Pros and Cons of Hiring Temp-to-Perm Employees

Jun 12, 2019

Temp-to-perm hiring, as you might be aware, refers to the strategic recruitment of job candidates where they start as temporary employees with the hope of being retained permanently. Also called temp-to-hire, the recruitment concept is designed to help employers gauge the suitability of temporary employees to the organization. As such, a large number of businesses tend to rely on temp-to-perm hiring as it provides the opportunity to either retain or release employees after a specific duration. Over the years, the temp-to-hire recruitment model has grown in popularity, more so due to the need to reduce employee turnover in organizations.

Since replacing employees can be expensive and time-consuming, organizations have resorted to temp-to-hire as a way of permanently hiring employees who are compatible with the company and its values. Adapting such a recruitment model has several benefits both to the employer and employee. In this article, we will discuss important tips on making the temp-to-perm model successful for your organization while also in-depth discussing the benefits and disadvantages of the recruitment model. 


Temp-to permanent hiring in a nutshell

On top of being costly, employee replacement can be time-consuming; consequently affecting the progress of an institution. The competitive nature of the labor market has made it increasingly difficult for businesses to retain their top performing employees. The same way that corporations want to hire the best staff in the workplace, employees, too, want to be hired by leading companies that offer several perks and career growth opportunities.

Since the turn of the century, companies have generally struggled to retain their best employees. However, replacing top performers is no walk in the park. For a replacement to be successful, the new employee must maintain a high level of performance while also observing the company’s culture and internal regulations. Through the use of temp-to-perm hiring, it is easy to determine whether an employee is suitable for the organization or whether the recruitment team should look elsewhere.


How to implement the temp-to-perm recruitment model successfully

For the temp-to-hire recruitment model to succeed, it is important to make the temporary workers feel like part of the larger team despite being hired on short term contracts. Remember, the whole idea of hiring on a temporary basis is to determine the suitability of the candidate to the job. As such, you should observe the following steps to ensure that you create an environment that allows temporary workers to thrive.


  1. Make relevant introductions

When hiring on a temp to perm basis, it is critical to ensure that temporary workers are properly oriented and introduced to the relevant stakeholders. Unfortunately, some organizations treat temporary workers without regard and fail to introduce the new workers to coworkers and departmental heads. Without the right orientation, it is difficult for an employee to succeed regardless of the level of skill or experience.


  1. Assign a point person or a mentor

As a new addition to company staff, the temporary employee will need some guidance, especially on how things are run in the internal environment. Since the work environment is usually hectic, it is important for temporary employees to have a point person who will assist and offer guidance when need be. It is advisable to assign an experienced team member preferably in the same department to act as a mentor to the new employee on trial.


  1. Provide adequate resources

Just like other employees, temporary workers, too, need adequate resources in order to perform. Some institutions tend to treat temporary employees differently to other staff members. While some might argue that investing in temporary employees can lead to losses in case they are not retained, it is important to create an environment that promotes the success of all employees regardless of contract duration.


  1. Be clear on the roles and responsibilities

Just like their permanent counterparts, temporary employees also need to perform at a high level. Therefore, ensure that recently hired temporary employees are fully aware of their short term goals, roles, and responsibility. It is only after communicating the roles and responsibilities that an HR manager can determine the suitability of a temporary worker to the organization.


  1. Be transparent

To motivate a temporary employee, it is important to remain transparent and realistic enough about the chances of the role becoming permanent. It is easy for temporary employees to lose motivation, especially when unaware of what it takes to make the job permanent. As such, it is crucial to notify temporary workers on what is expected in regards to performance in a bid to ensure they remain committed and motivated while at work.


  1. Check on interpersonal relations

It goes without saying that the work environment requires maximum cooperation from all team members. Thus, it is important to check on how a temporary employee interacts with colleagues. Even more importantly, the HR manager must ensure that all team members help temporary workers to adapt to the corporate culture. A highly skilled employee working in an unsupportive and uncooperative environment is likely to underperform. As such, to get the most out of your temporary employees, it is advisable to create a conducive environment that allows for adequate collaboration between colleagues.

Now that we have discussed the basics of successful implementation of the hiring strategy, we can move on to analyze some of the benefits of temp to permanent hiring. 


Benefits of temp-to-permanent hiring 

Practical evaluation

As you might be aware, there is no hiring process that can always guarantee perfect outcomes. In fact, it is not uncommon for candidates who appear perfect on paper to falter days or weeks after signing the employment contract. Due to this, it is important to take extra caution, especially when looking to replace top performing staff. Luckily, the temp-to-hire recruitment model allows for practical evaluation of a candidate over a specified duration.

The temp-to-perm model ensures that an employee is thrust in the demanding, high-pressure work environment before being offered a permanent contract. In the trial period, the employee will be assessed based on how well he performs his duties and interacts with other staff. After the temporary contract has run out, the HR team can then decide whether the cooperation was fruitful enough to warrant a permanent contract. Instead of relying on potentially misleading resumes and testimonials, the temp-to-permanent recruitment model provides a valuable opportunity for HR to monitor and examine new recruits practically. 

Reduces legal risk

In the 21st century, legal battles between employees and employers over contractual obligations have become all too common. To avoid this, companies have attempted to shift to temp-to-perm contracts which have significantly reduced legal risks. If an HR manager isn’t impressed with an employee’s performance over the trial period, then he or she will not be inclined or required by law to extend the contract once it runs out.

Legal fees are usually expensive and time-consuming. Due to this, most organizations have, in recent times, opted against offering new recruits permanent contracts in a bid to investigate and determine the compatibility of the employee to the organization’s culture. On most occasions, the termination of a permanent contract weeks after employment usually leads to a legal battle, especially in the event of firing without probable cause. 

Reduced employment costs

Permanent employees are usually eligible for many work-related benefits such as paid leave, retirement packages, and medical coverage. However, although employees on temporary contracts are entitled to overtime pay and workers’ compensation where applicable, the lack of potentially costly benefits make temporary contracts convenient in the short term.

Once a temporary employee is offered a permanent contract, he or she becomes eligible for a couple of work-related benefits. However, the company can avoid such costs when investigating the suitability of the employee to work for the organization. Therefore, as can be seen, institutions can save a lot by adapting the temp-to-hire recruitment strategy as it helps to save funds that would otherwise be used to sort employee benefits.

Easy transition

The temp-to-hire agreement is massively important, especially when it comes to proper transition. If the organization opts to retain a temporary employee on a permanent basis, it can be easier for the employee to settle down and work with ease due to the adequate experience obtained from working in the same position.

Transitional periods, as you might be aware, are highly sensitive since they can affect the performance of an organization. Employees working on a temporary basis are well placed to succeed since they understand the internal environment, rules, and regulations of the corporation. This ensures that once offered the long term contract, they can get straight to business without needing further orientation or introductions.

Improved performances

Normally, temporary employees are usually determined to do everything to secure the post permanently. As such, businesses that use the temp-to-perm recruitment strategy usually benefit from the high-performance levels of temporary workers looking to impress.

Having motivated, hardworking temporary employees could help motivate your permanent employees to improve their overall performance levels. It is not unusual for permanent employees to become complacent over time; however, the presence of hardworking and highly motivated temporary employees can help challenge permanent workers to improve their levels.

Helps to reduce employee turnover

As mentioned earlier, employee turnover is an area of great concern, especially due to the highly competitive nature of the labor market. Since every employee is constantly looking for greener pastures, having a temp-to-hire recruitment model in place will ensure that you hire employees that actually fit your organization’s culture.

Offering permanent contracts can lead to unwanted outcomes, more so when employee performance reduces over time. However, a temporary contract provides enough time to investigate employees from both personal and professional perspectives which help to determine whether they are fit enough for the vacant jobs.

Guarantees performance

Some applicants exaggerate their skills on their resumes and, if hired prematurely, they could end up costing the company in both the short and long term. A trial period helps to counter check several skills listed in the employee’s resume as he or she will be required to maintain a high level of performance whenever at work.

For the HR team to extend the contract, the positives of a temporary employee must outweigh the negatives. This helps to ensure that a valuable member is added to the team. Therefore, as can be seen, temp-to-perm hiring provides management with the assurance that a high-performing and credible professional has joined the team.

Helps an organization retain top talent

On some occasions, an employer might rely on temporary workers to replace employees on leave. Although the temporary employee will be aware that he or she is filling in for a returning staff member, the opportunity to work and join the organization’s temporary staff team is enough motivation.

Having a database of temporary employees can help a firm when looking to make replacements. Even better, an organization using the temp-to-hire recruitment model can use its database to select temporary employees who can step in during emergencies which go a long way in preventing delays, additional costs, or deviations from initially set strategies.


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Helps determine an employee’s attitude

As most HR managers will agree, not every work environment is suitable for all employees. For some employees, a high-pressure work environment is not attractive. Other employees might be unappreciative of some cultures or internal regulations that are key to the performance of an organization. To avoid dealing with premature resignations or reduced motivation, some employers have shifted towards temp-to-perm hiring.

A Temp-to-hire recruitment model plays a pivotal role in reducing employee turnover as only interested employees will seek a permanent contract. Although employees might be enthusiastic about a job at first, the motivation can reduce over time, especially if they dislike the working environment or organizational culture.



Temp hiring helps businesses to maintain the much-required flexibility when it comes to labor. With temporary workers available upon request, businesses can change their strategies with the knowledge that experienced personnel is on standby.

Also, the blend between temporary and permanent employees usually helps an organization to maintain a firm labor structure. To put it in perspective, most employees, especially the high-skilled ones may believe that they are indispensable. However, the availability of temporary workers helps the organization to set up and maintain internal regulations that are applicable to everyone. This helps to maintain a positive structure that allows for professional interaction, cooperation, and communication of employees.


The disadvantages of temp-to-perm hiring

Although temp-to-perm hiring has several benefits, the recruitment strategy also has its downfalls. However, with the right strategies, the disadvantages can be nullified to ensure that your business thrives with the temp-to-hire recruitment model. Read on to find out some of the disadvantages associated with temp-to-perm jobs.


Training needs

No matter the experience or level of skill, any temporary employee will require adequate training to fully understand the scope of the job, and the position-related responsibilities. Since every job has unique tasks, it is nearly impossible for a new employee to fit in perfectly without any orientation or training. The need to train can occur severally, especially when relying on different temporary workers to fill in the vacant positions. The training can be time-consuming, especially for temporary employees who find it hard to settle into the new environment.


Motivation issues

For some temporary workers, working alongside permanent employees can be frustrating, especially when performing the same tasks but receiving different payments and benefits. As mentioned earlier, temporary workers usually have reduced benefits as employers look to hold off on perks before the position is made permanent. The lack of enough benefits can reduce the motivation of temporary employees, especially those who work alongside permanent workers for long periods.


Work environment

Unfortunately, a lot of complaints have been raised when it comes to interactions between temporary and permanent workers. According to Susan Joyce, employers must take extra caution in their handling of temporary workers to ensure that they work in a progressive and highly inclusive environment. Without adequate care, temporary workers can be misused or overworked while at work which, in most cases, can lead to legal issues.



Unlike permanent employees who must maintain a high level of performance to retain their jobs, some temporary employees perform poorly, especially if under motivated. A permanent worker is normally more motivated to work hard to retain the position. However, for temporary workers, finding the motivation to work can be difficult, especially when performing the same tasks as the better paid permanent workers.



Uncertainty in the workplace can affect the performance of both the organization and its employees. Due to the need to examine the performance of temporary workers, employers tend to avoid starting on sensitive projects until they are certain that the employee can successfully manage the tasks. This can lead to delays, especially when it comes to achieving organizational goals. Moreover, the uncertainty that arises from temporary employment could negatively affect the performance of employees due to anxiety and the fear of not receiving a permanent contract.


Safety concerns

Temporary workers usually have increased chances of sustaining work-related injuries which, if severe, can lead to legal action. A temporary worker can be overwhelmed by orientation information and innocently forget important, safety-related issues. However, dealing with permanent employees is different since they know the institution and the various risks associated with the work environment.

Important factors to consider before permanently hiring a temporary worker 


For an organization to thrive, all employees must work together in a bid to achieve the initially set goals. Therefore, before a temporary worker is offered a permanent contract, it is important to consider overall attitude in regards to work, colleagues and organizational culture. A high performing employee with a bad attitude can ruin the work environment and cause staff unrest. 


It goes without saying that performance should be the main determinant of permanent employment. Before making that hugely important decision to hire on a permanent basis, be sure to always check on the performance and dedication of temporary employees. If unimpressed with the performance, then you should consider offering a temporary position to another prospect. However, it is advisable to avoid committing to a permanent contract, especially if you are not convinced by the worker`s capacity to perform on a full-time basis. 

Interpersonal skills

The workspace should be respected by everyone including temporary workers and casual laborers. Before hiring on a temporary basis, you should notify the employee on the various indicators that will be used to determine whether a permanent contract will be offered. As such, you should keep an eye on how the temporary employees relate with other colleagues. Hiring an employee with poor communication and interpersonal skills can negatively affect the progress of your organization. 


Put simply, no employer would want to hire an individual with no professional values. Therefore, before deciding to hire on a permanent basis, check on behavior such as punctuality, respect to rules and regulations, courtesy and professionalism. Since a permanent contract is legally binding, making a wrong choice can leave you helpless as you cannot fire permanent employees without proper reasons. Due to this, it is advisable to be extra keen when assessing a candidate`s behavior to ensure that he or she is compatible with the organization. 


Once offered a job on a permanent basis, a highly dedicated temporary worker will almost definitely remain committed. Always check on how dedicated an individual is when it comes to performing his or her tasks. Fully committed employees are those who inquire severally and always seek guidance in areas they might be unsure of. Without enough commitment and dedication to the job, employees are likely to quit, especially when better opportunities present themselves. Therefore, before hiring temporary workers on a permanent basis, we recommend observing the commitment levels to ensure that you hire individuals that are genuinely dedicated to working for your organization.

As can be seen from the discussion, there are many benefits associated with temp-to-permanent hiring. Promoting temporary staff into permanent positions ensures that only qualified and highly suitable employees are hired. To get retained on a permanent basis, temporary workers are usually motivated to maintain high levels of performance.

By hiring on a temp-to-perm basis, you significantly increase the chances of your organization to achieve its goals since only the best workers will be retained. Promoting high performing temporary workers goes a long way in ensuring that you only deal with skilled and fully committed personnel. Impressively, the temp-to-hire recruitment model guarantees that you only recruit employees that suit the core values of your organization.

Therefore, although no recruitment method is considered to be entirely foolproof, using the temp-to-hire recruitment model ensures that you attract and retain the best personnel in the market. Even better, you can dismiss candidates who fail to impress during the trial period without facing legal action. While temp-to-permanent hiring has numerous benefits, it does come with its flaws. However, by ensuring that you keep your temporary workers fully motivated, you will be well placed to find the best-suited candidates for any position.  


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