A prime objective of most organizations is to reduce expenses while increasing productivity. While there are many ways to achieve this goal, one of the most popular methods is to examine payroll costs. Simply put, an organization that can align their profit to labor hours will operate with greater efficiency.
For many organizations, the complexities of balancing payroll expense against labor needs present a constant challenge. Although today’s labor force offers more choices than ever before, it is still necessary to determine which option truly presents a solution for your organization. Before you make your next staffing decision, take a moment to consider the pros and cons of your potential options.
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[contact-form-7]Six Key Categories
Full-time – Staffing an organization with full-time employees can be the costliest of options, but offers a high return. Full-time work establishes a primary commitment between both employee and employer, enhances corporate culture, and reduces unnecessary turnover. Since benefits can be key motivators, employers often have a larger pool of qualified candidates from which to choose. In addition, employers have greater influence in setting role expectations and performance standards.
Part-time – While part-time opportunities greatly reduce the financial drain that benefits create, it also results in a limited number of eligible employees. Those individuals in need of additional compensation will likely turn to a second job reducing the availability for shift or overtime flexibility. Since benefits are usually not included, the risk of losing higher performing talent for nominal wage increases elsewhere is a point to consider.
Internship – Individuals within this pool of candidates often come with the latest in academic knowledge, but frequently lack hands-on or tenured work place experience. So, while internships can be offered as both non-paid and paid, be prepared to offer additional training time and appropriate mentorship from your existing workforce. The tradeoff between increased labor hours should be calculated against the required supervisory time invested by your existing staff.
Outsourced – This can be an excellent resource for businesses which experience seasonal upswings in labor needs or rapid growth. While the direct cost is increased in order to afford a profit to the staffing agency, it can provide an excellent opportunity to pre-screen employees for future full-time employment or request a replacement for an underperforming employee. It is important to remember that outsourcing agencies have multiple clients and top performers are often assigned to higher paying contracts.
Contract – Much like an outsource option, Contractors can provide needed expertise without permanent commitment. Keep in mind, that many contractors reserve the right to provide services for other organizations and may prioritize your needs below that of someone else. In addition, be very clear that you comply with IRS rules in determining the status of your employees. A misinterpretation can result in costly fines.
Volunteer – While this may sound like a dream come true to any business owner, control over volunteer staffing can be complicated. Also, it is critical to understand that the work performed by volunteers creates liability for the organization in every legal sense possible including actions, errors and omissions. Conversely, the ability to hold an individual accountable for their actions is much more tenuous since role retention and pay are not key factors in this equation.
Determining which staffing option is right for you can be complicated. Before you make a decision, reach out to one of our Human Resource experts here at HR Affiliates. We are here to help you find the solution that best suits the needs of your organization.
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