When to Use a Staffing Firm
By Tim Hranka | May 31, 2005
Editor's Note: many small businesses believe that staffing companies are effective in larger companies. To hear the other side, we asked Tim Hranka, a franchisee of Express Personnel Services, to tell us when and why small businesses should consider using a staffing firm.
If a business employs people, there is a good possibility that a staffing firm can have a positive impact on that company's bottom line by doing things less expensively than the company can do itself.
Consider the multitude of small businesses that rely on staffing firms: pool supply companies, insurance agencies, lawyer's and dentist's offices, muffler shops, dress shops, convenience stores and restaurants. Businesses such as these and many others call on staffing firms looking to fill a variety of positions: general labourers, clerical support, mechanics, skilled labor, short-order cooks, accountants, retail staff, customer service/inside sales positions and supervisors. Associates can even be recruited for special needs.
Many small-business owners have the misconception that only large companies can benefit from using a staffing firm. In reality, we can probably do more for small businesses because a staffing service does more than simply provide associates. In many cases, companies can literally outsource all of their human resources needs to us.
Let's look at some questions and answers to the many ways that staffing firms can prove to be a useful tool for small-business owners:
The Time Factor
Q: Many owners not only work at their small business, but also in it. When workloads increase and more help is needed, how do you spare the time to hire more people?
A: It's almost impossible for you, but it's what staffing firms do everyday. They maintain ongoing databases of employees to fill the needs of a variety of clients. Time is one of the most valuable commodities of a small-business owner. By developing a relationship with a staffing firm, businesses can often resolve staffing issues with only a phone call.
Q: What other services can be provided outside of staffing?
A: If a small business starts to grow, the cost of hiring and maintaining a full-time human resources department can become prohibitive. By outsourcing, a company pays only for services when it needs them. A business can choose to outsource all or some of its human resources needs outside of staffing. An example of just some of the many human resources services offered:
- Expertise on employee-related matters such as performance evaluations, hiring, terminating and disciplinary matters, as well as statutory issues.
- Group health plan administration
- Payroll services
- RSSP administration
- Benefit plan consulting
- Employee handbook, policies and procedures
- Organizational effectiveness surveys
By utilizing such services early in a company's growth, companies can resolve many human resources issues before they turn into problems.
The Hidden Cost of Hiring
Q: How can the hiring process cost companies both money and productivity?
A: Most people don't realize how expensive it is to hire people. In a recent survey of 11,000 recruiters who use online recruiting systems, the majority said their average cost per hire was about $2,000. But that cost can almost be doubled because of the additional time the hiring manager loses to performing his or her own regular duties. Over time, such hiring methods can prove to be time-consuming and expensive vs. using a staffing firm.
Q: Oftentimes, temporary jobs turn into permanent, full-time positions. But how can both parties – the employer and employee – be sure there is a good fit?
A: The easiest way to resolve those concerns is by using an Evaluation Hire program that allows an associate and employer anywhere from 60 to 120 days to work together and determine if both parties want to make a long-term commitment. During the trial period, the staffing firm serves as the associate's employer.
Associates have the opportunity to see if the business is a good fit and if it's not, they can try something different. Likewise, small business owners can evaluate a person's skills and work habits before making a long-term commitment.
Voice of Experience
Q: While large companies often hire employees on an ongoing basis, that's not necessarily the case for many small businesses. What can happen when recruiting and interviewing isn't a common routine and how can a staffing firm solve that dilemma?
A: Knowing how to properly conduct an interview is certainly a skill. What you are looking for and then finding it are different matters and you need to interview regularly to develop those skills.
It's similar to being a professional athlete. If they don't play on a regular basis, their skills aren't nearly as sharp. It's very much true of interviewing, hiring and reading people so that you can understand from a performance point-of-view what you can expect from them.
Oftentimes, hiring an employee ends up being based on emotion rather than facts and skills. When you determine that a person is a bad fit – and companies sometimes wait months and even years to come to that conclusion – the whole cycle begins over again with no guarantee of a different outcome.
However, a staffing firm's evaluation hire program eliminates the guesswork. In most cases, associates prove a perfect fit. If that's not the case, the situation is easily remedied and both the employer and associate benefit in a timely and cost-effective way.