If you’re a small business owner or manager, you’re likely well aware of both the difficulty and expense of recruiting, vetting, and hiring new employees. In fact, you may have even thought it would be easy. After all, platforms like LinkedIn, Indeed, CareerBuilder, and others were supposed to make finding and hiring the right candidate a piece of cake, right? Just look at a few resumes, pick the one that looks the most qualified, and you’re all set!
Unfortunately, the reality can be quite different. In an economic environment where the country is close to full employment, it has become more and more difficult to find the right talent, and when you do, that perfect candidate may likely end up costing you more than you were expecting. Besides the salary and benefits, you also have to deal with the costs of the recruitment effort itself, the many person-hours that go into reviewing dozens (or hundreds) of resumes, pre-screening phone calls, conducting interviews, handling any pre-employment testing, background checks, and even drug tests.
Of course, all of that time costs money and is time and effort that you aren’t otherwise able to spend investing back into your company. Perhaps you’ve thought about hiring a staffing agency to help manage this process for you but figured that on top of the salary you’d be paying the new employee(s), it wouldn’t be cost-effective. What you may not have realized, though, is that working with a staffing agency can actually help you save money!
Staffing agencies have become increasingly prevalent in today’s rapidly changing business landscape, generating more than $110 billion annually. Staffing agencies work with clients to fill either temporary or permanent positions, anything from unskilled labor to executives. By contracting with a staffing agency, they will work to match up your list of job requirements – or even help you to clarify your requirements – with the best candidates. They will also handle all of the pre-screening and pre-employment processes for you, whether you require a background investigation, drug testing, or skills testing.
Staffing services are also great for industries and businesses that go through busy and slow cycles by providing temporary workers to meet fluctuating demand. The amount of time (and cost) a business owner needs to commit to recruiting, screening, and hiring temporary employees that may only be needed for a couple of months add up very quickly. A staffing agency can manage that process more efficiently, effectively, and end up saving you money.
Another way that staffing agencies can help clients to save on costs is through the administration of payroll and benefits. The costs for benefits alone can be substantial – from 1.25 to 1.4 times the base salary — and can amount to nearly 25 percent of a company’s payroll. Payroll administration can also cost anywhere from $20 to $100 per employee each month.
Furthermore, in industries that typically incur higher turnover rates, the cost for recruiting, hiring, training, administration, and other overhead costs can be painful for many businesses. Based on an analysis by the U.S. Bureau of Labor Statistics, turnover can cost an organization as much as 33 percent of total compensation, including wages and benefits. By handing off these processes to a qualified staffing agency that can manage this more efficiently, you are actually decreasing overall overhead costs.
While it may seem cliché, it is true that “time is money.” As a business owner or manager, you are likely to have recognized that reality early on. And, particularly with small businesses, it often does not make good business sense to have your own internal HR department to handle employment recruiting, as those overhead costs can be substantial. This is why it makes sense to partner with a reliable, proven staffing agency that understands your needs, can work and grow with you over time and can help you save money when it comes to managing everything from recruitment to payroll administration.