What is your key strategy for controlling compensation costs in a down economy?

If your organization is like many that aren’t facing layoffs, hiring people on a temp-to-full time basis could be one ticket to better cost control.

Bringing in employees on a temporary or contract basis brings about short-term and long-term cost control if it’s done properly.

In the short-term, these  employees aren’t eligible for your health or retirement plans. Long term, the arrangement gives your firm time to evaluate (based on the hire’s performance) whether  the employee would represent  well-spent money in terms of benefits, salary and incentives.

It’s often worth paying the new person a higher hourly wage – even overtime – for a short time to see if you should invest your firm’s benefits dollars in this employee. Consultant Erica Delaney recommends capping the evaluation period at 60 to 90 days.