Today’s guest blogger is Patti Steen with The Pelsten Group located in Seattle, WA. The Pelsten Group is a recruitment firm that focuses on all levels of positions within IT. The majority of their clients are in the Seattle area but they actively support NPAworldwide across the US. Patti is currently serving on the NPAworldwide Board of Directors.
Is contract staffing for you? I have worked for years in both contract and direct hire placement and have wondered why more firms do not supply both to their customers. Current trends in staffing show a 6% increase in contract staffing during 2015, bringing the total spend to US $115 billion. If your firm is not currently supplying contract staffing to your customers, it may be time to take a look at this growing service.
I talk to a lot of small firms that are only focused on direct hire. They have a lot of pressure to fill requisitions! This pressure can cause them to take on orders that are not ideal or customers that are difficult to work with. A lot of that anxiety goes away when you are not “unemployed” every morning. Contract staffing gives you a weekly paycheck…so you can relax and love what you do.
- Steady Cash Flow – When you have contract staff working, you generate consistent revenue that can provide stability for the rest of your business. Let’s look at what can happen with just a few people working on contract. If you have 5 contractors working at all times and you earn US $10 margin per hour, you would generate an additional $104,000 annually. Wouldn’t that give you some peace of mind and flexibility to build your business?
- Secures Your Customer – It is very likely the customers you support with direct hire services are also using firms to help them with their contract needs. You don’t have to find new customers to dip into the contracting side…you already have them in place. You become their “one-stop shop.” Why let competitors in the doors when you can do it all?
- Expand Your Referral Network – We all love referrals. You will expand your network not only within your customer, but also have a larger candidate pool to tap into for referrals.
- New Offering for Direct Hire – As we all know, companies are working on very tight budgets. In some situations they have to pull the plug on a direct hire placement due to changes in their budget. Well, maybe you can save that placement by offering a temp-to-hire. By spreading the cost out over a few months, your customer might be able to make it work. Don’t let their budget affect your budget…get creative.
What has been holding you back from jumping in to the contract services pool?
- Funding the Payroll – This a big one! My firm is small and I did not want to have the burden of funding payroll, processing time cards and issuing checks. That would divert my attention from recruiting. I decided to outsource all of that work to a payroll agent. The payroll agent handles all of the back office and they are the employer of record. As the employer of record, they are accountable for unemployment, workers compensation, insurance, etc. This leaves me to do the work I enjoy.
- Managing Contract Employees – This can be simple or a bit more involved depending on the customer’s needs. The employee will receive direction from the customer on their day-to-day work, but I am their contact for any human resource-related questions/concerns. I check in with the customer and the contract employee on a regular basis to see how the assignment is going…but honestly, it is similar to what we do to keep a direct hire candidate engaged.
There is a little drama sometimes but isn’t that why we like this work…we never know what will happen next!
Contract staffing helped me get my company off the ground and continues to be a large part of what I do today. I hope this helps you decide to give contract staffing a try!
Image courtesy of nirots at FreeDigitalPhotos.net
