There has been a growing trend in many SA organizations to take on temporary staff instead of employing them permanently. The convenience for employers in doing this, including being able to call on resources as and when required, is often matched by the cost savings, e.g. not having to contribute to pensions, health care, etc. Alan Low MD of Purchasing Index tells SmartProcurement that Setting up temporary recruitment agency agreements was often the preserve of HR departments, without the active involvement of Procurement.
" Many of these arrangements lacked a proper commercial foundation and many have been in existence for years without regular formal testing of the market place. PI has evidence that the longer the agreement has been in place the more the charges may move above the market average. In situations where there is a single Agency agreement how many sub contracted Agencies are involved in finding suitable staff, especially for specific skills requirements? What does this cost the organization? PI has found examples (both here and overseas) where such layered Agency charges account for up to 60% of the daily rate of the candidate.:
The advantages of convenience and lower costs are being whittled away by SA legislation. Coupled with this many skills are already or are becoming in short supply. This is particularly true for technical staff, such as engineers, artisans, etc. but it can also true for specific requirements where there are tight deadlines to be met and productivity is an important issue. This has long been realized in the IT environment where many in-house IT departments ask for specific candidates, who have a knowledge of in-house systems and procedures and don’t have to ‘learn the ropes’ when they start work.
Every large or medium sized organization has a core of temporary staff who have been working off and on for years. Are they still temps? What intellectual property would an organization lose if they left? How would they fill the ensuing gap with similarly skilled or productive staff? Why is the Agency still charging the same fees as it did when the candidate started all those months (or years) ago? Do organizations arrange for a hand-over period before the skilled temp leaves? These and many other important questions PI will be seeking to answer in its forthcoming Temporary Recruitment Benchmark report.
In some departments, e.g. IT & Accounts, temp staff may effectively be running parts of the department and may be more valuable than their permanent colleagues. So valuable, in fact, that they may have been upgraded from temp staff to consultants, as PI has found in a number of organizations!
If you would like to discuss participating in the forthcoming Temporary Recruitment benchmark and find out how your organization compares with your peers in terms of handling temp staff, how much you pay your Agencies and a host of other matters, please email me, Alan Low, at email@example.com