Starting a temporary staffing agency is a potentially lucrative endeavor. Temp agencies help companies fill positions for a certain period, like when the latter’s permanent employees are on a vacation, sabbatical, or sick leave. By working with staffing agencies, companies can remain productive while one or more of their employees aren’t around. While starting a temp staffing agency can potentially provide good returns, it also faces unique challenges.
Inadequate talent pool
More and more employers rely on the talents and services of temp agency workers because they can save on human resources costs and remain productive during their employee’s absence. Nowadays, companies needing staffing services come from different industries, and temp positions span office support staff to specially trained professionals. If your talent pool is small or not as diverse, you won’t be able to serve the staffing needs of the companies in your area. For your staffing agency to be successful, you should thoroughly investigate and understand the potential staffing needs of the town or city you wish to provide services in, and ensure that you can recruit and retain appropriate number of temp workers.
Applicants, who want to land a job, be prioritized for placement or get higher compensation, may lie about their skills, experience, and credentials. A multilayer screening process is necessary to ensure the temp workers you will place inside your clients’ companies can do their tasks with little training or supervision. Screening should include interviews to confirm skill and experience, and calling previous employers in order to verify work history. While time-consuming, this is an important step because you are only as good as the last temp worker you assigned, and if that person performs poorly, your client will look elsewhere for their temp staffing needs.
Cash flow issues
Staffing agencies typically do not receive upfront payment for placing temp workers. In most cases, the payment is given when the temp worker’s paycheck is due or once the contract is fulfilled. This can create cash flow interruptions for the staffing agency. To avoid this, many agencies sell their invoices to staffing factoring companies in order to receive funds which can be used to sustain operations.
Numerous staffing factors can be found offline and online and they vary considerably in business practices, services offered, and how much they will pay for each invoice you sell them. Compare three to five factors to find one whose offer works for you. Click here to find a transportation factoring company near you.