What is Temp Staffing and Contract Staffing ?

Temp Staffing is a method of staffing in organization where the employee is recruited on a temporary basis from another organization that provides manpower. He is not on the payroll of the company. The salary and benefits to a temporary staffer are paid by the staffing company i.e. the company that provides the manpower. Temporary staffing is a phenomenon that is increasingly catching up.

The primary reason that drives temporary staffing is that organizations today want to focus on their core business and hence want to outsource all activities that are not directly related to their business. The staffing company provides manpower based on the requirements of the organization. Temporary staffing is based on contracts between the organization and the recruitment company. Typically, contracts can range from three to six months. It has also been found that companies that use temporary staff have greater margins, profits etc.

Temporary staffing requirements usually appear during unforeseen situations such as sick leave, maternity leave, peaks in the workload etc. Some of the advantages in temporary staffing include :

• Reduction in administrative overheads.
• The organization does not have liabilities associated with permanent employment
• The duration of the contract can be flexible.

A study of US companies says that companies using temporary staff (called contingent staff in the US) have higher margins, profits and market cap.

Contract staffing differs from temporary staffing in that the staffing is done for each individual position and not for the function as whole. Contract employees are individually chosen and hence are generally more professional. The association between the organization and the employee lasts for fixed duration and is subject to renewal. Contract staffing helps companies add to the workforce selectively and in specific areas.

Contract staffing is done during load peaks to reduce work load on individual employees and to prevent morale from falling. Contract staffing is also done on projects which are not proven to be successful and where the company may be reluctant to invest much. In such cases, professionals in the particular field may be roped in through contract staffing to work on the new business field.

Both temporary and contract staffing are generally done through manpower recruitment agencies that facilitate the process. This ensures that the people selected are qualified and experienced. These companies maintain a steady database of people along with their qualifications and experience and help the customers with the right candidate.