Staffing companies need to be adaptive and resilient to survive ever changing environments. Rapidly shifting economic conditions, the galloping speed of technological advancements, and changing employee expectations have culminated in new challenges and new opportunities for staffing companies. Although demand for labor is at an all-time high, so too are business risks. Staffing companies need to shield their organization against the threats of a changing economy and optimise efficiencies to be resilient and take advantage of the current staffing boom.
Build your company’s organization to be resilient to changing economic conditions. Follow these nine steps to bullet proof your staffing company, raise brand awareness, and position it for growth in a highly competitive industry.
Step 1. Identify your business goals
Setting goals is essential to achieving profitability and growth. Well developed goals provide a roadmap for a company’s actions and keep it headed in the right direction. When establishing business goals, start with the big picture first – what are the market conditions, what do customers need, what do you want your company to stand for and achieve?
In their book “The Management of Organizations,” Barney and Ricky W. Griffin state that organizational goals serve four basic functions:
- provide guidance and direction
- facilitate planning
- motivate and inspire employees
- help to evaluate and control performance
Goals are categorized as either long-term or short-term. Long-term goals define the vision for where key decision-makers want the business to evolve. Short-term goals provide motivation to organize resources, optimize productivity, and gauge advancement. Tap into your internal strengths to identify achievable milestones that can help monitor progress towards long-term goals. This includes surveying relevant stakeholders such as employees, management, vendors, and customers as they have different but vitally important insights regarding your organization.
Identify specific, measurable, attainable, realistic, and time-sensitive (SMART) goals that give everyday tasks more meaning and purpose. Goals should be present in every business plan and should become a regular part of ongoing business operations.
Step 2. Financial planning, analysis and forecasting
It’s best to begin your financial planning by reflecting on where you’ve been and on your current position. Use these insights to successfully plan where you want to be next quarter, next year, and in five years. Financial planning and analysis (FP&A) and forecasting can provide management with valuable insights into how the business performed in the past. Then consider how this knowledge may help you shape success in the future.
Accurate analysis and forecasting are difficult for many businesses to achieve. However, these are typically companies using outdated tools and models, or companies that do not possess the expertise to make the needed adjustments throughout the year. Take your organization from static forecasting to strategic agility – rolling forecasts are rapidly replacing traditional, static budgeting methods. Instead of remaining constant throughout the year, a rolling forecast will “update” itself based on recorded YTD financial results, the initial budgets, and new revenue and expense forecasts. Rolling forecasts allow the business to adapt and monitor projected outcomes resulting from change.
Use what-if scenarios and break-even analysis to explore the viability of various strategic objectives. What-if analysis predicts and quantifies the likely impact of a specific change on a company’s performance and long-term objectives. Break-even analysis measures profitability. This level of due diligence will allow you to project profits and losses build your competitive pricing model, and help you make better investment decisions.
Step 3. Write a growth plan
To be truly successful, you need to be looking ahead and planning your growth. After gathering feedback from stakeholders and performing due diligence, identify what works, what needs improvement, and what could be added to better position your company for growth. Now is the time to write a growth-focused business plan. A growth plan or a strategic business plan is different from a traditional business plan. A business growth plan provides actions to take, goals to achieve, and a timeline to achieve your long-term goals.
Plans designed to implement near-term growth strategies will span one to two years and are broken out by quarters. That way, the company can track goals and adjust the plan as needed to improve outcomes.
Your growth plan should:
- Identify long-term goals.
- Identify value propositions.
- Clarify your understanding of the market.
- Reassess your target market.
- Establish short-term goals to advance towards long-term goals.
- Identify areas of opportunity.
- Include a marketing strategy that supports your goals.
Once established, share growth plans with key stakeholders such as management, staff and temp employees. Clear communication of the growth strategy throughout the organization will align priorities and create accountability for meeting milestones.
Step 4. Embrace digital transformation
The once traditional industry of staffing and recruiting has now evolved to a technological based industry. The number of staffing companies that have adopted digital transformation has exploded over the last two years. Industry-wide adoption has increased 95% from last year, and an incredible 236% from two years ago.
Everything from job boards to the application process has gone digital. Automated recruitment marketing is now taking hold to help companies attract more, and better qualified candidates. Technologies such as video interviewing and programmatic advertising are enabling firms to capture higher returns from recruitment campaigns. Firms are engaging more effectively with current and past candidates and even leveraging technology to capture referrals. Digital transformation has allowed staffing companies to better meet customer needs, attract more qualified candidates and bolster profits. Investigate, plan, and invest in technologies to increase productivity and gain market advantage over the competition.
Step 5. Optimize recruiting and retention programs
In today’s market of high labor demand, staffing companies need to be able to source, engage, and nurture candidates at scale, and do so very quickly. Streamline your entire recruiting process; from sourcing to job posting to interviewing and job placement. Build out your processes using advanced recruitment software or recruitment ATS/CRM. Use templates, sequences, automation, and other support tools to complete as many tasks as possible.
Personalize company data and communications using dynamic fields in email and text templates to provide a better candidate (or client) experience. Be sure to include a re-engagement process for talent. Never lose sight of candidates – they may not be the right fit now but may be perfect fit for a different job opening next month.
If recruiting is a top priority, then so too are retention programs. Employees exit jobs for many reasons, yet most of these reasons are relatively common. Following are the most widely cited reasons for leaving a job:
- Inadequate salary and benefits
- Feeling overworked and/or unsupported
- Limited opportunities for career advancement
- A need for better work-life balance
- Lack of recognition
- The desire to make a change
The cost to replace an entry-level employee is between 30% and 50% of their annual salary. A mid-level employee costs at least 150% of their annual salary to replace. A high-level or highly specialized employee turnover cost is approximately 400% of their annual salary. Develop incentives, career development training, and improved benefit programs to drive job satisfaction and, ultimately, employee retention.
Step 6. Communication is key
A large part of a candidate’s decision-making process is based on how they are treated during the recruitment process – and positive candidate experience is on the decline. A poor candidate experience will dissuade talent from accepting a job position, discourage them from applying for another position, and keep them from referring other prospects.
Research shows that effective communication and feedback from pre-application to onboarding promote positive candidate experiences. Feedback at every stage of the recruiting process is a significant differentiator that separates one staffing company from another. Use recruiting technology to improve communication with candidates and to support recruiters in their roles.
Step 7. Know and comply with current laws and regulations
Staffing companies must be aware of the laws that are administered by multiple governing agencies in multiple career fields. You must also comply with laws regarding employee benefits, classifications and taxes.
Work practices and resources for staying current with laws and regulations include:
- Consult with your legal counsel.
- Tap into diverse professional networks
- Join regulatory forums.
- Sign up for emails from HR organizations.
- Subscribe to a variety of relevant websites.
- Conduct regular compliance information sessions.
- Update your employee handbook annually.
To improve efficiency, investigate the use of compliance software to continually track, monitor, and audit business processes. These technology platforms enable you to manage your company compliance activities to ensure they are aligned with applicable legal, industry, and security requirements.
Step 8. Consider your liability
Staffing companies may face legal responsibility for the actions of the people they place. This could include deliberate damage done during work, accusations of negligence, or an accidental breach of confidentiality. Be sure to protect yourself, your company, and your employees with adequate bonding and liability insurance.
Step 9. Secure temp agency funding to support growth
We’ve talked about setting company goals and developing a growth plan to achieve success. But how can you accomplish this in a timely and affordable manner while maintaining the essential obligation of meeting payroll?
Few staffing companies qualify for bank financing. For those that do, funding is slow and restricted. The qualification and underwriting processes are document-intensive and time-consuming. Lender oversight is intensive, and restrictive covenants confine capital management.
The more flexible solution is payroll funding. This mainstream funding strategy is provided by alternative lenders specializing in business financing to staffing companies. Benefits include:
- Easy qualification, streamlined underwriting, and quick onboarding to provide fast funding.
- More flexibility with few covenants, no oversight, and full control of how and when to use your funds.
- Credit limits grow as your business grows.
- More access to more money in more ways than debt financing.
- A dedicated account manager and professional accounts receivable management optimize cost efficiency and ensure uninterrupted cash flow.
Growing your staffing business means investing in your company to keep pace with demand. Having the best growth plan is moot without the capacity to implement it. Working with industry-specific alternative lenders provides the opportunity for fast, flexible funding that is tailored to your company’s needs.
Bullet proofing your company in a changing economy can be crucial to the long-term survival of a business. Indirectly it can help you attract new talent, drive business performance, increase profits, and strengthens the company’s position in the market.
Build your company’s organization to be resilient to changing economic conditions and concentrate on candidate acquisition – the industry’s number one priority for 2022. Follow industry leaders who invested heavily in digital transformation. Staffing firms who have already embraced digital transformation reported a stronger 2021 and have higher expectations for 2022.
The economy may be changing, but change is fertile ground to establish a competitive edge. Bullet proof your staffing company and embrace change as your company’s opportunity to grow and become more profitable.
Whether you support a workforce of 10 or 10,000 you need to consistently meet payroll on time to attract and retain the highest caliber of talent. eCapital’s payroll funding solution is designed to convert accounts receivables into immediate cash to manage ever changing payroll registers. eCapital keeps pace with your working capital requirements from start-up to growth, through business transition, economic disruption, and labor market fluctuations. Our payroll funding solutions are easy to qualify for, quick to set up, and simple to manage. A dedicated account manager will oversee daily transactions to ensure funding requests convert to reliable, accurate transfer of funds without delay or surprises.
For more information about how eCapital’s payroll funding solutions and industry expertise can help your staffing company optimise efficiencies and be more resilient to a changing economy, visit eCapital.com