TIP OF THE MONTH: TRY AS YOU MIGHT, YOU CAN'T IGNORE COST

In most any service business, the one that charges the most will almost always try to justify their existence by pushing value. In our business this usually includes such things as saying they supply better temps or that they guarantee no turnover or that their temps have benefits. It's most always fluff. The truth is, we all draw from the same labor pool, temps almost never qualify for the benefits and they are not always the most reliable bunch by nature.

This being said, the bottom line is that the staffing industry is built around saving you money. We do this by accepting many of the insurance risks for you, by providing "on-time" contingent labor built around your work schedule, and by reducing your hiring costs. One report has shown that 80% of all temp users do so because of variable or unpredictable workloads.

Consider this, a recent Staffing Industry Analysts survey indicated that a third of contingent labor buyers said that their expenses would increase 25% if they did not use temps. The same survey cites buyers claims of cutting labor costs by 10 percent, 20 percent or more by using contingent labor. Imagine the impact on your business if your hourly labor cost went from $20/hour to $25/hour overnight?

According to Alexi Zelenev in research done for the Federal Reserve Bank of Chicago, it's about flexibility. Flexible temporary labor smoothes out unpredictable demand. "The presence of temporary help services in a region reduces job search costs and informational asymmetries by helping to match the workers who are looking for a temporary work opportunity with the firms that need the temporary help" according to Zelenev. Survey participants said that "unpredictable workload levels" encouraged them to use contingent labor which produced a 44% savings over those that said flexibility was not a factor. Rapid growth and difficulty finding qualified applicants were the two most common factors after flexibility cited by buyers for using contingent labor at 68% and 51% respectively.

A Staffing Industry Analyst survey taken in 2004 found that the attitude of buyers toward using contingent labor was that 31% of the organizations participating discouraged its use and only 10% encouraged its use. The same question asked in 2010 produced almost the exact opposite with 30% encouraging the use of contingent labor and 18% discouraging its use.

The bottom line to be learned out of all this is that the staffing industry was created to lower your cost of labor....and it does. How you maximize its potential will determine how much of a savings your organization will receive.