8 Ways that Companies can save cost thru Staffing services
Human Capital Solutions LLC
"8 Ways that Companies can save cost thru Staffing services"
Companies are always looking for ways to improve quality, efficiency and save money. One of the ways any companies can save costs is through a staffing agency. Hiring professionals 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 8 unique ways staffing agencies save you cost.
1. Elimination of Hiring Costs
Most companies who have ever tried to hire a new employee is aware of the complications it takes to find the best candidate available on the market. Not only does the process take time, but it also has costs associated with it. One of these costs is advertising and marketing for the job. Also there are also costs to prescreening and testing potential candidates, but definitely, the most costly is the time it takes to screen resumes and conduct interviews.
2. Adjust your Staff to Current Company Conditions
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 cost. 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.
3. Reduction in Overtime cost
When you are short-handed, it affects every part of your company 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.
4. Elimination of Benefit 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.
5. Decrease Turnover Costs
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.
6. Allow you to try Candidates Before you Commit.
Finding the right fit for your company 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 company. 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.
7. No extra Overhead Cost
There are many costs to owning and operating a company. 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.
8. Reduction of Payroll Expenses
Payroll is tricky and companies large and small can look at their payroll partners and find savings as the per employee cost of payroll can range from $40-$90 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.