With one of the most turbulent years in recent history finally behind us, businesses across the board are trying to make tough financial decisions for the year ahead. Now is the perfect time for those that rely on staffing agencies to revisit these partnerships and ensure that they are still beneficial to the business at large. To help guide the way, we’ve put together a list of our top fours reasons to regularly review staffing partners:
Potential Cost Savings
Just like any other business expense, how much a company pays for a staffing agency should be reviewed before every contract renewal. Think of it like shopping around for car insurance; if a new provider offers more competitive rates with the same (or better) service, then what are the remaining benefits of keeping the current provider?
To help put things in perspective, most staffing agencies charge a fee based on the percentage of new hire’s wages, which can range anywhere from a 25% to 100% markup. That’s a big difference, and a big opportunity for cost savings!
Increased Interview-to-Hire Ratio
For the first time in 20 years, the number of U.S. job openings has surpassed the number of active job seekers, leading to a whopping 1.1 million difference between the two. With industries across the board struggling to fill jobs during peak times of need, it’s more important now than ever to have a staffing partner that can pre-screen applicants and pull in new hires efficiently.
Quality of Applicant Pool
Of course efficiency can mean very little when the quality of new hires is lacking. One new employee who is properly trained for the job, always shows up on time, and brings a positive attitude to the workplace will often provide more value to the business than ten new hires who do not. In fact, businesses can suffer significant financial loss when new hires turn out to be a poor fit for the job. One survey of 2,257 full-time hiring managers and human resource professionals found that businesses lost, on average, a total of $14,900 per bad hire. All the more reason to make sure chosen staffing agencies have a rigorous recruitment process.
Similar to having a respectable interview-to-hire ratio, a staffing company that can whittle down the time it takes to place qualified applicants holds a competitive advantage. According to a recent cross-industry report from the Society for Human Resource Management, the average time to fill an open job is 36 days. That’s a long time to wait, especially for businesses already operating with reduced staff from exceptional circumstances (i.e. COVID-19).