The start of a new year brings about a flurry of activities. Every industry needs to evaluate the year that went by. They also need to identify the challenges in the new year and come up with solutions for the same. The staffing industry is no different.
The recruitment and staffing industry has witnessed a lot of changes in the recent years. The new year will bring about certain new challenges. They will also need to deal with a few old challenges that continues to plague the industry.
But before getting into the challenges, it would be good to understand a few basics. What are staffing firms and what do they do?
Staffing firms either recruit new staff for other companies or provide staffing services such as payroll processing, joining and exit formalities, leave management etc. When a company wants to outsource the hiring process or the processing that needs to be done for temporary staff, they contact a staffing firm.
So how do staffing firms make money?
Do they take money from the employee's pay?
If so, then how much?
When a company hires an employee through a staffing firm or hands over the employee processing to staffing firm, they fix a salary for each employee. Then, the staffing firm charges a commission as a percentage of that salary.
This can vary anywhere between 25 to 100 percentage depending on various factors such demand, employee experience, firm branding etc. This amount will be paid directly by the company to the staffing firm and in no way does this affect the employee's salary.
The changing needs of the job market, the demand for top quality candidates, changing behaviour of the workforce and the changing economic conditions pose a new set of problems for the staffing firms in 2019.
Here is a look at the top 5 challenges.
This problem can be tackled on two fronts.
Firstly, the firm can look at the past attrition rates and try to predict the trends this year. Understanding why the attrition is happening and rectifying it is the solution.
Also, if you are planning on actively chasing new projects, then it is a good idea to check if you have the talent required or if there is a need to hire new talent. You should plan ahead and anticipate any demands that can arise this year.
Sometimes, you just cannot predict a new requirement. In such cases, temp staffing is the best solution, especially if you are not sure if the demand will last long.
After making the temporary hire, even if the requirement does last longer, you can easily convert it into a permanent hire. The processing of these temporary staffs can be outsourced to temp staffing agencies.
Staffing firms either recruit new staff for other companies or provide staffing services such as payroll processing, joining and exit formalities, leave management etc. When a company wants to outsource the hiring process or the processing that needs to be done for temporary staff, they contact a staffing firm.
So how do staffing firms make money?
Do they take money from the employee's pay?
If so, then how much?
When a company hires an employee through a staffing firm or hands over the employee processing to staffing firm, they fix a salary for each employee. Then, the staffing firm charges a commission as a percentage of that salary.
This can vary anywhere between 25 to 100 percentage depending on various factors such demand, employee experience, firm branding etc. This amount will be paid directly by the company to the staffing firm and in no way does this affect the employee's salary.
The changing needs of the job market, the demand for top quality candidates, changing behaviour of the workforce and the changing economic conditions pose a new set of problems for the staffing firms in 2019.
Here is a look at the top 5 challenges.
-> Retaining Millennials
The millennials are now entering the work space. Each generation comes with their own peculiarities and so do millennials. Unlike older generations, this new generation does not take a job without a purpose. Millennials look for job satisfaction and have a desire to contribute towards the betterment of the society. If the job does not meet their expectations, they have no qualms about quitting and looking for another job. And for a talented millennial, finding another job is not difficult at all. So how do you deal with this? It is, therefore, a good idea to hire millennials as temporary staff first. This provides a trial time for both the employees and employers to check for compatibility. During this time, if both parties feel like they are compatible, the temporary employment can be converted into a full-time job offer. But this can involve a lot of extra paperwork and processing and can result in added burden to the company's HR department. Outsourcing the temp staffing services to a firm like PaySquare can solve this issue. They can handle the everything from the joining formalities to the final relieving letter and ease the pressure on the HR department.-> Reactive Hiring
Sometimes a new project comes to your company that demands new skills. Or maybe attrition has created vacancies in an ongoing project that needs to filled as soon as possible to avoid delays. In such situations, making a permanent hire may require extensive talent search and interviews that makes the whole process extremely time-consuming.
This problem can be tackled on two fronts.
Firstly, the firm can look at the past attrition rates and try to predict the trends this year. Understanding why the attrition is happening and rectifying it is the solution.
Also, if you are planning on actively chasing new projects, then it is a good idea to check if you have the talent required or if there is a need to hire new talent. You should plan ahead and anticipate any demands that can arise this year.
Sometimes, you just cannot predict a new requirement. In such cases, temp staffing is the best solution, especially if you are not sure if the demand will last long.
After making the temporary hire, even if the requirement does last longer, you can easily convert it into a permanent hire. The processing of these temporary staffs can be outsourced to temp staffing agencies.
