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5 Benefits of Having a Permanent Workforce

5 Benefits of Having a Permanent Workforce

May 23, 2024

Since the pandemic, there have been changes in hiring practice, including a shift towards bringing workers in-house on permanent contracts. The fragility of the workforce meant that employers had to compete on wages if they didn’t have a permanent team in place. This allowed contractors to drive up prices and secure impressive salary hikes.

To counter this, employers are now moving towards permanent, fixed-term contracts. This offers some reassurance for employees, but also some distinct benefits for the employers. The bottom line is that – which a permanent workforce might cost more upfront in staffing costs – the long-term benefits of this arrangement will always be increased productivity and profitability. 

In this guide, we’re looking at five common reasons you might consider moving towards a permanent workforce.

5 Benefits of Having a Permanent Workforce CMD Recruitment

1. Skills and experience retention

It pays to have workers who are familiar with your company and its processes. The only way to achieve this is with a permanent workforce. This allows you to create management structures that operate with minimal interaction from those at the top.

You get to nurture skills and retain experience within your company. High staff turnover is often a reason for sky high recruitment costs, so it makes sense to do everything you can to retain skills and talent once you’ve spent the time and money finding it. A permanent workforce also allows you to recognise promising young talent and nurture this, which can be more cost-effective than having to hire more senior employees.

2. Return on training investment

Training your employees is money down the drain when they are destined to take their experience elsewhere at the end of their contract. And not training your employees is rarely an option, as this means you’ll have clear skills gaps within your organisation.

Employees are also more likely to take training seriously when they know that it could contribute towards career progression within your company. If they know they are only on a short-term contract, they might be unwilling to engage with the training programme.

5 Benefits of Having a Permanent Workforce CMD Recruitment

3. Employee loyalty

Fostering a sense of employee loyalty within your workplace offers some unique benefits. They will feel a sense of affinity with the brand and are less likely to take their skills and training to your competitors. Employees are also more invested in their work and more likely to go the extra mile when they feel connected to their employer.

Without a long-term contract, employees might struggle to feel a sense of loyalty towards your company. Remember that this is a transaction, and employees enjoy security in exchange for loyalty.

4. Improved reputation

A permanent workforce will help to drive down staff turnover and boost your company reputation. Happy employees are more likely to speak kindly about your company in their social circles. And those that feel a sense of loyalty to their employer will be less likely to bad mouth your company when they naturally move on to new opportunities. 

If they are struggling with a sense of security in their employment situation, this can turn into ill-feeling towards their employer, and this can lead to bad reviews and a bad reputation for being an unfair employer.

5 Benefits of Having a Permanent Workforce CMD Recruitment

5. Establish company culture

High staff turnover will make it difficult to establish any kind of company culture. While not essential, company culture is often seen as part of your branding. When you have new employees leaving every week, it can make your workplace feel hollow and soulless.

By hiring a permanent workforce, you’ll establish traditions, principles and be able to nurture a sense of belonging that contributes to employee happiness. Once established, company culture is self perpetuating, as established employees will carry the torch to be passed on to new employees.

Closing thoughts

As you can see, there are many benefits to hiring a permanent workforce. The theme that runs through all of these points is the idea of employee happiness. And employers know that happy employees are nearly always more productive.

If you want to boost productivity and profitability, hiring a permanent workforce is the way forward. It will help you to get the most out of your training budget, attract the best talent and nurture potential. Employees will enjoy a sense of security and belonging, and this will turn into a sense of loyalty towards their employer. 

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