Stephanie Klein

If your company is like most, labor costs are either the highest or the second most expensive item you have.  That said, most business leaders inherently understand that having the right people in the right jobs, regardless of those costs, is the most important factor in running a successful company. To help companies manage these critical business costs, staffing industries emerged, and have been thriving for the last 60 years. In fact, according the to the American Staffing Association, the staffing industry generated approximately $97.1 billion in sales in 2010.  Many organizations use staffing companies as a strategic partner that enables them to leverage their risks, hire talent quickly, and keep certain labor costs variable when appropriate.

Further, using a staffing firm allows a company to improve productivity by bringing in one specialized person to manage a unique project, or by recruiting a whole team of people to ramp up head-count quickly to address an immediate but unsustainable need.  Utilizing a staffing agency can also generate tremendous cost savings because as the staffing firm is the employer of record, the organization can avoid the ever-increasing costs of healthcare benefits, unemployment insurance and paid time off.

It’s no secret these costs savings can bring a smile to any CFO’s face, but it’s important to also maximize this investment by vetting the firm you want to work with.  Ask these four questions before making a decision about a possible partner:

  • What’s their specialty and experience?  For every recruiting need, there is a staffing or placement agency firm that specializes in that exact area. Sometimes having a staffing partner with depth and breadth in your niche is best. Other times, a firm with local market knowledge and local contacts is more important.  Some businesses may reach out for help solely for cost savings; or, a business may need a unique skill set or cultural fit.  Most recruiting firms fall into a single category, not all. Determine what is most important for success in filling your needs and engage the right firm accordingly.
  • Can they provide references, and do they have long-term relationships?  The old adage that people do business with people they like still holds true, especially in the “people business. “ In the people business, the “products” are people. As such, mistakes are bound to be made, but a good staffing firm has contingency plans and a record of taking accountability and making things right.  If you need an individual who will fill well into your company’s culture in the long term, your hired recruiter or staffing agency should take the time at the start of your relationship to understand your business, objectives and company’s culture. Their references should reflect that.  Also, consider whether you’ve met the person conducting the search on your behalf or have just met the sales team. Seasoned and successful recruiters will have a history of working in similar situations, have subject matter expertise, and be able to add value to the hiring process through a thorough understanding of your business.
  • What are their processes for sourcing, screening and interviewing?  Finding the right talent in our current market has become more difficult.  Finding educated, experienced and qualified talent available and interested is challenging in its own right.  On the other hand, for lower level positions, recruiters may have to sift through hundreds of resumes to find three qualified candidates.  Having a refined and tested process enables your recruiter to vet candidates more effectively, resulting in better, faster results.  Find out how they interview.  Do they check references?  Do they conduct a background check or drug test?  Are these costs extra?  Define a service level agreement to ensure each party is accountable.
  • How much is it going to cost?  No one likes surprises, especially expensive ones that don’t result in an intended outcome.  Using an executive staffing firm or a temp agency can feel expensive, so it is important to understand your market, your staffing request and the associated costs of finding someone. Will hiring a firm be worth it? Examine exactly what the firm can offer, crunch the numbers, and come to a conclusion logically.

All indicators are that hiring is going to loosen in 2012, making it a critical issue for many businesses in the coming year. Establishing a relationship with the right staffing agency to help can make the process a lot less painful, but it’s important to know what you’re getting into. Following these guidelines will help ensure you get what you need without adding another burden onto your already full plate. Happy New Year, and happy hiring.

Stephanie Klein is President and CEO of Experience Factor, a Denver staffing and placement firm, and chair of the Denver Workforce Investment Board.  Contact her at 303-300-6976.