In an environment ridden with business complexities and market volatilities, handling human resources in an effective way, has indeed become a challenging task. Not only does it require appropriate personnel management but it also entails a consistent provision of claims and benefits.
However, as the commercial climate grows exponentially, most small, medium and large organizations have begun to feel the pinch in fulfilling their staffing needs.
Enhanced government regulations, enforceable labor laws and limited monetary reservoirs have collectively cast a pall of gloom the industry as a whole. This situation has further intensified with the increasing demand of a specialized talent pool, which can be employed for undertaking short-term projects in a competent and efficient manner.
In order to deal with this difficult scenario, a number of businesses have gradually begun to make a seamless transition towards the newly emerging discipline of temporary staffing.
What Is Temporary Staffing?
Commonly abbreviated as Temp staffing, temporary staffing is essentially a human resource management technique which allows organizations to hire and fire a skilled set of individuals on an as-needed basis. These employees are recruited through a diverse talent pool registered with a professional staffing agency.
Throughout the contract period, they remain on the payroll of the staffing agency, which also handles their HR related formalities. Such type of temp staffing enables the companies to bring about a semblance of stability in their operations while mitigating any element of prospective risk.
Temp staffing is also known to provide a number of other benefits which make it an extremely attractive HR option. These include:
- The organization take care of the payroll function from within or undertake cumbersome compliance processes. This saves both; time and money.
- Tedious payroll and documentation procedures are entirely done away with, thus, permitting the organization to focus on its core business activities.
- The enterprise is not accountable for its temporary staff in the same way as it is responsible for its permanent employees. The accountability portion is completely outsourced to the staffing agency.
- The management gains greater access to a broader set of personnel with a multitude of variable skills, who can be employed for a predefined job tenure.
- The business retains the flexibility to screen these temporary employees and hire them for a permanent position solely on the basis of their merit.
With such formidable advantages, it comes as no surprise that temporary staffing in India too has steadily begun to witness a massive amount of proliferation. Nonetheless, a lot of business enterprises are still unaware of the massive potential which temp staffing harbors.
This is why it becomes highly important to know of certain HR intricacies which might help organizations understand temp staffing better.
1. How Much Do Staffing Agencies Make Off Their Employees?
Every temp staffing agency works on a different profit model. The total amount of money which they stand to make per employee is well-defined in their contract with the company utilizing their services. This rate can vary on an hourly, weekly, fortnightly or monthly basis, depending upon how long a temporary employee is associated with a specific project/enterprise.
In other words, the money which a staffing agency makes can be deciphered by calculating the difference between the employee remuneration and the amount billed from the client. However, these rates do not reflect the actual profits made by the staffing agencies. Overhead costs, maintenance costs, taxes and employee benefits need to be subtracted from this amount.
At this juncture, it is pivotal to note that even now, there is no clear-cut industry standard which regulates the financial aspects of temporary staffing in India. Therefore, the rates continue to vary in accordance with demand.
2. Do Temp Agencies Offer Benefits?
The nature and extent of coverage offered to temporary employees varies from one agency to another. Nonetheless, most temp staffing agencies offer a wide variety of benefits to ensure the physical and financial safety of the personnel they provide.
To begin with, staffing agencies conduct a thorough check of the working conditions and the workplace environment of the recruiting company, to make sure that it complies with the laws of the land. This is followed by registering the employees on their payroll and calculating the CTC (Cost to Company) per individual, which is meant to include the various components of earnings and deductions. Apart from these standard benefits, other welfare measures like accident insurance, leave policy, retirement benefits, reimbursement and claims policy etc. are also offered.
In fact, a lot of agencies conducting temporary staffing in India aim to ascertain that their employees are provided with the same benefits as extended to a permanent workforce.
3. Are Temp Workers Independent Contractors?
In common parlance, the terms independent contractors and temp workers are often used interchangeably. However, that is not the case.
Temp workers, by legal definition, are only those individuals who have been employed through a formal temp staffing agency. Their salaries, taxes and other HR formalities are taken care of by the said staffing agency while their job tenure is determined in advance.
On the other hand, independent contractors are the people who have been employed directly by a company on a project-to-project basis. The salaries of these contractors are paid by the recruiting organization and their terms of association are contractually defined.
These individuals operate without the assistance of temp agencies and are usually self-employed. They are also responsible for negotiating their own remuneration and paying their own taxes. As far as temporary staffing in India is concerned, independent contractors generally tend to work as freelancers.
4. Is a Temp Agency Considered An Employer?
The employment terms of temp workers are broadly defined by their contract. For most practical purposes, temp staffing agencies are considered to be an employer.
This is because they enroll the potential employees, provide them with benefits and are responsible for their safety during the term of employment. They are also adept at handling the occupational health, worker classification and other similar compliance measures.
Although, there are occasions, when the burden of being considered as an employer shifts to the recruiting organization. This happens when the company, contractually, decides to bring temp workers on their payroll. Nevertheless, such cases are extremely rare. By and large, temp agencies dealing with temporary staffing in India are deemed to be formal employers.
5. Do Temp Agencies Collect Data?
Most staffing functions have today become data-driven. When a temp staffing agency registers employees, it uses various forms of technology to collect a wealth of information. This ranges from the employees' qualifications and work experience to their current address and contact details. Based on these details, an applicant tracking software is used to verify the information furnished by the employee.
The collection of such information makes the temp staffing process much simpler. It classifies the workers on the basis of their skills, etc. Through this, the companies can be sure that the employees are the right fit even though they are on the payroll of the staffing agency.
Nonetheless, when it comes to temporary staffing in India, most companies use the strictest safety and security protocols to ensure that the privacy and confidentiality of their employee data remains protected at all times.
The Way Forward
If you are on the lookout for a credible agency undertaking temporary staffing in India, you need to look no further than PaySquare. Having worked with several industry verticals, they have catered to various customized client requirements across sectors as myriad as manufacturing, chemicals, retail, consumer durables, pharmaceuticals and healthcare.
Using state-of-the-art technology coupled with time-tested strategies and proven processes, they make sure that your overall business productivity is not hampered owing to the lack of a diligent staff. By providing temp staffing facilities, while at the same time, taking care of their payroll, personnel and policy related needs, PaySquare helps organizations cut costs, save time and still enhance performance.
As businesses grow temporally and geographically, their requirements for prudent human resources is also bound to increase. And one of the best ways to meet this sudden hike in employees is by employing the services of a temp staffing agency, who take care of the payroll, compliances, etc.
Not only would they provide professional workers to deal with both, long-term projects and short-term contingencies, but they would also relieve the businesses of the cumbersome employee management process. Guided by the keywords of speed, flexibility and transparency, the future of temp staffing appears to be exceptionally promising and bright.