Temporary contracts – flexibility or ‘hire and fire’?

The current situation is making many companies rethink their resources – which naturally also includes their employees. In some industries it is difficult to plan ahead. That is why those responsible are trying to reduce the basic workforce to a minimum and to absorb peaks in production or services with temporary staff. At first glance, this seems to make sense: The company only has as many employees as it needs at that time to handle the current order situation.

But on second glance, there are a number of points that need to be considered:

• Before making personnel decisions, a company should consider which activities are the core of the business in order not to burden customer relations. Experts agree that identification with the company is significantly higher among permanent employees than among temporary workers. It could therefore be counterproductive to use temporary employees for core activities, as the perception of the company by customers could suffer. In addition, the quality of the service provided may not be maintained if peaks in workload are absorbed by temporarily employed and therefore less experienced production and sales staff.
• Not all employees feel comfortable with fixed-term contracts. Members of generation Y (i.e. people born after 1985 and now in their thirties) were said to have more than 15 jobs by the time they turned 40. But this assumption is not necessarily true. The younger generations also value stability and predictability – perhaps to a lesser extent than the generations before them, but nevertheless. Yes, the hurdle to change is lower among the younger generations. But that does not mean that a lack of job security is perceived in a more relaxed manner. That is one of the findings of current youth research

So what can companies do?

They could focus on people who have made a conscious decision to be flexible in their work. These include interim managers, most of whom have very good training and wide-ranging experience. This enables them to quickly find new companies and tasks. However, it all comes at a price – interim management is not a one-euro job. Whether companies can actually achieve the expected savings with qualified activities, which they hope to achieve with temporary contracts, would therefore have to be checked.

What is the solution?

 Flexibility in work can also be accommodated with flexible work content. In the past, so-called ‘jumpers’ with a variety of skills were used where bottlenecks existed. This concept is not yet obsolete. All employees who are interested and have the potential to perform different tasks can be deployed wherever the need arises. This requires – quite in keeping with the times – an agile, project-oriented organisation. Thus, activities that form the core of the company can be represented and carried out by permanent, loyal employees. Other, strategically less important activities, on the other hand, could be handled by temporary workers. Alternatively, these activities can be outsourced, which creates flexibility in that only the services that are needed are called up.

As you can see, there are many good alternatives to converting permanent to temporary contracts. If you would like to know more: just give me a call!