According to the latest data from the Hungarian Central Statistical Office (KSH), 10,300 people were employed by temporary work agencies or employment agencies in 2020. In a rapidly changing business environment, temporary agency work could be a useful form of employment. But is it the best solution? Let’s find out!

Temporary agency work is an atypical form of employment that more and more organisations are using to meet their workforce needs flexibly and quickly. In essence, one company (the lender) makes workers available to another company (the borrower) for a fixed period. It is a three-way relationship whereby the employee is contracted to the lending company for labour, the latter does the administration and filing, but the employee works for the borrowing company.

This arrangement has advantages for both the employee and the employer. For companies, it mainly means flexibility time and cost efficiency, for example, when a new establishment is opened, a deadline is set and more capacity is needed. For workers, it offers the opportunity to acquire new skills and experience and the promise of long-term employment.

The importance of temporary agency work in the modern employment market

For today's businesses, agile staffing is key, especially at a time when labour shortages are a major challenge in many industries. In this context, temporary agency work opens up new doors, especially when it comes to the loan of foreign workers.

Temporary agency work by foreign workers is becoming increasingly common in today's labour market, especially in areas requiring manual labour. It can be an ideal solution for companies, for example, to deal with seasonal fluctuations in production or to meet sudden increases in labour demand. 

More and more people are using temporary agency work

Temporary agency work is becoming an increasingly popular form of employment in Hungary as a quick solution to alleviate increased capacity needs. According to a summary from the Ministry of Economic Development, there were 652 temporary employment agencies in 2022, 6.4% more than 2 years earlier. The turnover of temporary employment agencies last year was HUF 426 billion in the physical category and just over HUF 52 billion in the intellectual category. Within this, the managerial and senior management segment accounted for HUF 7.3 billion. 

These temporary employment agencies had contracts with more than 177,000 workers, who were placed with almost 6,600 domestic service providers in 2022. 93.9% of the workers were in manual occupations and 6.1% in clerical occupations. 

But temporary work is becoming increasingly popular not only at home but also internationally. According to Eurostat data, while in our country they accounted for only 0.3% of the active population a few years ago, the figure was 4.6% in Slovakia and 4.7% in Slovenia. 

According to the International Labour Organisation 2020 report, temporary agency work is growing steadily worldwide and is becoming increasingly dominant in the labour market. According to some forecasts, the global turnover of temporary work agencies will grow even faster than before in the coming years.

Temporary work as atypical employment

Temporary agency work is one of the most unusual - or atypical - forms of employment. These are employment arrangements that differ slightly from the usual full-time, long-term employment with a particular employer.

In addition to temporary agency work, other atypical forms of employment can be an excellent alternative to the traditional solution.

One of these is freelance work, where individuals take part in project-based work with flexible hours, often telecommuting. Here, workers work on a contract basis and consult companies as external experts.

Part-time employment is also an atypical form of work where employees work less than 8 hours a day, typically 4 or 6 hours, rather than 8 hours a day. It is a flexible option for those who cannot work full time, for example, because of family commitments or studies.

Another alternative is teleworking, where workers do not work in a traditional office environment but from home, a café, a library or anywhere in the world. The sudden global pandemic has quickly made this form of work popular.

These forms, including temporary agency work, are flexible and responsive to changes and challenges in the labour market. As workplaces become more decentralised and employment contracts more flexible, familiar models are changing. 

It is also worth mentioning a non-typical form of employment, namely interim management. Let's look at the situations in which interim managers can be a good choice.

Engaging interim managers: when to act?

There are cases where temporary staffing has been used for management positions: the number of temporary managers in 2020 was 780. But is this the best solution? 

Interim management is for shorter periods, for specific projects where specific knowledge and experience are needed that cannot be provided by in-house staff. This could be the launch of a new business, the implementation of a restructuring project or even the management of a crisis.

Interim managers - who are experts and managers temporarily assigned to the company - are usually hired to achieve specific, well-defined objectives. They have a high level of experience and skills, learn the job quickly and can lead the organisation effectively during the transition period.

The most significant benefits of interim management for organisations are flexibility and speed. They can be on the job in as little as a few days or weeks, bringing the skills the organisation needs on-site in a short time.

Temporary agency work can be an ideal option in certain sectors especially for manual workers. If you are looking to alleviate a shortage of experts or to replace a manager, it is more advantageous to bring in an interim manager.

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