March 1, 2012

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Rent to Own

Looking to Grow, Companies Weigh Pros and Cons of Temp Workers

Rebecca Palmer

March 1, 2012

Five years ago, IntegraCore in West Jordan ran its logistics and transportation operation with 12 employees. Half a decade later, the booming company staffs about 180 full-time workers and employs between 150 and 350 temporary workers every day.

Hiring the right people—and choosing when not to hire—was imperative for the company’s success, explains David Maughan, director of business development for IntegraCore.

While IntegraCore exper-ienced meteoric growth, hundreds of other Utah companies floundered in industries from construction to commercial real estate to retail. As the national economy crawls toward recovery, many of these companies are finally in a position to grow their workforce.

Adding staff, however, is an expensive proposition, and many companies are stuck deciding whether to bring on temporary workers to facilitate their growth, or to make the commitment and hire permanent staff.

Filling the Slots
For IntegraCore, bringing on new staffers—both temporary and permanent—has been well worth the time and money.

The company focused on hiring team members who fit IntegraCore’s vision, even if management didn’t yet have a place for them. In fact, when Maughan started, he was among those who didn’t yet have a job description.

“You get the right people on the bus and then you get them in the right seat,” Maughan says with a nod to best-selling business writer Jim Collins’ book Good to Great.

Maughan believes businesses of all sizes can learn from IntegraCore’s corporate hiring philosophy: Only hire permanently for core business functions, and hire either contractors or temporary workers to fill in the cracks. Then contract with firms who specialize in the services you need.

For example, IntegraCore has full-time managers and quality assurance staffers in its warehouse, but temporary workers perform almost all the manual labor such as stacking boxes and palettes.

Intermountain Staffing Resources has found its niche in connecting the unemployed with companies, such as IntegraCore, that can give them steady work. Intermountain employs hundreds of temporary workers in five states. In doing so, it lets companies experiment with different employees, says company representative Joe Barnard.

“For a small business with 20 – 30 employees, hiring the wrong person can be very expensive and very disruptive to your business” he says. “In that case, we offer a rent-to-own scenario. It’s a try-on, a test drive.”

Finding Balance
Hiring either temporary or permanent workers can be costly. Interviewing, training, and providing wages and benefits are first in line. Additional costs such as paperwork for taxes, insurance and legal filings add up quickly.

Using temporary staffing services can eliminate some of these headaches. But it can cause other kinds of pain.

After three decades in the construction business, Kenneth Hodges has had little luck with temporary workers and contractors. As owner of Top Haus, a countertop manufacturing and installation company, Hodges says he’s had to rely on networking, intuition and a little luck to bring on—and retain—the best people.

“You have to go with what you feel is right at the time for your situation, and that’s a hard balance to keep,” he says. “If you hire someone and train them and the work doesn’t come, you have to lay them off. But if you don’t hire them and they go somewhere else and they would have been good, it’s a catch-22.”

Nevertheless, he says hiring before you have work to be done is a luxury for large companies, but not one he can afford.

“When the demand isn’t there, you can’t pay for dead time,” he says. Instead, Hodges has focused on holding on to key employees, even if it meant taking out loans in order to make payroll. Part of that strategy, he says, was making sure that the most important people didn’t see their wages cut and didn’t feel like they could be replaced.

Because hanging onto valuable employees is less expensive in the long run than finding and training replacements.

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