The decision-making process of hiring temporary employees

Abstract

Background and problem discussion The temporary employment industry has grown extensively during the past two decades since the market was deregulated. Companies today need to be flexible to meet fluctuating demand and economic climate in society which has made the market expand. When using employees not directly employed by the company there is a risk that long term effects appears that the companies have not thought of. Aim of study To create a model of what negative aspects companies should consider when making the decision to use temporary employees. Methodological framework The study performed through an abdicative literature study and with an empirical data collection method of a qualitative approach where we interviewed five hiring companies and one temporary agency on the decision of hiring temporary employees. Frame of reference Problem areas with the use of temporary employments were identified through four perspectives of the organization; the structural, human resource, symbolic and political perspective. The problem areas we address are organizational learning, motivation, risk of eroding human capital, belongingness and conflicts. These will be described and presented together with management control to counter the problems. Empirics The empirics are focused on what aspects the companies of the study considered when making the decision to use temporary employment, what the companies‟ different reasons for using temporary employment are and what they do to minimize possible negative effects. Analysis and conclusions Companies use temporary employees mostly to become more flexible, both numerically and in their competence. The companies in the study do not consider long time aspects, when they make the decision to hire temporary employees they see more to the direct costs. The more learning cost connected to starting up a temporary employee, the more efforts are made to involve them in social activities and make them feel they belong. The companies are acting reactively and deal with problems first when they appear. Their efforts that prevent or decrease the effects of the problem areas are most often not strategic decisions as much as a result of their company culture, the design of the job that is to be performed and the communication of the company.