Forecasting of employment factors are based on historical data and projecting the future by following past trends. Classification of salaries and wages are projected, and discussed before the budgeting for the next fiscal year. The costs incurred by different departments within the organization are fixed and variable. The variable costs are based on workers’ salaries and the increase or decrease in productivity. Staff pools or float pools work more variable schedules consistent with work demands so contract labor is looked at as more cost productive.
Employees are more expensive to employ because of regulations as a requirement of additional expenditures. Employers also have the option of hiring temporary or agency employees through a third party company. Companies that choose to hire independent contractors eliminate the cost of overtime, and the employer avoids additional expenses such as tools, training or traveling. Independent contractors reduce the cost of required benefits, employment taxes, and taxable dollars the employer pays out. Contract labor does not have to go through the arduous safety orientation and competency check off that permanent employees go through during orientation and yearly.
Depending on how companies classify contingent or temporary workers, they can offer companies cost savings as a short-term benefit to protection under the employment laws. There are situations an employer hires seasonal and part-time workers through staffing firms. Hiring a temporary worker is the reduction in unemployment claims. The claims are absorbed by the staffing company or shared rather than consumed totally by the employer. Most temporary employees do not have an investment in the company where they are recruited to work. On the other hand a permanent worker poses commitments and investment in the employer. Human resources capital is very expensive and proper balance of the types of classification of...
References: D. D. Bennett-Alexander and L. P. Hartman. (2007). Employment Law for Business
McGraw-Hill, Boston, MA
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