Temporary Employment: value beyond markups.

Temporary Employment Services has a huge market right now, especially with companies struggling to source their labor needs for peak season in retail and distribution. How much your are paying for those services is a hard number to truly quantify.

First, you obviously have the markup rate. What is included in that rate? Do you pay separately for background checks? For ACA riders? For taxes?

Also, how is turnover affecting your value? The turnover rate for warehouse labor, for instance, is typically over 260%, and 40% of that turnover can occur within that first week. If you hire 50 temps for your warehouse, you can expect that you’ll have to replace 20 of them within the first week, and to keep a full staff, you’ll need to recruit, train, and manage about 130 people every year in order to stay fully staffed throughout the year. The faster the turnover occurs, the less value they bring. If you are tracking output by employees, you assuredly have higher productivity rates from your full time employees versus your temps, even when they are long term temps.

If we have worked together, you will undoubtedly have heard me say, “Negotiating this area is not a one-time event,” and in the area of temporary employment services, that rings true most of all. Their is value in achieving lower markup rates, of course. But the real lasting value is in managing a program to ensure that you are meeting productivity goals, headcount conversion, and getting quality candidates. The value is in what the workforce can bring to your business, not just what is one the invoices from your agency.

I’ve lead a team to manage a company’s temp labor of over $90M per year. While business grew, we reduced the expenses on temp labor by $10’s of millions of dollars in hard savings and cost avoidance. While I know the best practices, I also can help to create what your specific business needs and help you manage to better results…all while saving money.

Email or call me to set up a time to discuss. You can also book time directly on this site. I look forward to talking to you.

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