Is Temp Staffing the Same as Contract Staffing?

There is a lot of overlap between what is referred to as temporary staffing and contract staffing. However, there are certain important differences which distinguish one from the other. This piece will shed some light on the definitions of temp staffing and contract staffing and will explain the difference between both contingent worker types and when it is most appropriate to use one or the other.

First, let’s establish that in general, all contract staffing is a form of temporary staffing but not all temps are contract workers. Temporary staffing is the original flavor of contingent worker and has been delivered by “temp services” or “staffing agencies” since the 1940s when industry needed to fill the positions left behind by soldiers going off to fight in World War II. These services/agencies work with organizations needing temporary, seasonal, part-time or temp-to-hire workers. In most instances, the need for temp staffing is driven by periodic, short-term needs for workers on an as-needed basis. Perhaps a source of confusion when defining the difference between temp staffing and contract staffing is the fact that temp agencies generally enter into a contract with the hiring company to provide temp staffing services. However, this is NOT the same as contract staffing.

The term “Contract Staffing” is used to describe the practice of hiring workers to address a particular project that is temporary in nature; the kind of projects that require specialized talent types but are not long-term, and where it would be too costly to hire full-time employees to complete. The “contract” referred to in the term contract staffing is a business-to-business contract written between the hiring organization and the staffing agency. In these contracts, sometimes referred to as Statements of Work (SOW), the hiring organization explains – in detail – the nature of the project they require contingent labor to deliver. These contracts typically include detailed project timelines/scheduling and lists of deliverables to be produced to complete the project.

In this arrangement, the supplier of the talent is the employer of record, and they deliver a project team to deliver what is required in the contract. When the contracted project period is over and the project is complete, the contract terminates. In this way, contract staffing is different than permanent temp staffing arrangements made with temporary staffing providers. The contract staffing firm commonly handles the recruitment of appropriate workers for the project, payroll and benefits administration, tax withholding and ongoing HR services to its workers.

While the above mostly explains what contract staffing is used for most often, it is also a fairly regular practice for contract staffing companies to offer other services to help hiring organizations find contract labor (not temp labor) to work on specific projects. For example, a contract staffing company can also deliver Independent Contractor hiring services, helping to connect ICs with specific skill sets and contract service offerings to hiring organizations in need of specialized talent on a non-permanent basis.

If you need guidance to decide which type of staffing is appropriate to your organization’s needs and challenges, nextSource representatives can help assess your operation and make recommendations about how to proceed.