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Temp-to-perm conversion fees

Posted on May 23rd, 2013 Read time: 1 minutes

The employment of short-term employees increased due to recent economic improvements, as more companies utilize temporary workers for their advanced skill set and to fill gaps in permanent staffing. With the boost in contingent employees in the workforce, it is only natural that many of them will be taken on full-time by their employers. Recent research from Staffing Industry Analysts found that while many temps are receiving permanent positions, larger companies pay lower temp-to-perm fees than their smaller counterparts.

Conducted during the second quarter of 2013, the Contingent Buyers Study asked 187 temporary workforce managers about their temp-to-perm conversion fees. The study reported companies with 100,000 or more permanent employees that hired a short-term worker full-time after they had been on the job for one month paid a median fee of 11 percent of the short-term workers annualized salary. Businesses with between 1,000 and 4,999 staff members paid 20 percent. 

After being on the job three months, larger companies paid 7 percent compared to their smaller counterparts, which paid 10 percent. 

The difference reflects the discounts staffing firms provide companies for hiring short-term workers. As the number of contingent employees enter the workforce and are brought on full-time, discounts may continue to rise. 

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