When work starts piling up, most small business owners face the same question: do I hire someone permanently, or get temporary help until things settle?

There's no single right answer. It depends on how long the need will last, how predictable it is, and how much time you have to recruit. Here's how I'd think it through.

When temporary staff make sense

Temporary staff are best when the need has a clear end, or when you're not sure it will last. For example:

  • Seasonal peaks, like a busy January for an accountancy firm or a Christmas rush for a retailer
  • Cover for absence, such as maternity leave, long-term sickness or a holiday period
  • A one-off project, like a system migration or a big mailing
  • Testing a role before you commit to a permanent hire

The big advantage is flexibility. You pay for the hours you need, and when the work drops off, so does the cost. If you use an agency, they also handle payroll, holiday pay and right to work checks for the temporary worker.

When a permanent hire makes sense

A permanent hire is better when the work is ongoing and central to how your business runs. Think about a permanent hire when:

  • The role will be needed for the foreseeable future
  • It needs knowledge of your customers, systems or processes that takes time to learn
  • You want someone who will grow with the business

Permanent staff build up knowledge and relationships that temporary workers simply can't in a few weeks. That continuity is worth a lot.

Comparing the costs

The costs work differently, which is why it's easy to compare them badly.

With temporary staff, you pay an hourly rate to the agency. That rate covers the worker's pay plus holiday pay, employer National Insurance, pension and the agency's margin. It looks higher than a salary per hour, but you're only paying for the hours worked, and there are no recruitment costs.

With a permanent hire, you pay a one-off recruitment fee if you use an agency, then salary, holiday, employer National Insurance and pension for as long as they're with you. Remember that employer National Insurance is now 15% on earnings above £5,000 a year, so the true cost of an employee is well above their salary.

As a rough rule, if you'll need someone for more than a few months, a permanent hire usually works out cheaper.

The "temp to perm" route

You don't always have to choose straight away. Many businesses start someone as a temporary worker and, if it's working well, offer them a permanent role. Most agencies allow this, usually with a transfer fee set out in their terms of business. It's a low-risk way to try someone out in the real job.

Questions to ask yourself

  1. Will this work still be here in six months?
  2. How long would it take a new person to be useful in this role?
  3. Can I afford the time to recruit properly right now?
  4. What happens if I get the hire wrong?

If your answers point in different directions, temporary cover now and a permanent hire later is often the sensible middle ground.

If you're a business in Oxfordshire or Buckinghamshire and want to talk it through, tell us about the role and we'll give you an honest view on which route fits.