Due to organisation policies, there are several common reasons why organisations hire temporary employees. HR policies makes clear distinctions between types of employment in an organisation. According to Bamidele (p.14) “all these types of employment may differ from the permanent employment in aspects such as working hours, terms of the contract, access to fringe benefits and supervision received. Most of the companies have a certain number of casual workers as a way to deal with periods of decreased productivity or lower demand”. However, there are three main reasons for hiring temporary employees which are flexibility of staffing, reduction of costs and ease of dismissal (Wandera, 2011).
2.4.1 Staff Flexibility
Due to the rapid advance technology and the ever increasing competitiveness, companies have established policies of flexibility and adaptation to the economic changes in order to keep their operation cost as low as possible while maximising profits (Bryson, 2013). Given the current economic breakdown around the world, most companies opt to present more flexible employment conditions for their employees as well as temporary option of employment in order to make it easy for lay off and termination of contracts without affecting the employment status of permanent employees. In addition, allow temporary employees to fill in or cover for short and medium term absence of permanent employees such in case of maternity and paternity leave as well as in case of illness. Most companies experience variable demands of work during certain season or when there are projects. When demand is high, the usual response is overtime work sometimes augmented by the recruitment of temporary employees to increase work output and to meet schedules (Dacilyte and Aranauskaite, 2012).
2.4.2 Reduction of cost
One of the common reason for temporary employment is the reduction of recruitment costs. This is especially noticeable with employees actively recruited through an employment agencies rather than by their real employers. In Namibia, most companies have moved away from this notion and only utilise agencies in case where highly qualified person are to be recruited such as CEOs or chancellor. Decreasing employee costs within an organization is a critical aspect of strategic human resource management with regard to competitive global market. Long-term and short-term recruitment costs may be kept at a minimum by hiring temporary employees. Temporary employees also allow the company to cut cost by not paying benefits such as medical aid, pension and any salary increase for temporary employees as employers are not obliged or forced by law to pay these benefits (Bryson, 2013).
2.4.3 Ease of Dismissal
According to Bryson (2013) the temporary employment, as the name imply, it is very easy for companies to terminate temporary employment without any additional cost to the company. Just as in the part of employee fill in and cover for permanent employees absent, the temporary employees can be dismissed once the permanent employees are back at work. This is due to fact that the lack of costs linked with laying-off temporary employees, it is however an attractive option for most organisation. Human resource also use the strategy by hiring of casual workers was to adjust the workforce to match demands. “This gave organizations an advantage in terms of numerical flexibility employing “just in time” workers to cope with increased or decreased demand without resorting to making permanent employees redundant” (Wandera, 2011). Temporary employees may increase pressure to Human resource in area such as training and development, payroll cost and control as well as to control staffs availability as in accordance to the workloads in the organisation.