3 Tips for Controlling Temporary Staffing Management Costs
Flexibility is increasingly vital for organisations, and temporary work has become a key non-production expenditure. Temporary staffing not only provides the agility to meet fluctuating demands but also serves as a strategic and economic lever—especially as the sector becomes more digitised. However, controlling the costs associated with temporary workers can be complex given the sector’s unique characteristics. To gain firm control over these costs, follow our three key steps: identify, manage, and analyse.
Tip 1: Identify
The first step is to understand the true cost of a temporary worker and how that cost is calculated. Since temps are not company employees, they are not included on the payroll, and payment of the agency’s invoice creates a cash-flow gap compared to regular employees. Moreover, the recruitment effort carried out by the temporary employment agency eases the burden on your HR department. It is important to remember that there are many advantages to temporary work beyond its cost—which partly explains its growing popularity.
Begin by establishing a clear framework for authorisation and defining the roles of each party:
- Who identifies the need?
- Who defines the role in detail?
- Who recruits the right candidate?
- Who validates the assignment and verifies compliance with the budget?
The clearer the process, the less likely budget overruns will occur. Short approval cycles—supported by digital communication both internally and with agencies—ensure that accurate information is shared promptly.
Furthermore, negotiating framework agreements with staffing agencies can help reduce billing coefficients to reflect your actual needs. Clearly defined thresholds during these negotiations are essential to optimising expenditure. Maintaining a pool of pre-tested, reliable temporary workers not only avoids surprises but also reduces the time spent on recruitment.
Tip 2: Manage
The next step is to manage your temporary work costs effectively. Digitisation enables you to compare actual expenditures with your forecast budget easily. Regular (monthly or weekly) monitoring helps identify any discrepancies, so you can promptly investigate their causes.
This continuous oversight gives you a clear idea of the cost per temporary assignment, simplifying budget estimations, pre-billing processes, and verification of the conditions for hiring temps. Effective cost management also involves:
- Verifying invoicing accuracy,
- Detecting errors promptly, and
- Setting up an alert system for any discrepancies.
With such measures in place, the company—or the Managed Service Provider—can quickly request explanations or verifications from the staffing agency, ensuring that spending remains within budget.
Tip 3: Analyse for Improvement
After assignments are complete, digital tools dedicated to temporary work automatically generate detailed reports by site, supplier, qualification, payroll category, and more. This reporting is essential for conducting an in-depth analysis and obtaining a comprehensive overview of your temporary staffing expenditure, while still allowing you to drill down into specific details.
Using business intelligence (BI) solutions, these reports not only track supplier performance but also inform internal discussions regarding additional posts or potential permanent recruitment. With the right data at hand, you can optimise operations and make informed, strategic decisions.
Our View
Controlling temporary employment management costs requires access to extensive data and the implementation of clear, controlled processes. Modern digital solutions empower your teams by automating workflows and streamlining approvals—thereby reducing indirect costs by freeing up internal resources.
Discover how integrating such digital tools into your temporary staffing management strategy can help you achieve better control over costs while maintaining the flexibility and responsiveness demanded in today’s competitive market.
