Recruiting new employees can be a costly and time-consuming process for companies where significant resources are used, but where no guarantees are offered. A bad hire can leave lasting damage on morale, relationships and can affect project and production deadlines and outcomes. As an employer, you know the value of top talent to your bottom line and you need individuals that can drive your business forward to the fullest extent. You are the expert who knows who is needed on your team in order to drive business, remain competitive and maintain your bottom line.
By considering outsourcing, you mitigate liability, save time and in many ways save money in the long run by ultimately avoiding the costly effects of a bad hire. Depending on the role, you can look into staff augmentation to help you as your business grows for short-term and long-term needs. You can partner with an agency for project work, temporary labor, or temp-to-hire where you can eventually hire the successful contractor to your team and be sure that they are a long-term fit for the company.
Staffing agencies offer:
- Expedited and streamlined hiring process
- Specialized talent for short-term projects
- Incredible savings for hiring cost and reduced liabilities
- Allow more time for internal projects
- Ability to extend or shorten contract assignments as needed
Hiring Steps to Consider:
- Job Posting Technology
- Resume Screening
- Interview Time Cost
- Background Checks
- Skill Testing
- Drug Testing
- Orientation Process
- Adding to Payroll
- Assessing Long-Term Culture Fit
Liability Costs to Consider
- Workers Compensation
- Unemployment Claims
- IRS Worker Misclassification Audits
- Negligent Hiring, Retention, and Supervision
- Wrongful Termination Accusations
- Wage and Hour/Overtime Compliance
This where a staffing agency can help. They take the burden of all the above costs and time to let your expert employees do their jobs and outsource this process. But what is the cost of using a staffing agency?
About Staffing Agency Pricing Models
There are misconceptions related to agency bill rates that are created when agencies use pricing models that focus solely on bill rate. In some areas of professional staffing, for example, it is considered impolite for customers to inquire about pay rate; which can create a false perception that all agencies charge the same, which is almost never the case.
While the upside of using “bill rate only” pricing practice is its simplicity – making it easy to shop and compare – the downside of this model stems from the lack of transparency created by this simplicity. It is a best practice to ask your staffing agency to break down the pay rate, bill rate and associated costs. Transparency builds trust among clients and companies.
Buyers often have no idea what their bill rate entails in terms of employee quality and service standards. A more popular pricing practice known as the pay rate pricing model, is designed to increase transparency and normalize pricing practices.
Are You With Me So Far? Let’s Do the Math
Staffing agencies charge a percentage mark-up of the hourly pay that is typically 50-65% or 1.5-1.65 mark-up of the hourly rate. If an employee is paid $10 an hour, the bill rate will be about $15 an hour. The most significant component of your staffing invoices are associated with your agency’s legal responsibilities for the candidate such as hourly compensation, taxes, benefits and payroll costs. These are the same COSTS you would be paying if you hired the employee directly, which leaves only 15-35% of the bill rate to cover the actual services provided – sourcing, recruiting, interviewing and assigning the temporary or contract worker.
Why You Should Use Agency 8 as Your Staffing Agency
Agency 8 uses a unique 8-step recruiting process where every candidate we select is carefully curated to fulfill the requirements of your job and align with your values and company culture. 50% of our candidates are referrals, we have a 4.9 out of 5 service rating, and our direct hire placements have a 97% success rate and offer a 90-day placement guarantee!
Let Agency 8 be your main contact for all of your staffing and recruiting needs. By using Agency 8, we will identify and attract top talent, align salary and hourly requirements to fit within your budget and also take on onboarding service costs. This will often outweigh the expenditures of your internal hiring to ensure you find the right addition for your team.