Understanding the Cost-Benefit of Staffing

In North America, there are estimated to be more than 25,000 staffing and recruiting agencies, with nearly 50,000 offices in the U.S. alone. After the ups and downs the workforce experienced the past few years, businesses are looking for solutions for future growth, but with cost-cutting solutions. This is where staffing services excel.

However, when working with temporary employment agencies, it can be hard to understand the cost-benefit. In fact, one of the biggest complaints about using a staffing agency is the cost associated with it. Recently the American Staffing Association (ASA) did a case study explaining the breakdown in bill rates.

Outlining the common misconception that an agency pockets what the employer pays minus what the temporary worker makes, ASA shows that for a staffing agency to pay a worker the national average hourly rate of $17/hr., they will have to raise the bill rate by 51.5% to cover legally mandated labor costs, general and administrative expenses, while including the industry average of 3.3%. So, while the bill rate charged to a client would be $25.76/hr., the agency only takes in $0.85/hr. as a net profit.

With the costs of using a staffing agency explained, let’s look at the benefits they provide employers.

Maintaining a Passive Talent Pool

While businesses only recruit and seek talent when filling an open job position, staffing agencies are constantly connecting with professionals and building relationships with those who are either actively looking for a job or who are just open to test the waters of the market. However, creating a deep talent pool not only takes time and energy, but maintaining it can be just as difficult.

By teaming up with a staffing company, businesses can expand their talent reach exponentially, while staying focused on company operations.

Recruiting Workers for Direct Hire

When unemployment rates are low, it usually means we’re in a job-seekers’ market. This means employees may be open to seek opportunities outside their current positions. These individuals could be passive talent who wouldn’t normally apply for an open position but would be willing to speak with a recruiter if the job position was intriguing enough.

This is where staffing companies shine. By seeking out professionals who fit the culture and have the values and skills needed to excel in the open position, staffing agencies can find the right person and place them in a full-time position either through recruiting or accessing the pipeline of talent staffing agencies have at all times.

Allowing Businesses to Hire Through Evaluation

As companies adjust to the current job market, hiring managers likewise are adjusting their traditional views on which workers would be a good fit for open positions, looking past customary requirements. However, without checking off all the boxes, the question remains if the candidate has what it takes to excel in their position.

Staffing companies, like Express Employment Professionals, offer the opportunity to place a candidate through Evaluation Hire. During the evaluation period, the employee is able to prove to the company that they are the right match for the job, as well as see if the job is the right fit for their career goals. At the end of the evaluation period, the company can decide to hire or to move on to another candidate.

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