Tip of the Month: Get What you Pay For!

As I was browsing through my recent edition of SI Review (Staffing Industry) I hit upon a survey taken of benefits staffing firms offer temps. Benefits for temps has always intrigued me because it is a classic case of paying for something that sounds good but really isn't. First for the survey. It found that staffing firms offer the following benefits to temps:

•                 Paid Vacation 57%          
•                 Dental Insurance 51%
•                 Unsubsidized medical coverage 51%
•                 Life Insurance 45%
•                 401(k) employee only contributions 42%
•                 Subsidized medical coverage 40%
•                 401(k)match 30%
•                 Paid sick days 26%

What we have here is a lot of feel good fluff with little meat to it. Let's look at paid vacation/holidays. These are a great benefit to retaining long term temps and reducing turnover if they ever meet the qualifications to earn them.

Most staffing companies require the temp to work anywhere between 1200-1500 hours in the prior 12 months to get paid vacation/holidays. The problem is that most never make it. And because the staffing company has to factor the cost potential for having to "possibly" pay out these benefits, in the end the customer pays for something the temp never sees.

Most of these other "benefits" are mostly paid for by the temp. Unfortunately the temp either cannot afford  his/her cost of the benefit or the coverage is so weak as to not be worth the trouble it goes unused. I mean really, how can an $8.50/hour pay rate support the cost of medical coverage? Once again the customer may be picking up the tab for something that sounds better than it really is.

So what is the answer? We suggest that you pay for the benefits you want temps to earn only as they earn them. Vacation pay is the easiest example of this strategy. Rather than have your supplier build this cost in to their markup, only pay for vacation that is actually earned and paid to the temp working at your facility. This way you don't pay for something that you in theory don't use.

Many of the staffing suppliers that advertise great benefit packages for temps do so knowing that they can bill you upfront for these programs touting reduced turnover and higher quality temps as the real benefit. Unfortunately for you, all they really benefit is your suppliers pocketbook.

I will admit that the value of benefit packages is better served for those of you utilizing professional staffing/contracting personnel (i.e. engineers, accountants, IT, etc.) where packages are needed to recruit top talent. Not so for much of the unskilled labor and most of the office clerical world.

So be sure you're getting what you pay for!