Companies that grow rapidly require flexible approaches to their workforce. There are times when bringing in a permanent employee isn’t always feasible — but working with a temporary employee is.
Truth be told, it’s not uncommon. In 2020, the United States temporary workforce was estimated at 13.6 million. Hence, strategic HR managers have temporary employment contracts to manage them effectively.
Is the contract unfamiliar to you yet?
In this article, we’ll discuss this kind of employment and add some good reasons for using a temporary employment agreement over an ordinary employment contract.
Let’s start!
What is temporary employment?
Temporary employment is a work arrangement in which an employer and employee have a short-term contractual relationship. The commitment of both parties only lasts for a specified period or when an assignment is finished. Employees of this type of employment are also sometimes called
- Temps
- Interim
- Contractual
- Freelance
- Seasonal
- Outsource
Temps could be hired through staffing agencies while some are self-employed contractors (a recent HR trend these days is to take advantage of the gig economy). If you’re wondering why you should hire interim employees, here are three key points it offers.
Flexibility
The main benefit of temporary employment is its flexibility. With temp workers, you have the freedom to adjust your staff size quickly as needed. That means you can increase or decrease your staffing levels to handle unexpected workloads.
Expense reductions
Since temporary employment are effective for only a specified time, you don’t really need to worry about onboarding (including background checks and training expenses) to contract termination costs. As temp workers don’t necessarily receive benefits, their compensations are usually lower than those of regular employees.
Gap coverage
If you have an employee out on leave or any unexpected time off, hiring a temporary worker can help fill the gap so that your team isn’t overwhelmed in their absence. Temporary employment is a convenient solution to manage and fulfill a specific need that the company has identified. Then again, it’s also a good chance to try out new talents if you need someone with new approaches and different skills.
However, even though they’re temporary employees, they’re still subject to regular employment laws and regulations. So to govern this kind of employment relationship, temporary employment contracts are used.
Differences between a temporary and regular employment contract
An employment contract, depending on the working relationship, can be further categorized as a regular or temporary employment contract. Here’s their difference:
- For starters, regular employment contracts are meant for permanent employees so they usually don’t have any expiration dates. With regular employment contracts, it’s often assumed that the employee will continue working with your organization until either party chooses to terminate the agreement.
- Meanwhile, a temporary or fixed-term employment contract isn’t intended for a permanent position but for employment in a predetermined amount of time. It can usually last anywhere from one day to several months and typically involves hiring on an as-needed basis or for specific projects or tasks. Generally speaking, employees hired under fixed-term contracts are not eligible for any benefits beyond those outlined in their individual contracts.
The sections of a temporary employment contract are similar to a regular employment contract but now include the specific start and end date of the employment.
- Employer-employee information
- Employment terms (specify when the employment begins and ends or hours of work needed)
- Compensation
- Termination clause
- Confidentiality
- Intellectual Property
- Governing Law and Jurisdiction
So when should you choose a temporary employment agreement over an ordinary employment contract? A temporary employment contract can be the perfect choice if you’re in these certain situations:
- high-demand periods like holiday seasons where there is a short-term, increased workloads
- when permanent employees are unavailable (reasons such as maternity/paternity leave, vacation, prolonged illness)
- one requires specialized knowledge for a specific project
- project-based work or one-off assignments that don’t require ongoing effort
- urgent staffing requirements since hiring permanent employees can be a lengthy process (multiple rounds of interviews, background checks, and onboarding)
Also if you need to draft employment agreement right away — you can jump to this employment contract template.
Hiring globally with temporary contracts
Back to what we mentioned earlier, growing companies need to be flexible with their strategies for their workforce. An option that may provide the flexibility and speed you need is global hiring with temporary employment contracts.
However, hiring temps from another country also means understanding and abiding by the employment laws in that country. Let’s take Estonia for example and see how they regulate entry into an employment contract for a specified term.
According to the Employment Contracts Act, employers are required to inform employees in writing of the duration of employment contracts, related to the temporary, fixed-term nature of the job. However, the maximum specified term is only up to 5 years. Consecutive terminations and extensions of employment contracts are prohibited by law.
Now the thing is, hiring globally sometimes implies onboarding a lot of people globally. That’s when you’ll need a contract lifecycle management like Avokaado. An HR contract software that automates employment contract workflows to ensure compliance with global employment laws — and so lets you manage a lot of employees.
How HR can manage a lot of people with Avokaado
HR often need to manage a large number of employees. Thankfully, there’s Avokaado, a modern HR software that can make your management more efficient. Here’s how:
- You can draft temporary employment contracts in no time.
Starting from scratch in creating your own HR documents like employment contracts and NDAs? That’s so time-consuming! With Avokaado, you can access templates that are readily available in the platform and configure them to be temporary employment contracts.
- You can create new HR documents in aDoc format.
Why care for aDoc? Because it’s a smart document format for more efficient and secured contract management. Every document you create from Avokaado’s template is automatically an aDoc and it only means one thing — you can control all aspects of your contracts from initiation (drafting) to completion. Let us share the specifics:
- Avokaado collaboration in every aDoc is dynamic and transparent. You can add all collaborators quickly as you need them at different stages of the contract workflow. You can assign colleagues as viewers and editors so they have their respective rights to access the document. For transparency, there’s a downloadable audit trail to view the exact changes made.
- Every aDoc can automate the contract workflows from approval to signing. You can add stakeholders and hiring managers to review and/or sign your prepared temporary employment contract — all in one go with their specific assignment. You don’t need multiple reminders.
- Custom branding in Avokaado’s aDoc is a breeze. Another notable feature of aDoc is its focus on the design and appearance of the document. If you need your temporary employment agreement to have a consistent look and style elements, you only need to customize your template once and every aDoc you’ll create based on it will have your pre-determined styles.
- Already added your signatories? Avokaado aDoc lets you collect digital signatures without switching apps — yes, inside the same platform where you drafted. Wherever you hire a temp, you’re sure to get the employment contract signed fast. Especially in today’s world of temporary and remote workers, e-signing adds an extra layer of convenience and security that helps manage contracts across multiple countries.
You can keep track of all temporary employment contracts in one central workspace
Having a smart contract dashboard in place makes all the difference in how you manage human resources. Avokaado’s workspace enables central management of all agreements (and the 360° view lets you see your entire company’s contracts as well). So you’re always up to date with your temporary employment contracts because the dashboard will provide you with real-time insights into the progress of each employment contract as well as if any nears expiry.
Managing temps with temporary employment contracts
As the HR manager responsible for hiring, there are several reasons why you may want to choose temporary employment including:
- short-term, high-demand periods
- when permanent employees are unavailable
- need for specialized knowledge for a specific a project
- project-based work or one-off assignments
- urgent staffing requirements
It’s an effective way to get the help you need without having to commit in the long term. To govern interim employees both locally and globally, HR managers systematically use temporary employment contracts.
With optimal contract management procedures implemented, you can better employ temps while leveraging the advantages they offer. Tools such as Avokaado make employee management — permanent or temporary — much easier by helping your contract processes be more efficient. You can try the platform free for 7 days so you can experience first-hand all it offers.