Managing your Temporary Workforce: Compliance, Contracts and Costs

Managing your Temporary Workforce: Compliance, Contracts and Costs

“Temporary workers are likely to make up one-fifth of workforces by 2022.”

For an organisation that has determined a requirement for a temporary workforce to be hired on a regular basis, it is essential that managing temporary workers is done effectively.

Experienced in managing all three of these elements of a successful temporary workforce for our Clients, the team at Cohesion have collated a check list of things for you to consider when managing your own workforce.

Temporary Worker Compliance:

  1. Visual compliance – make sure that the temporary worker that shows up is actually the person whose details you received from the agency. Request copies of a worker’s photographic identity documents from their agency before they start work.
  2. Agency compliance – conduct random audits of your suppliers and their workers. We suggest quarterly audits where you check as a minimum right to work documentation, and the most recent three years of references.
  3. Compliance renewal – where you engage with temporary staff who then get ‘lost’ working in the organisation and are still with you many months later – make sure that none of their compliance has expired.
  4. Day to day compliance – agree a set of SLAs with your supplying agencies and monitor to ensure that they are adhering to them for example ensuring that recruitment agencies don’t send speculative CV’s or waste manager’s time unnecessarily.
  5. Internal compliance – once you have set the laid the groundwork for your relationship with recruitment agencies make sure you communicate effectively internally so your Hiring Managers comply with what you have established. A strong internal promotion is essential.

Agency Contracts:

  1. Do not accept individual agency terms and conditions. Draft your own for their agreement – make your requirements of the supplying agencies part of your contract with them, and include financial penalties for breach.
  2. Late timesheets. Build something in to your contract with suppliers to ensure that all workers timesheets are submitted in a timely manner, which makes life easier for your finance team and also means you won’t be presented with a bundle of legitimate timesheets months later.
  3. GDPR – Contractually inform your agency suppliers how you will be processing their temporary staff data – don’t sign individual data processing agreements with individual agencies. We suggest supplying all agencies you work with, with your data protection policy.
  4. Minimum Reporting requirements – require, as part of your contract with them, that agencies report on details of all existing temporary workers, the duration of their assignment, details of where and what work they are doing and the reason why the temporary worker was required.
  5. Think carefully about the optimum number of agencies to contract with. Too many contracts (and supplying agencies) can make it difficult to get the most favourable terms and too few can compromise the ability to fill key roles in your organisation with the best talent.

Temporary Staff Costs:

  1. Temp to perm fees – it is reasonable not to pay a temp to perm fee after a 12 week assignment. This also applies to transferring the temp to an internal contract.
  2. Demand transparency – anything other than the payment to the temporary worker plus the three statutory elements (WTD, ENI & auto-enrolment) is margin – even if the supplying agency calls it an admin fee. During a recent cost review for one company we found a temp being paid £9.75 where the client was being charged £17.66 an hour – a 48% mark-up on costs!
  3. Compare temp spend against permanent vacancies – are you working hard to recruit permanent staff where your temporary spend is highest?
  4. What are your internal rules around extending temporary contracts? Any temp contract extension is a continuation of agency margin fees.
  5. Overtime can be a creeping cost on many contacts so be clear on the maximum weekly hours you are willing to pay for. If you are allowing overtime then be clear what rates are applicable – even if the worker pay rate is enhanced, there is no reason that the agency margin should be.

There are many benefits associated with the provision of temporary workers, which often make it one of the more obvious recruitment options at an organisation’s disposal. However, appropriate use goes beyond allowing hiring managers to contact a few agencies – managing temporary workers effectively and strategically is key.

The “Three Pillars of Temporary Workforce Management” are imperative for effectively managing temporary worker supply to maintain business as usual, as well as allowing you to make more strategic decisions as to their use within your organisation.

If you’d like more information on the provision and management of a temporary workforce – please feel free to contact a member of the team.