5 Benefits of Temp-to-Hire for Your Business

Temp-to-hire positions are a useful way for businesses to manage some of their staffing needs efficiently and effectively. Businesses can bring on temporary workers to evaluate their performance and cultural fit without investing significant resources into the hiring process.

Additionally, temporary positions offer a low-risk way for businesses to improve employee retention by offering permanent positions to those who prove to be valuable team members.

In this article, we'll take a closer look at how temp-to-hire works and explore the many benefits this approach can offer companies. We'll also provide some practical tips for implementing a temp-to-hire program in your business.

What is temp-to-hire?

A temp-to-hire role is a type of employment arrangement where a worker is hired on a temporary basis, with the potential of being hired for the role full time at the end of the contracted term.

Typically, the terms of a temp-to-hire position are short, ranging from a few weeks to a few months. During this probationary period, the candidate works alongside the existing team, performs the duties of the role, and undergoes evaluation by the hiring manager or team lead.

The business may decide to extend a full-time job offer at the end of the temporary assignment based on factors like the candidate's skills, performance, fit with the team and work environment, and continuing business need.

How does temp-to-hire work?

The first step of the temp-to-hire process begins with sourcing a temporary worker through a staffing service (e.g., a temp agency) or a direct hire (e.g., job boards or social media platforms).

The organization and the temporary worker then make an agreement in the form of a temp-to-hire contract outlining the temporary assignment’s terms, conditions for transitioning to full-time employment, and termination process.

If the temporary worker is found to be suitable once the temporary assignment is complete, the company may extend a formal job offer for a full-time position. This will come with a separate contract indicating their new status as a full-time employee. If not, the organization must follow the contract termination procedures outlined in the original temp-to-hire agreement.

Temp-to-hire positions differ from temporary or contract roles in that those in the position have the potential to transition to full-time employment. Temporary workers are typically hired for a fixed period, often to cover seasonal demand or fill a gap during an employee's absence. They’re not usually considered for permanent employment once their contract ends.

5 Benefits of temp-to-hire for businesses

Temp-to-hire positions enable businesses to evaluate potential new hires before offering a permanent role. This approach comes with a range of benefits, including cost and time savings, access to a larger pool of candidates, and workforce flexibility.

In the following section, we’ll highlight the benefits your business may expect if you decide to implement a temp-to-hire arrangement in your organization.

Time to assess performance

By bringing on a temp-to-hire worker, you can assess their skills and cultural fit before committing to a permanent employee contract. Providing the worker with various assignments and projects and an opportunity to collaborate with the team can give you a better understanding of their performance and suitability for the role.

This approach enables you to evaluate the candidate's work style, strengths, and weaknesses before making a long-term commitment. This can save your company time and resources in the long run by avoiding the costs associated with a long-term hire who ends up not being a good fit.

Cost and time savings

Temporary workers are typically less expensive than full-time employees because they don’t qualify for benefits, such as health insurance, retirement plans, paid time off, and other company incentives. This reduced overhead can result in significant cost savings for businesses.

In addition, temp workers may earn a lower rate than full-time hires because of the entry-level or probationary status of the position. If the position currently requires only part-time hours, hiring a temp-hire worker may be easier—and less expensive—than hiring a full-time person who will be underutilized.

Recruiting and hiring temp workers is often faster and more streamlined than hiring full-time employees, further saving companies time and resources. This is because companies that opt for temp-to-hire arrangements often collaborate with temp agencies or online staffing platforms.

These agencies provide access to a pool of pre-screened candidates, reducing the need for extensive recruitment processes. The agency takes on various responsibilities, such as broadcasting the job opening, sourcing potential candidates, conducting background checks and screenings, and even handling preliminary interviews, onboarding, and training.

Keep in mind that using a temp agency can cost you additional money beyond the basic wages paid to the temporary workers, such as service fees.

However, the agency might cover some costs including payroll taxes, workers' compensation insurance, and administrative fees. These expenses contribute to the overall cost of hiring temporary workers but can also relieve the company from certain legal and administrative burdens associated with employment.

Access to a larger pool of candidates

Many highly qualified professionals may prefer to work as temp workers before committing to a full-time position. This provides your business with access to a larger pool of candidates that you may not have been able to tap into otherwise.

For example, experienced professionals taking a break from full-time work may be interested in temporary work arrangements offering greater flexibility. This can be a valuable opportunity for your business to benefit from their expertise and knowledge while deferring the costs and obligations of hiring a full-time employee.

Flexibility

Temp-to-hire jobs provide an added layer of flexibility compared to traditional temporary worker placements. While both temporary workers and temp-to-hire workers are initially brought in on a temporary basis, the key distinction lies in the potential for permanent employment.

In a temp-to-hire arrangement, you can expect:

• Coverage of immediate workforce needs. Temp-to-hire allows companies to address short-term workload demands by quickly bringing in temporary workers without the long-term commitment of a full-time employee.
• Reduced hiring risks. By initially hiring workers on a temporary basis, companies can mitigate potential risks associated with permanent hires. They have the opportunity to assess the worker's performance, work ethic, and compatibility with the team before making a long-term commitment.
• Development of skills and tailored training. With the potential for permanent employment, companies can shape and refine the worker's skills to meet their specific needs and requirements.

Lower risk

Hiring temporary workers on a temp-to-hire basis can help businesses mitigate several risks, including:

• Bringing on a bad hire. Making a poor permanent hire can have significant consequences for a company. It can lead to decreased productivity and increased training costs. By utilizing a temp-to-hire approach, companies have the opportunity to evaluate a worker's performance, skills, and fit with the organization before making a long-term commitment. This evaluation period helps minimize the risk of hiring an unsuitable candidate and increases the chances of retaining a worker who is well-suited to the role and the organization.
• Skill mismatches. With a temp-to-hire strategy, companies can evaluate the temporary worker's performance and skills in real work scenarios before making a permanent hiring decision. This reduces the risk of skill mismatches and ensures that the worker possesses the required capabilities for the job.
• Productivity loss. By transitioning a temporary worker who has already been working within the company to a full-time position, the risk of productivity loss is significantly reduced. During their temporary tenure, the worker has had the opportunity to adapt to the work environment, enabling them to smoothly transition to a full-time role without a gap in productivity.
• Legal risk. Since the temporary worker is not initially hired as a permanent employee, there is greater flexibility in terminating the employment if necessary or in the event of a business downturn requiring reduced staff. The specific end date of the temporary contract provides a clear framework and mitigates the legal risks associated with terminating a permanent employee.

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Tips for using temp-to-hire workers in your business

Temp-to-hire workers can help your business reduce the risk of poor hiring decisions. However, using this strategy effectively requires careful planning and execution.

Here are some tips to ensure your business chooses an effective temp-to-hire strategy.

1. Have assessment practices in place

Assessing the cultural fit of a new hire is an important part of the hiring process and requires a thoughtful approach to evaluation. To do this effectively, you should establish assessment practices that track and evaluate the performance of the temporary worker.

One way to assess performance is to define individual metrics that align with the company’s goals. These metrics will vary depending on the nature of the position, but could include items like sales numbers, customer satisfaction ratings, or quality of work produced that align with organizational revenue, share, and brand indicators.

By monitoring these metrics over time, your business can gain insight into the temporary worker's performance and assess their fit within the company culture.

Regular performance discussions are also an important tool for assessing cultural fit. By providing constructive feedback on the temporary worker's performance and teamwork abilities, you can better understand whether they’re a good match for the company's values and culture.

Lastly, soliciting feedback from colleagues who work closely with the temporary worker may be beneficial. Collect feedback from peers and supervisors to understand the employee's strengths, weaknesses, and overall fit within the company as input to your decision about whether to hire the temp-to-hire employee at the end of the contract.

2. Know and learn about your business needs

Having clear expectations for the specific temp-to-hire position is essential to give your temporary worker the best chance of succeeding. Expectations should include required job responsibilities, performance goals, and any specific skills or qualifications.

Communicate these expectations to the temporary worker from the outset, and provide any necessary training or resources to help them succeed. Training may include safety training, comprehensive on-the-job training in standard operating procedures (SOPs), as well as pairing the individual with an experienced worker for guidance and support.

Regularly checking in with the temporary worker and providing constructive feedback can also help ensure they are meeting your needs and contributing to your business’s success.

By setting clear expectations and providing the necessary support and feedback, business owners can effectively integrate temporary workers into their workforce on a permanent basis at the end of the temp-to-hire period if they choose.

3. Be selective during the screening process

You should treat the hiring process for temporary workers with the same level of care and attention as you would for a full-time employee, as temp-to-hire workers may become permanent additions to the team.

Be selective during the screening process to find the right temp-to-hire worker for your business. This means creating a detailed job description outlining the specific skills and experience needed for the position and conducting targeted interviews that assess the candidate's fit for the role.

During the interview process, ask questions tailored to the position to gauge the candidate's skills and experience.

For example, suppose you're hiring a temporary employee for a customer service position. You might ask questions about their experience dealing with unsatisfied customers or high-pressure situations.

In addition to conducting targeted interviews, check references thoroughly. This can provide valuable insight into the candidate's work history, personality, and overall fit for the position.

You can also use a reliable agency or hiring platform for candidate vetting, background checks, and reference verification to streamline the recruitment process and assess qualified candidates efficiently.

By being selective during the screening process, your business can find temporary workers who meet your current needs and have the potential to become long-term team members. This can help reduce turnover, increase productivity, and ultimately contribute to your business’s overall success.

4. Consider creating combination roles for candidates you love

Sometimes a business can’t convert a temporary worker that they believe would be a valuable addition to the team because the role is no longer needed. However, for very strong workers, consider creating a special role for them at the end of the temp-to-hire term.

This position might combine multiple smaller roles, potentially involving cross-functional teams, to provide the worker with diverse tasks and projects. By offering a mixed role, businesses can still benefit from the temporary worker's skills and contributions. The employee can benefit from seeing multiple departments and engaging in wider-ranging activities.

5. Don’t be afraid to let poor candidates go

Temp-to-hire workers can showcase their skills and cultural fit during this trial period. This allows the company to make an informed decision about whether to extend a full-time offer.

If, however, the worker doesn't perform to expectations or isn't a good fit for the company culture, you can let them go and continue searching for a better match. This can prevent costly long-term hiring mistakes and ensure you have the right team to achieve your goals.

How to find good temp-to-hire workers

Finding good temp-to-hire employees can be a challenge, but a reputable staffing agency or talent platform can help. A staffing company can provide access to a pool of qualified candidates pre-screened and vetted for specific skill sets and job requirements.

On the other hand, talent platforms like Upwork Full-Time can provide a convenient and flexible way for companies to find temp-to-hire workers with specific skills and experience.

You can take advantage of Upwork's advanced search options to find qualified candidates that you may not have found through traditional hiring channels. Plus, Upwork takes care of the hassle of contracts and payment methods, so you can focus on building a strong team.