Do you want to be a Phoenix that rises from the ashes of financial uncertainty with a human capital strategy that blows your competitors out of the water? Well, it requires figuring out how much your hardworking team is actually costing you over and above their salary – and not just estimates. You need real, concrete data you can count on.
A similar situation was faced by Jake, owner of a bicycle manufacturing plant in Calgary. He rang us up at Contrax to discuss the benefits of moving to a full temporary staffing model vs. perm employees and wanted to know more about how we could help him manage his staffing agencies and bring our custom vendor management system (VMS) along and of course, we were happy to fill him in on the details.
“Even though there are enough people out there who do what I need, I was having a crazy difficult time finding and keeping guys to maintain equipment while keeping costs under control,” says Jake. “To keep our perm employees, we kept having to increase their salary every few months so we worked with a couple of local temp agencies in the hope that it would be easier to bring temps on, but we found their rates varied so much that we couldn’t settle on a staffing strategy that we could count on, financially. So, Contrax met with Jake and brought a fresh perspective to the situation.”
With Jake’s story in mind, here are some key elements to consider:
As They Say, Data is Key!
As business owners, it’s your responsibility to look at all areas of expense when it comes to perm employees and if your business is cyclical you need a staffing model that can staff up and down easily. We helped Jake look at the total costs of perm employees factor in not only their salary but payroll taxes, insurance, benefits, sick days, team events, and heck in Jake’s case, consumption of food from the company-paid cafeteria.
Then compare the bill rate of a temp employee, the payroll taxes, vacation pay, etc… are included in their bill rate. To protect yourself from co-employment they shouldn’t be included in any team events and these are the folks who should be bringing a packed lunch or paying out of their pocket for the cafeteria meal. Yes, there is an agency fee associated with temp staff and savvy business owners use this to their advantage and get the best bang for their buck if they have a temp who isn’t performing, the agency does the performance management for them. Staffing up and down is easy when you use a temp model.
Invoice Accuracy
If your strategy is a full, temp model or a traditional hybrid of both, when looking at the temp side, those processes including timesheets, invoices, and payment are easily managed by a master services provider and an easy to use vendor management system. When running a business, it’s important to keep track of everything in one place and as hassle-free as possible.
Figuring out how much your full time and temp employees are really costing you revolves around one key principle: Data collection. By working with a custom MSP suited for your small or mid-sized company, getting the data you need, you and your temp agencies are better-informed and more capable of making the best possible decisions to cost control and meet your staffing goals.
Ready to use an MSP or VMS and want to learn about our custom offerings? Follow us on Twitter or LinkedIn!