The Recruiter's Guide to Managing Temporary & Contract Workers in 2025
Published: 11/08/2025
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In 2025, there’s a significant decline in demand and supply for permanent roles. In this article, we will explore what this shift means to recruitment agencies and how can they start managing temporary & contract workers better.
It’s a secret to no one that the workplace landscape has not only changed in recent years, but shows no signs of stopping. With the world embracing hybrid working and flexibility during the times of the pandemic, budget cuts caused by the economic unease and the on-going technological advancement, it would be naive to expect it to remain the same. However, it’s hard to predict the direction in which it will move.
Lately, there’s been a noticeable preferential shift from permanent roles to temporary ones, observed in both employers and candidates. While recruitment agencies working with temps and contractors a thriving, this change introduces a galore of challenges to those focused on filling in permanent placements.
In this article, we will explore what caused the shift, what it means to the recruitment agencies, how to address the new challenges and why it’s important to form the right approach to managing temporary & contract workers as soon as possible. We will also share a couple of tips how to make the adaptation easier as well as discuss our prediction whether this trend is just a fad or is here to stay.
At the present, temporary recruitment is on the rise. This trend had originally begun amidst the job crisis caused by the pandemic, when many workers faced lay offs from their permanent positions. With the competition for even entry-level positions reaching over hundred candidates per placement, temporary employment became a solution to many.
That said, the state of temporary recruitment largely depends on global economical shifts and circumstances. However, a no less important factor is the mentality, which has drastically changed since the pandemic. Namely, the companies now want to hire faster, and the employees seek maximum flexibility. Both of these expectations collide in temporary working arrangement, making it favourable.
Whether the situation is to change is debatable and is too early to change. The state of temporary recruitment is known to be unstable and dependable on many outside factors. However, at the moment its trumping over the preference towards permanent roles on all fronts, which calls many recruitment agencies to rethink their strategy and make changes in order to adapt.
What makes temporary positions more alluring to both employers and candidates than permanent ones? Previously viewed as a more secure choice, they’ve been declining in supply ever since the pandemic. However, as of the late, the candidates are also less interested in taking them on.
There are two reasons why the popularity of temporary positions is on the rise, and one of them is that more companies are opting to employ contractors over permanent workers. Since we are going through the times of economic unrest, many organisations are uncertain about their future, and therefore creating/filling more full-time positions brings on many risks. Temporary employees are a safer option in many ways. Not to mention, they can always be re-hired for a different project if their skill set is required.
In recent years, temporary employment has also become easier to manage from an administrative perspective. Filled with intricacies such as differentiating rates and holiday carryovers, it wouldn’t be a favourable option due to the high probability of errors and longer processing time. However, now that technology is on the rise, there are numerous solutions that cater to these needs in mere seconds, putting temporary workers on equal footing with the perms concerning internal processing. To many, this was a roadblock, and with it gone, more companies are willing to embrace the employment of contractors.
The second reason is the workers themselves. With the rise of hybrid working and numerous adjustments, alternatives and innovative solutions introduced when adapting to working in the quarantine environment, the work-life balance requirements shifted. Having learned that flexibility is possible and the traditional rigid 9-to-5 isn’t the only option, workers now have new expectations regarding their employment. Namely, they want to build their workflows in accordance with their preferences and life circumstances.
While many companies adopted flexible working styles, there are a number of those that have revoked them since the pandemic. Additionally, each organisation will have rules defining its flexibility policy, which may not be appealing to some workers. Working as a contractor, on the other hand, means nearly infinite self-management as long as the terms of the contract are honoured. With the new workplace taking shape in terms of rules and boundaries being defined, more people are choosing temporary employment to keep their freedom.
Recruitment agencies, as a rule, are expected to adapt to the landscape of the work market - quickly. While the recruiters who worked with temps before are flourishing, companies that focus on permanent roles need to train their staff on IR35 policies, compliance and insurance intricacies, and technical processes such as payroll and timesheets. The key impact, however, is reflected in revenue. Permanent placements usually generate a higher one-time fee. Temporary positions, however, often bring recurring revenue and the ability to work with higher volumes of candidates. It’s especially valuable for industries that suffer a shortage of workforce, such as IT.
The increase in both demand and supply of temporary workers means recruitment companies need tools to handle the intricate administrative processes quickly and efficiently. Additionally, they need to invest in bettering their candidate relationship management, as temporary workers often need more support. For example, when transitioning between contracts. With companies prioritising speed and flexibility, the focus on cultural fit fades, which may impact the contractor’s efficiency and mental health. Recruitment agencies are now expected to fill in that gap.
While recruitment agencies are equally affected by this shift, it’s not a widely considered fact. Therefore, they often need to figure out themselves how to adapt, without much room to trial and error as the expectations remain high. In this section, let’s explore what this change means to them and how can recruitment agencies navigate it efficiently.
The biggest challenge is the high turnover rate, which impacts speed and volume, adding pressure to infrastructure. Clients expect positions to be filled quickly, and temps often seek short assignments, meaning both demand and supply are never-ending and require constant movement. Given the amount of compliance and risk management involved, this is the breeding ground for errors, employee burnout and damaged relationships with both clients and candidates. Not to mention, all this often comes with thin margins and rising costs. Unless you have sufficient technology in place, this is not a pace recruitment companies can maintain long-term, especially if their goal is to scale.
Despite the temp-first landscape setting up many new hoops for recruitment agencies to jump through, the clients seldom show sympathy. If anything, their demands and expectations are higher than ever, both service and timing-wise. Communication is key when setting boundaries and managing expectations, especially when facing special circumstances like seasonal spikes. When prioritising temporary workers, speed is everything. And while standards for quality remain high, an occasional pushback citing the reality might be needed: thorough research has a higher probability of securing the right fit. Speedy employment, however, remains a lottery in which the client accepts the risks.
Lack of organisation, scheduling and structure further complicates the main temp-first challenge: high turnover. Poor scheduling, lack of communication, or a negative candidate experience can cause temps to quit or fail to show up. In this scenario, you lose revenue in several different areas: unfilled shifts, the recruiter’s wasted time and the possibility of an unsatisfied client walking away. This feeds directly into another area that can quickly drain your budget if mismanaged: payroll and timesheet errors. Administrative mistakes in these areas, which grow in probability with no-shows and scheduling issues, mostly lead to overpayments and underpayments, both of which create mistrust and therefore the risk of losing clients and candidates alike.
Given that the temp-first approach puts a lot of pressure on the recruiters due to the fast pace and never-ending demand, bad management means their time is being underutilised. The most telling signs of it are when, instead of filling in placements, the recruiters chase timesheets, reschedule shifts and are tasked with resolving issues. Less time spent on sourcing and securing placements translates into lower profitability. On the other side, you then have candidates on whom poor management reflects as poor onboarding, little to no support and delayed payments. Losing trust of clients is harmful, earning a bad rep with the candidates is worse - if their supply diminishes, you won’t be able to serve the clients, thus generate revenue.
We’ve briefly brushed on the potential solution to the challenges posed by the priority shift towards temporary workers, as well as the risk of not addressing them properly. And that is technology. Needless to say, one solution won’t solve all your issues, and you don’t want to add more admin work to your team by throwing in the task of moving data between different tools. Instead, you should aim to build a fully interconnected digital toolbox that is both centralised and easily accessible. Now, what solutions should go into it? That depends on your niche, but as an overall recommendation, you should aim to have a combination of a CRM/ATS, a team management tool and an accounting package.
Most of these tools offer more than their names imply, so make sure to comb through the included modules. For example, you want to keep your eyes open for holiday management modules that will calculate holiday accruals, self-billing, expense management, shift scheduling and other useful features that could aid your teams in day-to-day tasks. There are many areas of internal management that can be automated, thereby alleviating a significant amount of pressure associated with high volumes and reducing the likelihood of errors. This addresses several risks at once: payment-related mistakes, recruiters having to work on resolutions, rescheduling shifts at the last moment, and many more.
The preferential shift from traditionally perceived as ‘more secure’ permanent positions to flexibility-bearing contracted jobs was unexpected. While temporary job recruitment flourished at the peak of the pandemic due to a declining number of permanent positions, many considered this to be a short-lived change. However, just as the hybrid working setup, not only did it last, but it also greatly contributed towards shaping the work landscape of today.
That said, it’s too early to judge whether the permanent roles will surpass the temporary ones in popularity again. While most companies have recovered financially and are once again offering permanent positions, the employees are less interested in them, as they often come with less flexibility. We predict that the demand for permanent roles will recover, but not without companies rethinking what they offer. That said, the future is likely to be mixed. Organisations need a solid, defined team to carry out their core operations on a day-to-day basis. And, when addressing projects, they will rely on contracted workers who will enhance the team’s performance with further skills.
There’s a decline in both demand and supply for permanent roles, while temporary positions are on the rise. The reason for it is the shift in the workplace landscape as the whole. Post-COVID, flexibility became a common demand for the workers, and while many companies adopted the approach permanently, they still pose limitations. The recruitment agencies are required to adapt to the shift quickly as it directly affects their revenue and brand image.
The temp-first trend imposes many challenges on them, such as higher turnover rates, increased work volumes and thinner margins. Failing to adapt quickly and manage the internal operations efficiently can cause huge financial loses and a big hit to the reputation, especially for agencies specialising on niche sectors. The best way to rein everything in and shift your gears towards the direction the industry is moving is through adopting relevant digital tools.
Will the scale tip in favour of the permanent roles moving forward? It’s hard to tell as the workplace landscape of today is still actively evolving. If companies make adjustments to offer more of what allures people to temporary positions in the first place, flexibility, the scale may become even. However, if they continue favouring quick help over building company culture, the temp-first approach will likely take over.
Do you struggle with managing temporary & contract workers? Let us know - we can help.