Temp to Perm Meaning - How does it work?
20 July 2022

Temp to Perm Meaning: How Does it Work?

2 min read

Contingent workers are typically sourced through staffing agencies to augment an organization’s existing workforce, providing extra support that allows them to complete new projects, ramp up for seasonal demand and acquire new skills or expertise.

These temporary workers come into an organization under a working arrangement that is limited to a certain period of time based on the needs of the hiring business, giving the company benefits such as:

  • The ability to quickly meet fluctuations in demand
  • Improved business flexibility to adapt to changing market conditions
  • Cost savings
  • Filling gaps within their permanent workforce

But what happens if those workers make such a big impact with your business that you want to hire them on a permanent basis? 

In some cases, staffing agencies offer a service known as temp to perm. In this blog, we take a look at what that means, how it works, and what the benefits of temp to perm workers are for your organization.

2022 Contingent Workforce Trends

What does temp to perm mean?

Temporary workers serve a wide range of functions for hiring organizations. They’re typically used to fill in temporary vacancies, scale up for increased demand, or to fulfill the requirements of short-term projects.

These roles are truly temporary. They last a predetermined period of time, without the opportunity for the position to become permanent. If the hiring organization wants to keep the temp on, the contract has to be renegotiated.

A temp to perm situation, also known as temp to hire, is a similar agreement but with one big difference - the outcome after the predetermined period. 

In a temp to perm agreement, the temporary worker has the opportunity to be offered a full-time permanent employee position with the hiring organization after the temp to perm period is over. 

What are the benefits of temp to perm for employers?

  • Additional time to determine a candidate’s suitability 

One advantage of the temp to perm model is that your business has the chance to evaluate workers before making them permanent employees. Your organization can ensure that workers adjust well to your company culture, have the skills they need to complete their job effectively and that they fit seamlessly into your work environment. This “Try before you buy” model can be very beneficial for some companies.

And it’s not just about your ability to evaluate potential new permanent employees. It also gives temp workers to evaluate whether your business and company culture is a good fit for them and what they’re looking for. 

When you give both your business and temps the time to evaluate each other, you can dramatically mitigate the chance of making bad hires and significantly reduce workforce turnover within your organization.

  • Improve business agility

As the market changes, so do the workforce goals of your organization. Businesses today need to stay on their toes, with the ability to seamlessly scale depending on changes in demand and new projects.

Hiring temporary workers allows businesses to prepare for rapid changes in demand at a moment’s notice, and temp to perm situations allow organizations to seamlessly grow their business as demand grows.

  • Reduce costs associated with employee benefits

While a worker is under a temporary contract, they typically aren’t entitled to the benefits that employees are, such as paid time off, medical and dental benefits, as well as retirement packages. You’ll save significant amounts of money by not paying employee benefits to candidates that haven’t been recognized as a best-fit. 

After a temporary worker is determined to fit your organization and a permanent role is offered, these benefits are then added on as part of that workers transition to a permanent employee position with your business. 

Just like any part of the contingent workforce, temp to perm hires should be managed strategically so that your business has visibility and control over contingent spend and is able to mitigate any workforce misclassification risks.

  • Faster time to get someone in

Temp hires are normally faster to source and onboard than hiring permanent staff.

Get in touch with the Contrax team of contingent workforce management specialists today.

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