June 19, 2011
Temporary Employees versus Permanent Employees
The purpose of this paper is to determine whether a company should utilize temporary employees over hiring permanent fulltime employees. This paper will look at not only the economic cost and the accounting cost of both options; it will also factor in the long-run economic impact that both options will have on the company.
With the down turn of the economy, many companies are looking at ways to cut cost and the solution is to use temporary employees as a means to bring down their overhead cost. In the manufacturing industry, this is becoming a very common practice because companies can find skilled people who are desperate for jobs and pay these temporary employees a decent wage but they do not have to provide them with any benefits. There however are some drawbacks to using temporary employees that many companies fail to think about because they are more concerned with the increasing their profits with the least amount of cost incurred. The first temporary agency was introduced in the forties by William Russell Kelly, who introduced the “Kelly Girl” which supplied companies with temporary clerical workers to companies who needed people to fill in when companies needed the extra help. In the last twenty years, many companies have either eliminated all of the clerical/secretarial positions or they have drastically reduced the number of positions because of the advances that have been made in technology. To stay in business, temporary agencies had to revamp their business strategy and supply a wider variety of temporary employees. Temporary agencies today now offer companies temporary help in numerous categories ranging from blue-collar positions, such as assembly line workers, through professional positions such as accountants and upper management. The...