How Much Does a Temp Employee Really Cost You?

Many companies struggle to determine exactly what a temporary employee costs. There are many factors in play, and the exact size of the expense can fluctuate depending on a range of circumstances. However, by understanding what costs are involved as well as looking at the cost-benefit of using a contingent workforce, you can more easily determine their genuine value.

The Temporary Worker Price Tag

In many cases, the amount you spend to have a temporary employee on staff is similar or slightly lower than what you pay for a full-time worker. Along with addressing the temp’s wage costs, you also have to pay a small fee to the MSP or recruitment agency. This covers a portion of the group’s operational costs, acting as compensation for the work involved in managing your contingent workforce needs.

Often, the final price tag is a bit shy of what you’d spend on a permanent team member. This is especially true if you have a fairly high volume, as many MSPs offer discounts based on the size of your account.

However, you get more for the money than just a great worker. As a result, you have to do a cost-benefit analysis to genuinely understand the value you receive.

The Cost-Benefit Bonus You Receive

While it may seem like hiring a temporary employee through an MSP isn’t resulting in savings, that isn’t the case. First, you get access to contingent workforce management specialists who are highly skilled in recruiting. Often, they can find, screen, and place qualified candidates with your company quickly, reducing your time-to-hire and increasing the speed at which you can reach full productivity.

Second, you are reducing your overall risk. The worker remains on the MSP’s payroll. As a result, you aren’t responsible for costs like unemployment and workers’ compensation, or any ongoing expenses related to workplace injuries, vacation time, sick leave, or benefits packages.

Plus, if a contingent worker isn’t a great fit, you can release them from their assignment with ease and get a replacement fast. This is substantially simpler than firing a permanent employee and having to rehire.

Finally, your administrative burden is reduced. Your HR staff doesn’t have to do any of the tasks associated with bringing on a new hire. Instead, that falls on the shoulders of the MSP.

While the cost of a temp employee may mirror that of a permanent one, you get much more for the price than you do when you hire on your own. As a result, partnering with an MSP is typically a cost-effective approach, allowing you to benefit from their expertise while reducing your administrative, recruitment, screening, and training burden as well as your overall level of risk.

If you’d like to learn more about the cost-benefit of working with an MSP, the skilled staff at Apogee Managed Solutions can help. Contact us to learn more about our MSP programs today and see how our services can benefit you.

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