Should I Hire a Staffing Agency?
Is your business looking for ways to save time and money when it comes to new employee hiring? Perhaps working with a staffing firm has crossed your mind. Yet, the costs of doing so have kept you from looking into the solution? In truth, the benefits of a staffing partnership can not only help you save on long-term hiring costs, but you are also more likely to get the right candidate fit for the position in which you are hiring.
Having the right team in place, whether construction, manufacturing, or engineering, makes any project run smoother. And if you’re new to the staffing industry, just know that at FootBridge, we work with your company to fill positions on a contract basis. Doing so means we pay the employee and assume insurance, hourly rates, and benefits. There is no on-boarding, and when a project comes to completion, you don’t have to assume layoffs. The contract simply comes to an end, and the contractor moves onto their next role.
What’s more, at FootBridge, we are so much more than a staffing company. We have organizations that call and ask us, “How do we know you’re the right solution for our hiring needs?” Our answer is we don’t. But we can talk with you to better understand your hiring challenges. From there, we can strategize a staffing solution that fits your needs. If we aren’t the right solution, you can be confident we will connect you to someone who is. Now, let’s talk about costs.
The Costs of Hiring Direct Employees
The true cost of direct hiring may surprise you. According to Human Resource Management, it costs, on average, $4,129 U.S. dollars to hire a new employee and 42 days to fill a position. In other instances, one leading expert says to expect to pay in the range of 1.25 to 1.4 times a person’s base salary when hiring direct.
Let’s break those numbers down to someone who makes a yearly base salary of 100k or $50 an hour. Add to that health benefits, liability insurance, workers compensation, vacation and sick time, paid holidays, and onboarding – well, the costs add up. You are effectively paying 125k to 140k to hire the employee. But with a staffing firm markup, which is the fee paid on top of a base salary, that pay rate could be $70 an hour. Alternatively, if the true hiring cost is more like 1.4 percent of the hourly rate, you are looking at just under $75 an hour to hire the employee.
Understanding Recruitment Fees
As mentioned above, whether it’s a $70 an hour pay rate or $50 – a staffing firm is not necessarily more expensive than direct hiring because we take on the employment cost. Hence the recruitment fee. What’s more, not only do we screen candidates, but if they don’t work out within the first one to two weeks of employment, the client pays nothing. In the rare occurrence this happens, we rethink our strategy for finding another candidate. Too often, however, companies assume recruitment costs are out of the ballpark of what they can afford. There can be a significant cost and time savings when hiring contract employees.
There’s a lot more that goes into employee recruitment and staffing than database searches and matching a person with a job. Our recruiters spend the bulk of their time sourcing, pre-screening, interviewing candidates, and investing in the client relationship. This saves your HR team from having to sort through dozens, if not hundreds of resumes at a time. If you plan to perform your own cost analysis, consider how much time management spends going through applications and screening candidates. You can receive hundreds of responses from a single ad, which, let’s face it, can take valuable time out of your schedule.
Contract versus direct hiring
To summarize, a contract employee is usually no more expensive than direct hires. Direct hiring for project work means keeping an employee on staff all year whether you need them or not. Employees may work on proposals or “on the bench,” while the business is still paying the employee salary and benefits. Rather than taking on the burden of having a wage on your books, a staffing agency partnership means you only pay hourly wages when worked.
As always, hiring top talent is essential to the success of your business, and our team is here to help you find the right people with unmatched expertise.
Let’s collaborate today to fill your open positions. We are ready to source your next top performer for continued business success.