chief Executives are used more and more whilst the company decides on its next move.
The business case
Reducing costs when the company is in a slack period makes sense and is something that is certainly nothing new. But with the advent of highly focused specialist technological skills it is becoming economically difficult for firms to keep a wide enough spread of ability in-house. Occasionally this is solvable by outsourcing but, especially in sensitive areas this is not always the answer. Taking on specialists for a defined term either for a number of hours a week or as a full time contractor helps firms fill this skills gap only for the period needed.
This ‘skill flexing’ becomes even more useful for companies engaged on larger contracts. It rarely happens that firms have contracts that dovetail exactly and there will be periods of slack between jobs. Bringing in specific roles alongside the project plan allows the contract to be completed in the most economically efficient way. This is not confined purely to operational staff as often, experienced firms will engage temporary project accountants and back office staff with the defined aim of servicing one or more contracts for the duration.
Using a temporary solution to produce a flexible and highly responsive workforce brings benefits to employers: among employers that offer flexible working, 76% say that it improves staff retention, 73% that it improves staff motivation and 72% report that is improves employee engagement2.
The flexible workforce as shown in Fig 2 wraps up the concepts of Economic Order Quantity (EOQ) with Just in Time (JIT) ordering but applying this to the workforce paradigm. Ensuring that the firm has only the amount of staff it needs for any given point allows the costs to be matched almost directly to demand. In exactly the same way as holding stock all year to cope with maximum demand (as in EOQ) peak period is wasteful, so staffing up for the highest level of need is not usually the most economic answer to the need.
Work life balance
Employing a professional interim to cover a position whilst employees are away (such as with maternity and paternity leave) enables continuity for the business with managed handovers but without the difficult conversation when the permanent employee returns. Should the permanent employee choose not to continue in the business then the firm has a ready-made and already experienced candidate for the permanent role in place meaning that there will be little or no impact on operations.
Just over a half of mothers who had previously worked full-time returned to full-time work, with about two-fifths reducing their working hours to ‘long part-time hours’ (16-29 hours per week)2. With this in mind it is useful to have a strategy to manage the return and again temporary, job share or part-time options are all useful in this case.
The recruitment dimension
Recruiting permanent staff, even when there is a clear and defined need is always a game of chance. There are of course methods of reducing the risk but early turnover is an expensive and time consuming business with the costs of advertising, interviewing and onboarding all adding up.
By taking on interim staff with a view to ‘Temp to Perm’ the company and the employee get a low risk trial. A temporary staff member can be engaged relatively quickly and the training performance and early days attitude can give a good indicator of the likely success of a permanent appointment.
The time required to take on permanent employees can prove prohibitive for many companies as people already employed in a role will often have to give a months’ notice and for higher level staff this can extend to 3 to 6 months in some cases. A temporary solution can be brought on board quickly and, with already acquired skills they can often take less time to train, especially in the case of mission specialist.
The Temp to Perm route is also good for the employee, especially where they were unemployed or already engaged in interim roles as it allows them to test the company from inside to see if the culture is a good fit for them personally.
Interim staffing doesn’t just stop at the shop floor or accounts office. Companies of all sizes are now seeing the benefits of appointing executive level interims to hold the fort whilst a long term permanent successor is sought. This can be especially useful in times of crisis when the former incumbent has moved on suddenly.
It doesn’t work for everyone
Whilst this temporary approach may seem perfect the truth is that it can never work for every company.
The flexible approach is less useful for firms that do not experience peaks and troughs of demand as it is a simple matter to predict demand very accurately.
Similarly companies that are not going through change processes, who do not carry out projects and are not investing in internal systems such as new accounting software will benefit less from this approach.
It also has to be noted that entrusting work that should be a core competence of the firm and that forms a significant part of their competitive advantage could be argued to be unwise. Putting the companies USP in the hands of people who may have a very short notice period is a recipe for disaster.
Temporary staff are on the whole more expensive than permanent employees, especially when used over a long period of time. The message here is to use the right tool for the job with permanent employees doing work that is long term in nature and temps working on specific and shorter term project roles.
There is a clear and defined strategic reason behind companies developing a plan for flexible staffing. By forward forecasting need they can ensure that they are able to complete projects and peak workloads to satisfy their customers but in the most economical way.
Using temporary staff as part of this permanent strategic solution allows rapid ramping up and de-escalation when required. Flexibility like this is a key marker for successful companies.
Bringing in outside skills not only allows companies to fill skill gaps for specific projects but also ensures that there is an infusion of new external knowledge to further enhance learning of the permanent workforce.
Overall the flexible method of staffing won’t work for every company, but can help a large number of firms respond more quickly and effectively to customer demand and changes in environment but at an economic rate.
1 David E. Gray, Mark NK Saunders, Harshita Goregaokar, University of Surrey, Success in Challenging times:Key lessons for UK SMEs. 2013
2 Houston & Marks (2003) ‘The Role of Planning and Workplace Support in Returning to Work After Maternity Leave’ British Journal of Industrial Relations 41(2)