Description
Temporary employees as a percentage of the total full-time equivalent workforce.
Formula
FTE temporary / FTE * 100
Interpretation
Staffing Rate – Temporary indicates the percentage of the organisation’s full-time equivalent workforce that is classified as temporary, as opposed to ongoing. Temporary employees are those who may be employed for a fixed term or on a casual basis. In certain circumstances, contractors and temporary employment agency staff may also be measured separately or included when considering all temporary workers.
Organisations can use temporary employees to fill short-term recruitment vacancies or the temporary absences of regular employees, or to meet short-term skill requirements.
In some cases, organisations can come to rely on temporary employees during hiring freezes, or they may use a temporary employment relationship as a trial to determine whether a candidate is appropriate to hire on a regular basis. High results for Staffing Rate – Temporary may indicate that an organisation relies heavily on such trial relationships to make effective hiring decisions.
However, high results could instead indicate that managers are using temporaries excessively to avoid restrictive hiring policies or that recruiting capabilities are ineffective in planning for and filling vacancies.
Temporary employees are also used by many organisations as a contingent workforce to allow for workload peaks or seasonal swings in resource requirements. Employers can track this measure monthly and quarterly to better plan for or mitigate their monthly, yearly or cyclical swings in labour demand and their resultant use of temporary resources.
Acquiring temporary resources can often be less costly than hiring ongoing workers who may receive benefits or demand higher wages. Practically speaking, organisations might also find that temporary workers can be released more quickly than permanent workers when necessary. Thus, high results for this measure might indicate that an organisation uses temporary employment as a cost cutting measure.
However, organisations adopting such workforce strategies must also weigh the productivity costs associated with cycling through temporary employees, as new temporaries require time to understand the organisation’s processes, rules and culture to be effective.
Data Sourcing
Organisations can track temporary employees through HRIS or payroll tables, or through third-party employment agencies. Most organisations find it difficult to accurately capture temporary resources not tracked within the organisation’s payroll system.
Analysis
Employers may find it useful to analyse this measure by organisational unit, function or location to understand where temporary employees are most heavily used. When possible, organisations can also analyse results by job family or occupation to understand which positions are most commonly occupied by temporary resources. Such analysis might be helpful for exposing gaps in recruitment practices.
Limitations
Staffing Rate – Temporary does not, without further analysis, indicate for what purpose temporary staff are employed, e.g. temporary vacancies, temp-to-hire practices, seasonal fluctuations, etc.
Nor does the measure indicate the cost of using temporary workers versus ongoing workers, or the impact of temporary employees on workforce productivity.
Targets
Organisations set targets for this measure within the context of their stated goals for temporary resources, e.g. short-term coverage of vacant administrative positions, seasonal coverage of unskilled labour, etc.
Targets should also incorporate some understanding of the costs and benefits of temporary versus regular resources for relevant positions, including such factors as wage, benefits, productivity and cultural impact.
Employers who leverage temporary employment as a differentiating strategy may target moving results toward the 75th percentile of a relevant benchmark group. Organisations not employing such a strategy are likely to target the median.