April 12, 2018 3:07 pm
When it comes to your business, money and cash flow have a huge impact on your outlook. You’re always looking for ways to improve efficiency and quality—and save money. One of the ways any business can save costs is through a staffing agency. Hiring a professional to help you find quality employees and temporary workers has many benefits. They range from expertise and knowledge of best practices to opening up the opportunity to hire temporary workers and avoid layoffs. Here are 10 unique ways staffing agencies save you money.
Any business who has ever tried to hire a new team member is well aware of the steps it takes to find the very best candidates available on the market. Not only does the process take time, it also has hard costs associated with it. One of these costs is advertising and marketing for the job. At bare minimum you need to post it on your LinkedIn company page and your website. However, in order to bring in more leads you may do sponsored ads online or post to any number of job boards. Not only does posting positions online have an upfront cost but there are no guarantees of the results. There are also costs to prescreening and testing potential candidates, the most costly of which is the time it takes to screen resumes and conduct interviews.
According to the U.S. Bureau of Labor Statistics, turnover can cost an organization 33 percent of an employee’s total compensation, including wages and benefits. So why do employees turnover and how can you combat it? One reason employees leave is compensation. A staffing agency will be knowledgeable about current competitive salaries and benefits and can help you be a stronger competitor. A second reason for employee turnover is misalignment of expectations. Using a professional to hire your workers means you can count on them having a clear idea of what to expect from the outset. Hiring through an agency also allows you to make sure the employee is a good fit for your organization before you take on all the costs of their employment. If they end up not working out, you are out significantly less than you would have been had you hired them directly to your payroll.
When you are short handed, it affects every part of your business model. It slows your response time and production output. It also affects your existing workforce. If you do not have the ability to adjust your output or timelines, your company passes that extra work onto your employees. This creates long days and overtime for those who are most valuable to your company. Turning to a staffing agency allows you to quickly react to these needs and bring in contractors who can offload the work without adding the cost of full time benefits. Many who work in unpredictable industries find this type of model extremely beneficial from a cost perspective. You hire and use workers when you need them and avoid layoffs when the work slows.
A staffing agency not only finds candidates but takes the time to properly prepare them for the entire process. This means having qualified, ready to work candidates from the interview to the hire. Agencies also offer resources and training to your temp workers that improves their skills without taking from your bottom line. It is important to look into the training that your staffing agency will provide at the onset of your relationship. This will keep you both on track with new and temporary workers.
Finding the right fit for your business isn’t easy. It requires the time to vet candidates not only for qualifications but also a cultural fit. When you hire a full time employee on your own, you do not get the benefit of trying them out in your business. Temp to permanent positions allow you to bring someone on, see how they work and how they fit in your organization before giving a full-time offer. No matter how great your interview, you cannot get a perfect read on how a new person will fit at your organization. Companies that use staffing agencies find that they save money by taking fewer chances with their hires.
No matter what industry you are in, it is nearly impossible to predict how your industry and your company will change from day to day. This means that while your workers will become the heart of your operation, you will need the flexibility to respond to demands as they come, in order to save money. Whether that means slowdowns or long-term sick leave, using flexible workers can help save you from big swings in your employee pool. A staffing agency can help you respond to these demands with temp workers that you can scale up or down as needed. By avoiding large scale layoffs you keep your company from absorbing severance costs.
Every employee at your company represents a salary, benefits and other overhead that you need to cover. Insurance alone can be a big drain on your company’s bank roll. Most companies find themselves having to offer the basics like life insurance, retirement and vacation to compete for workers. According to MIT the costs of basic salary, employment taxes and benefits are typically in the 1.25 to 1.4 times base salary range. That means if you hire an employee at the cost $50,000/year, the additional costs are $16,500- $20,000 more than that.
However, when you turn to a staffing agency the cost of these benefits do not affect your company until you make the decision to hire the employee on to your payroll. The agency will typically offer benefits like health, vision, dental and life insurance without you having to absorb the cost. While there are some mandatory benefits such as Paid Sick Leave, that you will still pay, you will save substantially on the employees that turnover quickly.
Anyone who has staffing needs can tell you that finding the right person for your opening is not easy. Sure, you may get piles of resumes but finding the right fit goes beyond skills and qualifications. A new employee needs to fit your organization style. Beyond that he or she needs to embrace your culture. There is possibly nothing worse than hiring and training an employee only to decide that they just are not the right fit for the role. And no matter how hard you study resumes or LinkedIn profiles, no piece of paper will let you know whether someone is a good fit for these more intangible qualities. So turning to a staffing agency means a couple of things: they know their candidates well and can screen out those who would not fit your company. They also can allow you to hire someone as a temp worker first and see the fit for yourself.
There are many costs to owning and operating a business. As you grow one of these costs is hiring and maintaining your workforce. This can translate into an HR position or a full HR department. That translates into salaries, benefits and more office space. When you turn to a staffing agency for these needs you save these costs and gain a competent HR partner.
Payroll is tricky and businesses large and small can look at their payroll partners and find savings as the per employee cost of payroll can range from $20-$100 each month. That’s a lot of potential savings to realize. Then there are benefits, laws and regulations, and deductions to contend with. When you partner with a staffing agency they take care of payroll for you. This could mean not even needing that person in HR who handles all the paperwork. It also means you save on your overall payroll with fewer people to pay directly. In fact, depending on how much you use a staffing agency, your payroll expenses could be eliminated altogether. As experts in the field, an agency will stay up to date on the current laws and know how to operate within them. That could translate into fewer mistakes, fewer man hours and overall less cost when it comes to your payroll.
This blog post is intended for informational purposes only and does not constitute legal advice. No attorney-client relationship is created between the author and reader of this blog post, and its content should not be relied upon as legal advice. Readers are urged to consult legal counsel when seeking legal advice.