How to Hire Temporary Employees: All You Need to Know

According to the America Staffing Association, staffing companies hire 16 million contract and temporary employees. Most workers fill gaps during business spikes, such as during the summer and winter seasons. Temporary workers also ensure work continues during the full-time employees' leave, sickness, or other absences.

If this is your first time, you are joining millions of other American companies and businesses that turn to temp workers to fill gaps in their talent pool. Most companies use online labor markets or temp agencies to source temporary staff. The hiring process can be overwhelming, so we have compiled this guide to help you make informed decisions.

Who Is a Temporary Employee?

A temporary employee works for a specified period. According to the US department of law, the end date must be specified and should not last more than one year. Temporary workers replace absent employees, bring specialized skills to a specific project, or fill a gap during the high-demand season.

Temporary workers can be part-time, seasonal, shift, or independent contractors. The decision rests with the business owner. Companies hiring temp workers for the first time should start small. Before signing a contract for a major project, test the waters with minor tasks.

How to Find the Right Temporary Employee

Temporary workers are beneficial to the company. They are often ready to hit the ground running, meaning no delays. But finding the right one can feel overwhelming. Follow these steps to make the process easier.

Define Your Needs

The first step to finding the right temporary employee is determining the company's needs—the more specific, the better. Besides other considerations, you must define the tasks that need handling, training, and the length of the engagement. Is it a seasonal need, or do you need help with a single shift?

You may find that your current talent poo l can handle the job. To avoid spending too much time training temporary employees, you can assign the more difficult tasks to the already trained employees, leaving more mundane tasks to the new hires.

You also need to define whether you need a temporary or temp-to-hire employee. Temp-to-hire employees are an excellent option for testing out a new role. Or if you feel less confident about filling in a permanent position too quickly.

Write a Specific Job Description

Since the candidate's choice depends on it, include as many details as possible in your job description. Information such as the required skills, educational background, length of engagement, and experience needed, among others, will help candidates make a better choice. As a result, you will not have many unqualified people to sift through.

Where to Find Temporary Employees

A business can fill temporary positions in several ways. One way is to ask past temp workers if they are available for the role. Former employees make excellent hires as they are already familiar with the company culture and tasks. You can also ask your current employees for referrals which is a quick and cheap way to fill temporary positions.

Employers can also source talent from labor market places and temp agencies. Labor marketplaces like Upwork, Fiverr, Flexjobs, and People Per Hour are easily accessible and provide you with a massive range of profiles. You can filter them according to their ratings or price and pick the best match.

Temp agencies depend on human agents to match candidates to the client’s needs. After discussing your job with recruiters from the agency, they get to work to find the right fit for your company.

Some on-demand staffing platforms serve specific fields, which is advantageous when you are clear about your requirements. Cost, quality, and convenience will guide you in choosing the most suitable platform or agency.

Interview Candidates

If you are using a temp agency, they will probably do the screening for you. But if you are using on-demand staffing platforms, go through the profile and concentrate on your past work history, experience, and educational background to see if they fit your requirements. Do not forget to conduct a thorough background check on every shortlisted candidate, preferably after the phone interview.

Conduct phone interviews followed by a one-on-one chat with the top candidates. Since it is for a temporary position, do not shortlist more than five candidates.

Make an Offer

Always have an offer letter ready to go. Once you find a suitable candidate during the interview, make them an offer immediately. If you wait, you risk losing them to another company. Ensure the remuneration, responsibilities, and company culture are part of the items in the offer letter. Since it is an invitation to join, you must entice the candidate.

Benefits of Using a Labor Marketplace or Temp Agency

woman temporary employee working in office under a lamp

The following are some benefits of using labor marketplaces and temp agencies versus sourcing and hiring yourself.

The fast process allows you to fill positions that become abruptly vacant due to issues like illnesses and sudden departures.
It saves your business or company money.
It enables you to test out workers without a huge upfront financial commitment.

Cost of Hiring a Temp

Before you begin the process of sourcing candidates, you should already have a budget in place. But it is not wise to hire based on cost alone. The one asking for the lowest pay may not be qualified to complete the job. Pick a person based on experience, among other factors, in addition to the cost.

According to this 2022 state of the worker report, workers are stressed about their financial situation. 79% of the workers polled said they want shorter weekly payments instead of the traditional biweekly cycle. Daily payroll platforms will help you retain workers by keeping them happy in these challenging economic times.

Tax, Laws, and Regulations

Independent contractors are exempt from the Fair Labor Standards Act (FLSA). Other temporary workers are employees of the company they are working for or the temp agency. They are therefore entitled to the benefits of the FLSA. Some of the guidelines under this act include the following:

Employees can work unlimited hours as long as they are over 16 years old.
For clerical roles, an employer must pay minimum federal wages and overtime for any hours worked beyond 40 hours per week. The overtime pay must be more than one and a half times the regular pay. Some states have set lower limits; in such a case, the employee should receive the higher minimum.
An employer is not required to give notice to change the hours worked. But if a contract says otherwise, follow it.
Employers are not obligated to pay for vacations, holidays, and sick offs.
Federal law does not require employers to provide breaks, although the state may have different guidelines.

Other laws governing permanent employees, such as the Occupational and Safety Health Act and the right to fair pay, apply to temp workers also. The law also protects them against discrimination based on race, gender, age, color, religion, or disability.

Classification of independent contractors and temporary employees for tax purposes differ. Misclassification could land you in conflict with the IRS. An independent contractor or freelancer is responsible for paying their taxes, while an employer must withhold relevant tax from an employee's earnings. Provide the 1099 forms to the tax department and employees.

To ensure you obey the law, be clear about the specific temporary worker you want to hire. The rules and regulations governing temporary part-time workers differ slightly from those of independent contractors and temporary contracted workers.

Depending on the category, having a contract that you can tweak will move things along quickly. In addition to compensation, requirements, business policy, and project scope, you must include what would happen if either party decides to terminate the contract prematurely.

Terminating Temporary Employees: What to Consider

Firing an employee is not an easy thing for any employer. Before arriving at this decision, consider the following factors.

Explain to the employee the reason for dismissal. You should have enough documentation to back up your claim and avoid a legal tussle.
If you need to terminate an employee due to mistakes, the employer can consider giving them a second chance. Lay out the errors and discuss how the employee will work on them.
Consider the individual contract you entered with the employee. Ensure you have met all the necessary obligations before terminating the contract.
Consider the employee's role and whether their termination will affect your relationship with the client. If it might, ensure there is a smooth transition.
As soon as you decide to fire, inform the employee. Have a clear timeline to ensure your business is not affected.

If the early termination has nothing to do with the employee's performance or discipline, ensure you meet your obligations to the employee according to the contract.

If you follow the steps above, the hiring process for seasonal workers will no longer seem so daunting. Follow all the laws and regulations, both federal and state, to avoid issues.

Stand out among your competitors by offering your temporary workers same-day or on-demand pay. Everee payment solution allows you to run payroll for both full-time W-2 workers and temporary 1099 workers without sacrificing speed. Talk to us about your ultimate payroll solution.