Why the girl from the staffing firm is still smiling

February 19, 2009 by lisaamorao
Filed under: Cost-saving, Lisa Amorao, Service, Staffing

Lisa Amorao

I’m quite popular in social gatherings these days.

It isn’t my million-dollar Blogging Queen smile as you might think. It’s the economy. Everyone is eager to know how I’m doing at work. At a time when we are constantly hearing about layoffs, people are all ears when the girl from the staffing firm talks.

(Well, I think they should be listening to me **all the time.** But ok, point taken. The world doesn’t revolve around me — though it should. I am, after all, Blogging Queen. See the previous post by my CEO.)

But I think this goes down to the ultra shallow, pre-conceived notion that all a staffing firm does is help companies recruit. It is assumed that when times are good, companies can afford to hire a staffing firm to recruit for them. It’s money they can afford to spend for a convenient service.

So now we’re in the middle of a free-fall economy and oh my god, Lisa, are you guys going to be ok?

This is when I break out my There’s More To A Staffing Firm speech.

Yes, staffing firms are mostly associated with hiring, but the value that staffing firms offer actually becomes more apparent during tight economies. The reason is simple. Unless a company is simply headed to the deadpool, there is a need for people to keep things going, and staffing firms offer cost-effective ways to make that happen.

I usually get interrupted with “oh, that’s because companies would rather pay extra for a staffing firm to hire temps, because when you’re a temp, it’s easier to lay you off. It’s not as easy to lay off a permanent employee.”

Now, I usually find it’s best to nip this in the bud, because it puts my clients in a very unflattering light. Our clients run great companies and it doesn’t really make business sense to hire people for the sole purpose of laying them off. But ok, I get what they’re saying.

I find that a lot of people outside of the staffing function are not aware of how much an employee really costs. There are varying estimates as to how much an employee costs, from 35% to 50%. Yes. Thirty to as much as 50% on top of a person’s annual salary, after you factor in expenses that occur before a person is hired (recruiting expenses), during employment (mandatory costs such as social security, unemployment insurance, workers comp, payroll taxes, etc, more for health benefits, pension plans, etc). There are attrition costs to consider if that employee doesn’t work out. There’s no way to get back what was spent on recruiting, not to mention the additional cost to onboard a replacement.

Let’s go back to the 35-50% on-top-of-the-salary figure. Staffing firm markups are not too far from this figure. The only difference is that our clients only pay while our contractor is on the job. There are no costs before our employee works his first billable hour, no costs after his last billable hour.

Break out the numbers and it’s pretty clear. It makes sense to use a staffing firm when times are good but makes even more sense from a cost-cutting perspective.

Sure, it’s a scary market out there and I have my share of anxiety attacks over the state of the economy. But if you see me at a networking event and wonder why I’m still smiling, you’ll know. My confidence comes from knowing that we provide a cost-saving service that companies would find quite valuable in tight economic times.

Lisa Amorao has been with ATR since 2000 and has held roles in recruiting and sales before moving to her current position as marketing programs manager. Connect on Facebook or LinkedIn.

Tags: Recruiting, Service, Staffing, Value

Comments

2 Comments on Why the girl from the staffing firm is still smiling

Jason Lander on Sat, 7th Mar 2009 2:20 pm

This is a great post and explains a lot of misconceptions about contract/temporary staff. We use contractors at our company at various times for some of these exact reasons.

lisaamorao on Fri, 13th Mar 2009 3:09 pm