What’s the Difference Between Temp, Full-Time, and Contract Employees?
Running a successful operation requires a rolling cycle of skilled labor. Some of the tasks essential to running a business must be done by employees who are well versed in the company’s goals and brand. Other potentially simpler tasks like creating a one-time mailer or brochure might be more suitable for temp or freelance workers which work minimal part-time hours.
There are also some project-specific positions with longer timelines in which the company could contract a professional directly or through a creative staffing agency. While this has many benefits, the contracted employee would not report to the company the way a full-time employee would. It would be an external resource that is not avidly present the partake in company culture, and the company’s growth. But it is a great avenue to take when a company requires a quick turnaround or expert consultation for a project.
One of the most important considerations for many businesses when it comes to taking on new labor is the cost of things like salaries, benefits, and payroll taxes. Sometimes the cost can be prohibitively expensive, while other times the top brass can mistakenly view labor costs as the best department to skimp on to increase profit margins. In creative positions like UX/UI design where the role of the employee(s) might not be well understood by hiring managers or executives, it’s all too common to take on new staff under the wrong kind of hiring agreement, which not only leads to dissatisfaction in the long run but also tarnishes the company-employee relationship for good.
At icreatives, we know all too well how easily companies can shoot themselves in the foot by mislabeling positions. We thought it would be useful to have an in-depth clarification of what exactly full-time, part-time, and contracted positions are so misclassification mistakes won’t happen. Learning to hire makes for better employment arrangements for the creatives and the company overall in the end.
What is Employment?
Let’s start with the absolute basics: employment is an agreement wherein a company or business forms a contract for work with an employee in exchange for some kind of payment. Think of a neighborhood lemonade stand as an example. Many businesses start out similarly to a lemonade stand, with a sole proprietor taking on the risk and performing the everyday tasks of the business. But what happens when word gets out and thirsty customers start to flood the lemonade stand reliably over time? The stand is solidly in the market, and that sole proprietor isn’t going to have time to buy lemons, sugar, and cups as well as sell lemonade and make sure the signs are still up.
We live in a labor market where demand is king. That means companies often have control over defining a position and dictating what the hours will be. Companies too frequently misjudge the delicate balancing act of taking on new employees and try to, for example, get full-time labor out of a part-time worker. It’s understandable that that algebra seems like it would save some coin, but it’s also important to know that a part-time employee can become frustrated and overworked. Then having to hire a new part-time worker and wait longer for a task to be completed because the previous employee isn’t in the office as often can lead to increased costs in the long run. Realistic hiring is imperative, but you have to have a clear idea of what different classification options are available when creating a position to truly serve the business’ best interests.
When most people think of getting a job, they’re imagining full-time positions. That means a 40-hour week and benefits like health insurance, paid sick days, retirement plans, and overtime. For businesses, creating full-time positions without careful consideration can be disastrous. The company should have more than enough in the hiring budget to take care of matching 401(k) or other retirement deposits, pay for sick days and provide health benefits, and dole out a salary commensurate with the skill and performance of the worker. But they should also take care to not establish full-time positions for assignments that aren’t worked on every day or only take so long to perform.
Full-time employees form the backbone of the company. They should be hired to take care of the essential tasks and the work that the company’s identity comprises. One common mistake is for art department creatives to be hired in temporary or contract positions when the business is going to need dedicated people working on their branding and marketing every day of the week all year-round. That’s not to say temps and contract workers don’t have a place in the art department, however.
What Are Temp Jobs?
The difference between temporary employees, or temps, and contracted ones is a bit finer than the one between these two positions and full- or even part-time work. Temps are generally taken on when the company needs someone for a shorter period of time to perform tasks that don’t require lots of training or special knowledge. Temps might be hired to help with a sudden increase of customer phone calls, for example. Workers who have some additional time or want to work up some extra cash sometimes like finding temp work through an agency because they don’t have to make a big commitment to a new employer.
Temp positions and contract ones can both be short-term, but the important difference is that temps are hired for a given time and contract workers are hired for a given task. Temps might be paid weekly, bi-monthly, or monthly just like the longer-term employees while contract workers are generally only paid once their work has been completed. Temps can be a great way to relieve stress on longer-term staff, especially in art departments and creative companies where the heavy lifters are needed for a huge shift in marketing or production.
What is a Contract Employee?
The name can be a bit misleading since full- and part-time workers are also taken on with a contract to hire after a successful interview and vetting process, but independent contract workers are generally proprietors or employees of another company altogether who are hired to perform certain tasks. Employees taken on for contract jobs have their own training and expertise but they are not under the direct authority of the company, although of course, the company does make certain demands of them.
Contract jobs can also be made to last for defined time periods rather than by the job, but it’s less common. Generally, this only happens when there’s a project to work on but there’s no way of knowing how long it will take to complete. Unlike temp workers, contract employees are usually taken on for a month or longer. There are also long-standing contract jobs for things that need doing on a regular but not constant basis, like pest control or printer maintenance.
Temp Jobs vs Contract Jobs
Let’s operate under the assumption that full-time positions are ideal. Naturally, it’s preferable to have a permanent trained staff that is dedicated to the success of the company’s work, especially for creative and design production. However, it’s not realistic to say every position can or even should be a full-time one. So, when should you use temps to fill the gaps and when should you contract the work out?
Temp jobs are commonly used as fill-ins when a permanent staff has to take leave. This can be for medical or personal problems, or it can be caused by sudden changes in circumstances. You might think that temps are impossible in creative industries, but if you have a large pool of well-vetted talent at the ready like icreatives does, it is in fact possible to use a temp UI or UX designer if the full-time person needs to take some leave.
Contract jobs are created to take care of specific tasks or last for a certain amount of time. They are a great way to test out a position before making it a full-time permanent one and they are also a good way to get consultants or specialists in to help with a project. Imagine taking on an animator to make some content for a particular product. Once they have done their job and you no longer need any animation work done, payment is rendered and you part ways. Contracts may also be made renewable and talent retained that way on a de facto permanent basis.
What is Contract to Hire?
Just like contracting can be used to vet potential permanent positions, temp jobs are sometimes used to test out the usefulness of either talent or a position on the full-time staff. This arrangement, called contract to hire, offers lots of flexibility for both the company and the employee. Generally, these contracts to hire define a certain time period during which the work will be done. This is often viewed as a trial run by both the company and the worker. In our opinion, it’s best for the company to be explicit about a position being contract to hire to avoid frustrating the talent and also to make sure they are putting their best effort forward during the assigned time period.
We’ve seen contract to hire used successfully in the following ways:
- Testing New Roles
If you aren’t sure about the necessity of having permanent staff for a given duty, try making a contract to hire position. It’s usually not to test the particular person as often as it is to see if the role is helpful for business.
- Lighting-Fast Onboarding
Beyond just testing out a role, many of the largest clients who have used icreatives for contract to hire have done so to circumvent longer and more tedious interview processes when they need high-quality creative talent to fill an immediate need. This is especially easy when the employees have already been vetted by a creative staffing agency.
- Adjusting the Hiring Budget
Employees working under a contract to hire agreement generally don’t receive the benefits that full-time workers do, which means these agreements can be a good way to have the employee taken on and paid while the budget can be adjusted to account for those benefits if or when the employee is hired full-time.
Contract to hire can be used in a variety of creative ways to make things easier for the company and more agreeable for the worker. It can open lots of doors on both sides and we highly suggest it at times when there’s work to do but the exact role is not yet defined. Remember that even if the creative is taken on in a contract to hire agreement or even as a temp, rights to their product are most likely still company property as works made for hire.
When to Use Temps and When to Use Contract to Hire
While contract to hire is a fantastic way to try out new things, temps are more effective in a slightly different way. We’ve seen temps who excel at their jobs hired on as full-time workers countless times, but that doesn’t mean the company was using that temp role to vet the potential worker the same way they would have done with a contract to hire position.
If you have a full-time worker who has a health issue, is going through pregnancy, or just needs to take some time off, a contract to hire position doesn’t make much sense. But temp workers to fill-in are perfect for such a situation. Temps may also be paid by the hour, so for tasks that are not well-defined enough by nature to know when they will stop, temps are a great way to get just as much labor as you need and avoid paying people to sit around without anything to do.
Cons of Temporary and Contract to Hire Work
Despite all the advantages we’ve described of both of these alternatives to full-time, traditional hiring, they each have their respective disadvantages as well. For example, temp workers may be less skilled or less motivated in their work due to the short-term nature of their employment. It’s important to be upfront about expectations on all sides. At icreatives, we comb through portfolios to make sure we can guarantee our creatives 100%, but it is a possibility that you will encounter less experienced and skilled talent if you don’t use a creative staffing agency. Here are a few more cons to temp jobs from both the company and the worker’s perspective:
Cons to Temp Jobs:
- Benefits like sick leave and retirement funding do not accrue
- The need for the position can change rapidly, making it hard to know when the position will be or should be terminated
- Frequent training may be required as new faces come into new roles, which can be dull and time-consuming for both the employer and the employee.
Despite these cons, temp jobs are still a great way for businesses to stay flexible and keep talent around when they need it. For the employees, they can be a great way to make extra money and start building up a new skill set. Similarly, contract to hire can bolster skill sets, but there are a few things that aren’t ideal.
Cons to Contract to Hire:
- You might need to start the whole process over if the candidate is not ideal or the role is not well-defined.
- Attracting top talent to contract for hire positions that don’t have benefits might be difficult, although using a creative staffing agency can solve this problem.
- It might be a temporary patch for either the company or the worker, meaning they could be taking the money or the work until a better arrangement comes along.
If the company dangles permanent employment out like a carrot on a stick, they may just be trying to get as much work as possible out of the employee. If the employee is listless or uncurious about what the role will or should look like, they may not be in it for the long haul.
Using a Creative Staffing Agency for Hiring
Whether the role is a traditional full-time role, a part-time or temp job, or a contract to hire agreement, a creative staffing agency can make sure everything runs smoothly. All of these hiring styles rely on a properly vetted candidate and a creative staffing agency like icreatives already takes care of that aspect. Designing a long-term plan and hiring strategy for creative roles with a staffing agency will make things faster, easier, and cheaper in the long run.
Running any kind of business means adjusting to new conditions on a nearly constant basis. Getting the talent you need when you need it is crucial, and that means having a creative enough hiring strategy to get creatives where you need them when you need them without blowing huge amounts of money on a bloated hiring budget.
From the perspective of a creative, temp jobs or contract to hire arrangements can be a great way to learn new skills and get some exposure to life in an art department. For the company, defining new roles and getting specifically skilled talent can be done much more easily and reliably using contract to hire or independent contractors. It’s just as important to know the difference between position definitions as it is to know your product and target market, and if you still need a little help in that regard icreatives is happy to help.