Temporary Employees Versus Permanent Employees

Temporary Employees versus Permanent Employees

Executive Summary

Given the state of the current economy, many companies are looking for ways to cut their overhead cost. One solution that many companies have been utilizing is to hire temporary employees to fill the void in their lean employee pool. The idea of this is twofold between cost cutting and having a productive employee that has value for the company. The company in the best case scenario would be able to achieve both of these priorities yet they are only usually able to achieve one. This report will examine different facets of the temporary labor issue.

Definition

Over the last couple of years, there have been several different natural disasters that have occurred that have had an impact on power plants all over the world. Dresser supplies these power plants with safety relief valves and because of these disasters occurring, it has created a higher demand for Dresser products. To meet the higher demand, the company needs to hire more help to continue to deliver the quality product that they are known while maintaining the level of on-time delivery that is expected by upper management. The human resource department and accounting department needs to determine which is the best route for the company to take to fill the immediate need of employees to meet the growing demand for safety valves but at the same time try to keep the overhead cost down.

The first temporary agency was introduced in the forties by William Russell Kelly, who introduced the “Kelly Girl” which supplied companies with temporary clerical workers to companies who needed to fill positions temporarily. In the last twenty years, many companies have either eliminated all of the clerical/secretarial positions or they have drastically reduced the number of positions because of the advances that have been made in technology. To stay in business, temporary agencies had to revamp their business strategy and supply a wider variety of temporary employees. Temporary agencies today now offer companies temporary help in numerous categories ranging from blue-collar positions, such as assembly line workers, through professional positions such as accountants and upper management. (Schaefer, 2005)

The most common reason companies should hire temporary help is to fill in during an employee’s absence or when there is an unexpected peak in demand. The problem that has arisen is that many companies see the use of temporary employees as a cost cutting mechanism because they can keep a temporary employee in a position that should be a permanent position without paying them any benefits for an extended period without any promise that the position will become permanent.

With the down turn of the economy, many companies are looking at ways to cut cost and their solution is to use temporary