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Dear Workforce How Do I Make a Case for Hiring Full-Time Employees

I am arguing in favor of hiring full-time employees to fill required positions, rather than temporary or contract employees. How do I make the case?
October 30, 2005
Related Topics: Candidate Sourcing, Workforce Planning, Dear Workforce
Dear Hard Evidence:

Look at what is involved in the job and evaluate the financial and strategic value of hiring someone on acontract/temporary basis versus hiring a full-time employee. Contract or temporary employment is a business risk if you determine the position is strategic or expected to exist into the foreseeable future. The quality of candidates also is a concern. Contract work sometimes is a stopgap until a person finds a better job that includes pay and benefits. Because that's the case, you run the risk of excessive turnover by hiring too many temporary workers.
Quality of customer service also is an issue.FedEx Ground and UPS have very different philosophies around hiring independent contractors--a form of contract labor. In the long run, UPS says that its investment in employees buys loyalty, and loyalty translates into a more consistent and higher level of customer service. This "long run" view may be supported by the fact that FedEx Ground won the J.D. Power and Associates Customer Service Award in 2002, but couldn't hold on to it. UPS recaptured the prize in 2004, also taking top honors for international and air delivery.
Consider the following to analyze whether to hire full-time or contract employees:
Is the position considered strategic to the delivery of the company's core mission?
You don't want a temporary/contract employee managing the core business.
Does the job have a high level of customer interface?
If it always does, you may want a full-timer. If it only requires a high level of interaction during seasonal or high-demand periods, you may want to use a temp.
Is the talent needed considered to be rare and expensive?
It would be ideal to employ rare talent to gain a competitive edge. In reality, though, you may have no choice but to hire contractors if the talent you need is in short supply.
Is the talent considered to be specialized?
Is the position to be filled considered a key development step as part of the succession plan for a higher-level position?
If so, you probably want to use a full-time employee. Determining candidates for succession-planning purposes is tough enough with employees. Don't make it harder.
Is the position's future uncertain?
Is the talent considered to be specialized?
Does the culture of the company allow contract employees to be part of the team and work effectively?
Avoid using contract workers if the arrangements have consistently failed in the past.
Is there an abundance of talent in the workforce that can be drawn on to fulfill the requirements?
The labor shortage is real. Avoid turnover by committing to hire full-time employees. This might also be a good step to develop a temp-to-perm hiring strategy.
Does the CFO recommend outsourcing certain groups of employees to improve the financial bottom line? (This is particularly relevant for publicly held companies.)
Bear in mind that outsourcing complex segments of back-office support services has been disastrous for many companies. In the end, costs could outweigh the gains in stock value and might jeopardize the future of the company.
You mentioned in your question that these are "required positions." This suggests that they are part of an ongoing workforce plan and should carry full-time regular status, regardless of whether they are paid through payroll or accounts payable. Properly classifying workers is both a legal matter and a strategic management matter. Managers must ensure that they meet the federal guidelines for independent contractors any time they choose to hire an independent worker. There is a great deal of information online to help you through the IRS guidelines.
SOURCE: Carl Nielson, principal, the Nielson Group, Dallas, November 25, 2004.
LEARN MORE: Seven Costly Myths About Managing Contract Workers
The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.
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Dear Workforce Newsletter

 The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.

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