What Is a Temporary Employee?

A temporary employee is someone who is hired for a set, pre-determined period of time, either on a full-time or part-time basis. They may be hired for a day, a week, a month, or longer—whenever your organization needs an extra pair of helping hands. Temporary employees are not independent contractors. With temporary workers, you determine where, when, and how they work. Your temporary workers can work onsite or in the field. You get all the benefits of having a dedicated employee, without a long-term commitment. There are three main situations where such workers may be needed:

• Seasonal fluctuations, such as the holiday season or a sudden increase in demand
• A gap in the workforce, caused by a permanent worker’s vacation or leave of absence
• On-call or per diem workers (such as substitute teachers or on-call healthcare workers)

What Is the Benefit of Hiring a Temporary Employee?

In 2022, there were about 3 million temporary workers in the United States. These workers are sometimes called temps, on-call workers, per diem employees, “as needed” workers, or contingency employees. No matter what you call them, they offer many benefits for organizations.

• Temporary workers help you adjust to changing needs. Temp workers keep you flexible. When you need extra help for a big order or the holiday rush, temps can help. If you have an employee taking maternity leave or time off, a contingency worker can keep you staffed until your full-time worker returns.
• Temporary employees can save you money. According to the Bureau of Labor Statistics, benefits account for 31% of employer costs for worker compensation. In most cases, though, temp workers don’t need to be paid benefits and are a cost-effective way to fill in a labor gap. Temporary employees also require less investment than permanent employees when it comes to training, onboarding, and professional development, which also helps save your business money.
• On-call workers help boost your productivity. When you’re on a tight deadline for a project or have a busy season, contingency workers can temporarily boost your productivity so you can meet the demands of your workload. You can hire multiple temps to suddenly boost production or the number of clients served.
• Contingency employees let you try before you hire. Some companies hire temps and eventually transition some of them to permanent employees. They get to know a worker over time and see how they work before they make a job offer. If you do decide to do this, don’t make any promises about permanent employment, however. You don’t want to have to walk back a potential job offer.
• On-call workers give your workers a break. More hands on deck can give your team a break, especially at busy times. With temps helping out, permanent workers can avoid overtime and enjoy a better work-life balance. You can also prevent a culture of overwork from developing. 
• Temps can help you address market worries. In a tight talent market, it may be hard to find the candidates you need to fill open positions. In these cases, temporary workers can help you keep your doors open while you continue to look for talent. You may even find your next permanent hire through a contingency hire.

How Can You Successfully Hire a Temporary Employee?

Hiring an “as needed” worker is a different process than recruiting a permanent member of your team. Here are the best practices for hiring temp workers.

Define the job

Decide how many hours you can offer a temporary employee, what they’ll be working on, and how much the position will pay. Being clear in your requirements will help you find the right temp for the job. Write a clear job description that outlines what the position will require and how long it will last.

Decide how you’re hiring

It’s possible to hire temps directly by posting on job boards or recruiting using your usual hiring methods. You can also hire a temporary employee through a recruitment or temporary staffing agency. If you need to hire quickly, agencies can take care of vetting and simply send over a qualified worker.  There are other ways to find temporary employees, too. You can contact former temps or seek out referrals from your employees. Your current workers may know someone who is looking for casual work. If you tend to hire many temps, an applicant tracking system (ATS) lets you post to multiple job boards and manage and communicate with multiple candidates.

Screen your candidates

Once you have a few potential temporary hires, you’ll want to make your selection. The process for hiring temps is more streamlined—you don’t want to invest too much time, since this is not a permanent addition to your team.  Instead, review applications and resumes and select a few likely candidates. Schedule a short telephone interview and then narrow down the list. Once you have a few options left, schedule in-person or longer phone interviews so you can make your final selection. When you’re ready to hire, make sure your offer includes specific start and end dates to keep the temporary nature of the work clear.

Stay compliant

Unlike independent contractors, temporary workers are employees. They need a W-2 form and you’ll need to pay payroll taxes for these workers. You’ll also need to complete an I-9 form to verify the worker’s identity and work authorization. Unlike permanent workers, however, temps may not be entitled to benefits. Make sure you find out what the requirements are in your state. You might even want to consult with an employment attorney to make sure you’re compliant.

Create an onboarding process

You may want a separate onboarding process for temp workers. This can be a more streamlined version of what you offer permanent team members. For example, you might want to share only the basics of your company culture and what the on-call worker needs to get their job done. Connecteam’s employee training app allows you to create videos specifically for temps so they can get caught up with your work practices.

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Best Practices When Employing Temp Workers

There are certain strategies that can help you integrate temporary employees with the rest of your team:

Be welcoming, but do set boundaries

Contingency workers sometimes fall into a grey area in the workplace: they’re workers and yet everyone knows they’re not permanently part of the team. At some workplaces, this can mean on-call workers are ignored. At other workplaces, it can mean temps are treated as part of the workplace, which can lead to confusion for employees. Some contingency workers are doing temp work to fill an employment gap and may be looking for full-time employment. You don’t want to give the impression that a contingency job can lead to permanent work if that’s not the case.  Avoid treating on-call workers as permanent. Do offer training and be inclusive, but also be clear that the worker will be moving on. You will need to decide how to do this. It may mean not having the temp employee take part in all professional and personal development opportunities. It could also mean mentioning the final workday: “We’re very grateful for your work here through March. It will really help us out.” 

Set up good communication

Temporary workers need to learn the ropes quickly. Make sure they know where to turn if they have a question about their work. Apps such as Connecteam’s chat enable temp workers in the field to quickly contact a manager to ask questions or to get clarification about a job. You might also consider pairing up your temp with a more experienced team member, so your permanent employee can be a support system on the job.

Understand how to protect your organization

Since contingency workers are still employees, employers are still liable for their behavior. If a temp is accused of misconduct or violence, your organization can be held liable. For this reason, you need to vet carefully and offer clear training. You might also want to contact your business insurance providers to find out whether on-call employees are covered by your liability policies. In addition, consider whether you want to have temps sign a non-disclosure agreement to protect your trade secrets. Temp employees can also file claims, including for wrongful dismissal. Note that just as with a regular employee, you can terminate an on-call worker with cause. However, use extra caution, especially if they are part of a Title VII class, as you don’t want a claim in this regard. Just as with any employee, it’s important to keep performance reviews and a file on each of your temps, so you have all the appropriate documentation about your workers.

Pay attention to legal issues

There is no set limit on how long you can hire a temporary employee. However, if you hire one on an ongoing basis, they may eventually legally be considered employees in some ways. In most cases, workers are considered full-time and are required to be offered health insurance if they have worked 130 hours per month. Consult IRS rules to make sure you’re offering health insurance as appropriate. In addition, employees who work 1,000 hours in a year may be eligible for your employer-offered retirement plan if that plan is covered by the Employee Retirement Income Security Act (ERISA). In both these cases, temp workers are not eligible for these benefits if they were hired by a staffing agency. If you expect you will need temps for a longer period and they will be working long hours, consult the laws in your state. You may want to hire a few contingency workers for shorter periods of time to protect yourself. Or, you may want to work with a temp staffing agency to stay compliant.

Succeeding Long-term With a Temporary Employee

Temporary workers help your organization stay agile and flexible. Whether you need extra help as your business needs change or you need to temporarily replace a worker who’s on leave, temps can make a difference. With a smart hiring strategy and an eye toward compliance, these workers can help you stay productive and can help you manage your workload.