Why Do So Many Companies Use Staffing Agencies?
The use of staffing agencies is steadily increasing. You may be wondering why this trend is occurring and if it is something you should look into. Here are the top reasons we have been given by staffing agency users and situations where you should consider doing the same.
Top Reasons Why Companies Use Staffing Agencies
The top reasons people give for working with a staffing agency involve a shortage of talent and the inability of the company to realize expected growth.
Disadvantages Of Direct Hiring
Bringing a new employee on your payroll is a substantial expense and risk. The cost of hiring someone new is high and the cost of turnover is even more. When you bring on a new employee, you open yourself up to the risk of making a bad hire, causing disruption to your workforce, potentially terminations, and the training process. Many of these risks can be mitigated by using a staffing agency.
Benefits Of Using Staffing Agencies
When you hire through a staffing agency you have the opportunity to “try” the employee before taking on the liability for their employment. They become an employee of the agency who covers the payroll, workers’ comp, new hire process, and benefits during their temporary period. This allows you to focus on the more important parts of on-boarding such as orientations and training, that really contribute to the long term retention of employees. It also gives businesses the opportunity to quickly end assignments when the employee is not a good fit. You simply call the agency and they take care of the details, including finding that employee other work.
Industry Talent Shortages
A recent study was conducted and the results showed something interesting. Thirty-eight of the companies surveyed said their biggest challenge is finding enough qualified talent. In addition, a full sixty-eight percent included this in their top three challenges.
Many people are forgoing formal education because of cost and this leads to a shortage of people in industries that require training beyond the high school level. More people are embracing the freelance or entrepreneurial lifestyle and find working for others isn't where they believe they can be happy. This means that fewer people are looking at the employment ads that companies are placing, especially when these companies are not up and coming tech companies but traditional occupations.
People who sign on with staffing agencies may be in areas outside your search area. These candidates would rather deal with an agency than having to face numerous interviews that may lead to nowhere. They want to work and are likely to have training that is necessary. The problem is they have no idea where to start their search and don't want to deal with the heavy competition the few qualified applications must deal with. The staffing agency works with both sides and brings them together.
In order for a company to grow, it needs an adequate supply of qualified employees. With a lack of talented candidates at their disposal, companies are finding it more and more difficult to even keep up with the competition, let alone grow.
The path to growth also comes with ups and downs. A company may have a lot of business at one point and then have slow periods mixed in. A company can't keep employees at the same rate when they are going through downtime or they end up losing money, pushing them further from growth. If they let employees go, however, the best-qualified ones move onto other positions, leaving the company with a lack of candidates when business again picks up.
Hiring through a staffing agency helps protect both business and talented employees by making sure the employees have other positions available during a company's slow time but also offering those employees a chance to return to that company once business picks up. This allows the company to continue on its path of growth without starting over.
When Does It Make Sense To Use A Staffing Agency?
As with anything, staffing agencies aren't the perfect answer for every business. They are, however, a viable option for the majority. Here are some things you should consider to find out if a staffing agency could help move your business to the next level.
You Want A Network That Includes Passive (Highly Sought-After) Candidates
Do you struggle with finding enough qualified talent to keep your business running as efficiently as you would like? If you lack the resources to find the kind of talent you need, a staffing agency could be the answer.
You Have A Sudden Need For Employees
If your business has recently seen a need for more employees then you need to consider a staffing agency. When your current employees feel stressed and overworked, they don’t perform at their maximum capacity and your business ends up suffering even more.
Your Business Is Seasonal
Many businesses, such as those that cater to tourists and those that have seasonal work, only need to have a full staff part of the year. Others need to increase the number of employees during the holiday season. Whatever the nature of your business, if it is seasonal, hiring a full-time staff year-round is counterintuitive. Turning to a staffing agency will get you the employees you need for the time you need them, but not leave you wondering what to do with all those extra hands in the off-season.
You Want Experts To Find The Best In Their Niche
You understand the frustration of interviewing candidate after candidate and still not finding the right people to fill all the positions you have open. You are stuck with either continuing the long process and hoping someone will answer your ad that fits perfectly or you can turn to a staffing agency. This will increase the pool of candidates considerably, increasing your chances of finding the right employees.
You Want An Employee With A Specific Skill Set
This comes in to play most often when you have a special project that requires a certain set of skills none of your current employees possess or aren't proficient in. You can put the project off while a staff member gets trained, which will most likely result in the client taking the project elsewhere. You could hire someone with this skill set but after the special project is complete, what do you do with this person? Your third choice is to connect with a staffing agency that can send you an employee for the duration of the project. The last choice is a win-win situation for all involved.
You Are Worried About Unemployment Claims
When you have to let employees go because you don't have enough work for them, you risk having to pay out unemployment. With staffing agency employees, any unemployment claims filed are the responsibility of the agency. This not only removes the paperwork from your desk but saves you money in the long run by keeping your unemployment costs lower.
You Want To Test Candidates Capabilities Before Committing
When you first hire someone, you believe it is going to work out but you can't be certain. By going through a staffing agency, you get the opportunity to work with someone on a temporary basis to make sure they fit with what you envision for the position. You learn if their skills are as stated and if their personality and work ethic are on track with what you expect of employees.
You Lack The Time For The Recruitment Process
Filling a position the traditional way takes a lot of time. You have to place ads, go through resumes, conduct interviews, and track down references. Then comes the training process. You have a full schedule and may not have all that extra time to spare. The staffing agency can do this for you, freeing you to concentrate on running the rest of your business.
You Need To Cut Recruitment Costs
It costs a lot of money to run an HR department. Not only do you need staff and space but you also need to give benefits and think about things like insurance. This doesn't even begin to get into the actual recruitment and hiring costs. A staffing agency can reduce those costs considerably. This helps even more when you are at a point where financial resources are limited.
Staffing Agencies Allow Growing Companies To Focus On Growing Not Staffing
When your company is in growth mode, the last thing you want to do is take your focus off the business to recruit and hire new employees. The reality is that when you are growing, new employees are a must but the time to find them and bring them onboard just isn’t there. In many cases, you don’t always know exactly what your needs are going to be. You know what you need today but tomorrow may be different. Staffing agencies allow you to bring on the qualified talent you need, as you need them, for as long as you need them. It simplifies the process and gives businesses the flexibility they need to grow.
Don't Just Jump in
Staffing agencies aren't all created equally. Before putting your trust into a particular agency, take the time to look around and investigate several. Talk with people who have used their services. Speak with some of their staff and ask about their recruiting policies. Find out if they can provide what you need reliably and consistently. In the end, the quality of employees they send you depends on the agency’s standard of service.
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.