On paper, hiring a full-time employee often looks like the more affordable option. Hourly rates for temporary labor can feel higher at first glance, which leads many employers to assume full-time hiring is the safer financial bet.
In practice, the real cost of hiring depends on context. Duration of need, production volatility, internal bandwidth, and risk all play a role. The decision isn’t simply full-time versus temporary. It’s about what your operation needs right now, and what you can realistically support long-term.
Looking at the full cost picture can help clarify when full-time hiring makes sense and when temporary labor is the smarter move.
A full-time employee comes with more than just wages. While salary or hourly pay is the most visible cost, it’s only one part of the total investment. The higher the salary, the more companies pay overall. According to Forma, average employers in 2025 spent $47.92 per hour for each employee, plus an additional 31% of that cost in benefits.
Over time, additional expenses add up and can become harder to scale up or down when business conditions change.
This includes hourly wages or salary. Rates may be influenced by local labor markets, shift requirements, and skill level.
Payroll taxes, workers’ compensation insurance, and unemployment insurance are required regardless of role or tenure.
Health insurance, retirement contributions, PTO, vacation time, and sick leave all represent ongoing costs, even during slowdowns or production gaps.
Job postings, recruiting time, interviews, background checks, drug screening, training, and ramp-up all require internal resources. New hires rarely operate at full productivity on day one, which can affect output in the short term.
Hiring a full-time employee means your internal teams handle onboarding, payroll, benefits, compliance, and ongoing employee administration. As headcount grows, so does the workload on HR and payroll.
When a full-time employee leaves, the investment doesn’t leave cleanly. Knowledge loss, retraining, and rehiring costs can compound quickly, particularly in high-demand or unpredictable environments.
For stable operations with consistent demand and strong internal hiring support, full-time employees can be a good long-term fit. The challenge arises when demand shifts faster than staffing plans can adjust.
Temporary labor works differently. Instead of spreading costs across multiple internal functions, most expenses are bundled into a single hourly rate through the staffing agency.
This model trades long-term commitment for flexibility.
The cost of temporary labor varies by role, experience level, and location. While the hourly rate may be higher than a comparable full-time wage, it includes costs that employers would otherwise manage internally.
This includes hourly wages. When hiring temp workers, this is a passthrough cost bundled into what you pay the agency.
Staffing agency pricing typically includes:
From an employer perspective, this means fewer hidden or downstream costs. Administrative work, compliance, and onboarding logistics are handled externally, which can reduce internal strain during busy or unpredictable periods.
Related Content: The Hidden Cost of Staffing Gaps
Temporary labor isn’t always cheaper, and it isn’t meant to replace full-time teams. It becomes cost-effective when flexibility matters more than long-term commitment.
When hiring is unpredictable or unprecedented, hiring a temp worker is one of the best decisions you can make for your company. Situations where temp labor often makes sense include:
In these cases, the ability to scale quickly, avoid long-term obligations, and reduce administrative burden can outweigh higher hourly rates.
There isn’t a universal answer.
For steady operations with predictable demand and low turnover, full-time hiring can be the right investment. For environments that change quickly or require rapid staffing adjustments, temporary labor can provide cost control in a different way by limiting long-term exposure and internal workload.
The most cost-effective option is the one that matches your operational reality.
If you’re facing staffing challenges that need to be solved quickly or flexibly, Strom Engineering can help. We specialize in supporting manufacturing and warehouse operations with skilled, safety-focused temporary labor when and where it’s needed.
Learn more about our staffing services or contact our team to discuss what approach makes sense for your operation.
Strom is a national staffing and recruitment agency, with a particular focus on manufacturing, engineering, assembly, and other trade positions. We match skilled candidates to temporary or project staffing positions. Learn more about how it works and check out our case studies for more information.