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Five Key Benefits of Using a Staffing Firm

According to the 2011 Staffing Industry Economic Analysis report published by the American Staffing Association, U.S. staffing firms created more new jobs than any other industry between the years of 2009 and 2011. The Association observes that this surge in the staffing industry follows a pattern seen in other periods of economic recovery: Businesses meet rising demand for goods and services by hiring temporary and contract workers first.

Why do so many businesses turn to staffing firms when it is time to beef up capacity? Staffing firms are best positioned to respond quickly and effectively to changing hiring needs. Here are five key benefits companies consider when they decide to enlist the help of a staffing firm.

Benefit #1: Cost savings. Hiring can be costly – advertising for open positions and paying for drug screening and background checks can add up. Being an employer is pricey, too – processing payroll, administering benefits, paying for labor when there’s a lull in the workload, covering time-and-a-half for overtime. A staffing firm can mitigate these costs by shouldering the employment process from finding and vetting new hires to absorbing the costs associated with paid time off, health insurance, Workers’ Compensation, Unemployment Insurance and administrative duties.

Working with a staffing firm affords companies, smaller companies in particular, the flexibility to remain lean and nimble in responding to fluctuations in workflow, the need for specialized talent, and growth initiatives. By outsourcing staffing such companies have a virtual, as-needed recruiting department, enabling them to avoid the considerable expense of retaining a recruiting expert on the payroll.

Benefit #2: Lower risks. The Bureau of Labor Statistics states that companies are increasingly relying on the expertise of staffing firms to navigate what it callsan environment of “increasing complexity of employee-related laws and regulations.”

There is a fine line between a temporary hire and an employee, and legal and IRS implications walk that tightrope. A top-notch staffing firm provides in-depth, up-to-date knowledge of the nuances of such laws and regulations and can protect companies from litigation and penalties.

Additional risks that can be averted with the help of a good staffing firm are those associated with hiring the wrong candidate. Having a person on the team who cannot perform the work required or one who simply does not fit within a company’s culture can damage the productivity and morale of the whole team. A good staffing firm employs a rigorous screening and hiring process to ensure the candidate hired has the qualifications and traits to be a good fit for the position and the workplace. Furthermore, many of the better staffing firms offer temporary, temp-to-hire, and other arrangements including guarantees to ensure a fit.

Benefit #3: Increased candidate pool. An established staffing firm has a much larger pool of qualified job candidates than a typical employer does. Building and maintaining an extensive talent network is “job one” for a staffing firm. A larger candidate pool means when a company is staffing up for a special project, bringing on seasonal workers or building its management team, the staffing firm can provide better, quicker access to the best talent for the job.

In 1997, business consulting giant McKinsey & Company published a now-famous famous study and book titled “War for Talent.” McKinsey updated its study in 2011, and concluded that the shortage of tech-savvy, educated professionals predicted in its earlier report is intensifying. A staffing firm’s candidate pool can be a company’s best ally when competing for top technical and professional talent.

Quick access to workers can be of the essence when a company is responding to a sudden increase in demand for its goods or services. A staffing firm can leverage its candidate pool to bring in a large number of qualified workers quickly to meet such a demand. Some firms even provide vendor-on-premises services, in which they place a staffing representative onsite to handle ongoing, large-scale staffing needs.

Benefit #4: Time savings. Any HR representative who has spent days sifting through piles of Craigslist ‘work-wanted’ postings or sorting through stacks of resumes (many destined for the “reject” pile) knows the time-consuming nature of hiring; and this doesn’t take into account the time spent pre-screening and interviewing.

Filling a job opening through a staffing firm greatly streamlines the hiring process, freeing up company resources to address day-to-day tasks and other profit-producing activities. For the company, the process involves working with the staffing firm to define job requirements, interviewing a carefully selected, pre-screened set of qualified candidates, and selecting those that fit the requirements.

Benefit #5: Enhanced competitive position. A productive team of qualified, dedicated “A” players is any company’s ticket to competing effectively in the marketplace. A staffing firm can give a company a leg up on the competition by providing access to talent the company wouldn’t otherwise have. In addition to the above-mentioned candidate pool, an experience staffing firm uses hiring methods that are not available to the hiring company. For example, the firm can approach passive candidates – professionals who are currently employed but may be open to new opportunities. The firm can also recruit directly from competitors, which may be unethical for the company itself to do.

Having a trusted staffing partner can be an essential ingredient of success in getting and keeping the right team in place to address market opportunities. Working with a staffing firm gives a company access to a broader base of candidates, and that access comes with cost and time savings. It also comes with competitive advantages. The staffing firm lends the company its in-depth knowledge of employment laws and regulations, which offers protection against lawsuits and other risks in an increasingly complex labor environment.

The Bureau of Labor Statistics anticipates that the use of staffing firms will continue to increase over the next few decades. The benefits make a clear case that this is a practice worth considering.