“You’re doing the job of three people.”
“They’re looking into hiring someone else.”
“Why would they pay two people when they can get away with paying one?”
“Well… I’m sure they’ll give me a raise.”
“Why would they pay you more now when they’ve gotten away with paying you less?”

The conversation above, though paraphrased is one that I’ve had many times, at many different jobs. Odds are, if you are at your desk and dreading the next meeting you have to go to while you are reading this, you’ve either been part of or overheard the preceding lines. It has become part of the reality of the working world (at least in the greater New York area).

When I used to go out for interviews, there were two sets of questions I would always ask. Upon receiving two jobs, I was told that the people interviewing me said that these questions showed I was “on the ball”.

1. I know that the job is 9am to 5pm, but what are the average leaving time? Is there a particularly busy season in which I will have to put in a lot of overtime?
2. What are some of the things I will be responsible for that aren’t necessarily in my job description? Though my title will fall under Department A, is there another department that I will have to answer to/work closely with?

Would you ever pay someone more if you could get a job of the same value for less? Of course not. When I read an article on temps today in the New York Daily News, I had to shake my head. Why the hell would any company hire a permanent person when they can get the same job out of a temp? To save on the commission cost to the temp agency.
To keep a quality person in the position.
Nonsense.

Let’s just run some quick numbers. (Keep in mind, the numbers below are what the company will pay.) The NYDN said that one gentleman stood to make $17 per hour.

$17 per hour
8 hour day: $136.00
40 hour week: $680.00
1 month: $2720.00
1 year: $35,360.00

Now imagine that they are paying the temp agency a 20% commission. I would be surprised if this was an average percentage, but for the sake of argument, let’s go with it.

With 20% commission $17 per hour becomes $20.40 per hour
8 hour day: $163.20
40 hour week: $816.00
1 month: $3264.00
1 year: $42,432.00

So far, this makes sense. Without commission, the company can save $7072.00 per year. This is assuming that this person is needed all year and not just on a project basis (imagine 8 months per year). However, if you go for a full time job, you’re probably going to want health insurance. Here are some averages I got from The National Coalition on Health Care:

Average cost per single coverage: $4200
Average cost per family of four: $11,500

Finding the average employee contribution to their health plan was a little harder to track down, so I took an example from a major city, Boston. For the sake of argument, we’ll say the single person contributes 3.5% (a rough average of the “between 1.5 and 6.6 percent” mentioned). Based on our $17 per hour full time hire, let’s take a look a what the company will pay.

$39,560.00 single; $46,860.00 family
Payment less employee contribution: $39,413.00 single; $46,457.50 family

If this guy does not have a family, the company can still save a few bucks by hiring him full time. Then again we did not take into account retirement plans, severance packages, unemployment payments (if terminated), etc…

Tell me, “Why a company would hire a temp to a full-time position?”