Companies of all sizes often need temporary employees for a variety of reasons. But, many of them do not want to spend a significant sum of money or a large amount of time looking for qualified people who also are reliable and hard-working because the positions are temporary in nature. That’s why companies are turning to labor force staffing agencies and on-demand labor force staffing platforms when they need to improve their fill rate and reduce their time-to-fill rate.
But, not all labor force staffing options and solutions are created equal, and sometimes HR and operations managers find themselves waiting days and even weeks to fill their positions. Inefficient operations harm productivity and the company’s overall bottom line, and HR and operations managers are under a lot of pressure to staff jobs quickly to keep operations running as smoothly as possible. We’ve put together this complete guide to labor force staffing to provide an in-depth look at staffing plans and the benefits and challenges of labor force staffing and to assist companies in determining which labor force staffing option is best suited to their needs.
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Types of Staffing Plans
If you find that your organization constantly is understaffed or overstaffed, you should take a look at your existing staffing plan to determine whether it is adequate for your operation. Staffing plans require a great deal of thought
because their purpose is to ensure your company is fully staffed and has the capability of remaining productive even when there is a retirement wave or high levels of staff turnover. Staffing plans are tailored to each company and are dependent upon company size and forecasted growth.
To visualize labor needs, some companies use an organizational chart or some form of visual organizational structure, which can be helpful in visualizing existing and potential future gaps as well as providing a framework for new hires and temp workers to gain an understanding the organizational hierarchy. Some experts say that organizational charts are outdated, instead recommending that companies focus on formalizing day-to-day processes. Whatever method you use, or some combination of the two, you’ll need to get a grasp on the current situation in order to adequately assess labor needs. Once you’ve got a handle on the current context, you can begin to develop a staffing plan.
- Short-Term Staffing Plans: Short-term staffing plans center on a company’s immediate needs and often involve a company utilizing a temporary workforce.
- Long-Term Staffing Plans: Companies looking to be more proactive in determining staffing needs should create long-term staffing plans. Typically, long-term staffing plans are created for at least one year and consider past turnover, employee retirement or leave, expected growth, and other issues that affect staffing numbers.
- Succession Planning: Companies are wise to have succession planning processes in place to have a complete understanding of management staff responsibilities and duties should some management turnover occur. Succession planning makes it possible for companies to train candidates from within the company for different roles or roles with greater responsibility. This can be particularly beneficial, because existing team members are already familiar with the inner-workings of your organization — meaning they’re likely to require less initial training compared to an outside hire. However, succession planning isn’t always the right choice for every role, so it’s best used as part of a strategic staffing plan.
- Strategic Staffing: A combination of short-term, long-term, and succession planning, strategic staffing considers the company’s business plan and then determines staffing levels are adequate to meet company goals. Strategic staffing plans also consider skills, ability, and experience to identify needed training. Strategic staffing also enables you to appropriately determine which roles are suitable for succession planning and when hiring a new employee from outside the company is a better choice.
Once your company has created its staffing plan, your operations and HR managers will be in a better position to make use of a labor force staffing agency or platform to fill gaps within the company. Additionally, many companies try to determine their optimal ratio of permanent workers to temporary workers in order to control costs. In fact, many companies realize that temporary laborers provide a viable solution to complex, changing staffing requirements. Determining the ratio of temporary to permanent workers can (and should) be done as part of your staffing plan. Companies often revisit these plans periodically to ensure a proper mix of temporary and permanent workers and to ensure adequate staffing levels throughout the year.
Labor Force Staffing Options
Generally, there are two options for companies looking to augment their labor force with temporary employees: staffing agencies or on-demand labor platforms. Both agencies and platforms typically screen and train their workers.
- Working with Staffing Agencies: There are some benefits to working with traditional staffing agencies. Established agencies with a recognized brand name, for instance, may appeal to temporary workers who want the benefit of having a trusted brand to represent them. Likewise, large staffing agencies have the benefit of a broad reach, providing more opportunities for workers seeking temporary placement and benefiting employers with more options from a large candidate pool. Some agencies offer on-site representatives, an attractive benefit to both staffers and employers, offering easy access to an agency point of contact. The tradeoff for these benefits is that staffing agencies often have higher costs compared to other staffing options (an average of 40% more than on-demand staffing solutions), and it may take longer to fill positions with some agencies.
- Working with an On-Demand Labor Platform: On-demand labor and workforce staffing platforms often improve productivity, efficiency, and customer satisfaction because they deliver temporary workers who are qualified and can begin working immediately. On-demand labor platforms are more cost effective compared to other staffing options and have a fill rate of 90% as opposed to temporary and contract staffing agencies’ 34% fill rate. And, the average time-to-fill can be as little as four minutes for an on-demand labor platform as compared to the days or weeks of wait time and training time often required when relying on temporary staffing agencies.
Some on-demand labor platforms have access to tens of thousands of talented workers who are pre-screened and reviewed to provide the best temporary laborers possible in minutes. Choose an on-demand solution with HR and legal compliance built in, meaning that you won’t have to deal with the hassle of regulatory compliance. Leading on-demand labor platforms also handle payroll, payment, insurance, and vetting to save companies and their HR managers time.
Of course, these are not the only two ways companies find, recruit, and hire employees. Headhunters (or recruiters) and RPO (recruitment process outsourcing) providers are pretty well-established options for companies who need to fill temporary or permanent positions. Recruiters and RPOs offer benefits such as a healthy database of contacts to draw on, and recruiters are often paid based on results (a qualified, placed candidate), rather than an upfront fee that you’d be on the hook for even if a qualified candidate wasn’t found. RPOs, which emerged from the traditional recruiting agency model, generally take ownership of the complete recruiting and hiring process on behalf of a client organization. But that means you’ll need to give up more control over the process, which some companies aren’t comfortable doing. However, for companies that need to overhaul their recruiting and hiring process or are just beginning to set up a formal process, outsourcing the design and management — and therefore the responsibility for the results — can be an appealing option. RPOs are more often used for developing or improving on the recruitment and hiring process for permanent positions, although some providers will develop temporary staffing processes as well.
Traditional job boards and help-wanted ads were the go-to option for HR managers for many years, but these options are rife with challenges today. Open job posts often result in a flood of resumes and applications, forcing HR managers to spend hours sifting through dozens — even hundreds — of appliants who are not qualified for the position in order to find the best candidates.
It’s like searching for the proverbial needle in a haystack, and no one has time for that. Not to mention, the quality of the talent pool has dwindled substantially via these methods, due in part to an increasing number of non-legitimate job postings for work-at-home scams and other, for lack of a better word, junk. Some companies do have success using these traditional approaches, but there are far more effective ways to attract and hire talented employees today, and job seekers increasingly realize that traditional job boards and help-wanted ads are not the best way to secure a new position.
Some companies implement employee referral programs, which reward existing team members for referring qualified candidates who are hired for permanent roles. These types of programs aim to improve employee retention by recognizing and rewarding existing team members and also attracting top-tier talent who may not be actively seeking a new role through traditional means, such as job boards. Employee referrals are valuable for filling permanent roles, but it’s not the best approach for filling temporary staffing needs. Why? Most referral bonuses are attractive sums, in the hundreds to thousands of dollars. When an existing team member refers a talented professional to fill a leadership or other vital role in the company who ends up spending the next several years providing value, it’s a worthwhile sum to pay out. But offering bonuses for referring temp workers means you’ll be paying out bonuses for workers who are intended to fill temporary needs from the start, so companies don’t get the same long-term value. It’s more cost-effective to offer referral bonuses for higher-value, higher-paid, long-term roles.
Labor Force Staffing Considerations
Temporary workers can help your company cut costs if they are reliable, qualified, and talented. To reap the most benefits from a temporary workforce, you’ll need to partner with or choose a reputable staffing agency or on-demand platform. If your company is considering hiring temporary laborers, there are a few considerations you should keep in mind when enlisting the help of an agency or platform:
- Does the agency have insurance? The staffing agency should have adequate coverage to protect your company and the worker in the event of a temporary worker making a claim.
- Does the agency or platform keep a record of temporary laborers’ progress?
- How does the agency or platform recruit their workers?
- If a temporary worker does not mesh with your company, what does the agency or platform offer to remedy?
- How quickly can the agency or platform provide temporary laborers?
- Does the agency or platform provide reviews or ratings of their temporary laborers? The more transparency, the better.
When fulfilling your labor force staffing needs, you also need to consider your own needs. Again, you should look to your staffing plan for guidance and then determine how many workers you will need, the anticipated duration of their work, and the rate your company will pay them.
Challenges with Labor Force Staffing
Labor force staffing works well insofar as operations and HR managers are involved in the process. Some companies find that staffing agencies do not welcome HR professionals in partnerships, which makes recruiting and hiring a nightmare — and an unnecessary one at that. The result is unqualified temporary laborers arriving to work without having the experience or talent required for their positions. HR managers don’t have time to manage workers who do not have the skills required for the job, and they certainly don’t appreciate having to go back to the drawing board and start from the beginning of the hiring process.
Operations and HR managers also struggle with finding temporary workers who mesh with the culture of their company. In many cases, staffing agencies don’t gather or maintain reviews or ratings on their workers, and companies can be stuck with workers who have had difficulty fitting into labor positions in other situations. Operations and HR managers are much more successful in filling jobs with talented workers when they have access to this type of feedback from prior employers.
Other challenges with temporary labor force staffing include:
- Training requirements – Of course, hiring temporary laborers means that training will be required for them to perform their tasks and meet your company’s needs.
- Morale challenges – While some temporary workers prefer that status over being full-time because of the flexibility it awards them, others may take issue with working alongside permanent employees who get treated differently.
- Safety challenges – Laborious jobs carry some amount of risk and danger with them, and temporary laborers need to have adequate safety training. Yet, studies continue to show that temporary workers have a higher number of and more severe on-the-job injuries than permanent workers. Many companies do not allow temporary laborers to work without supervision until they demonstrate competency and safety while on the job.
- Legal challenges – Businesses must ensure compliance with regulations when hiring temporary laborers. Ensure you are working with a reputable staffing partner.
- Reliability challenges – Some companies report that temporary laborers are less reliable than permanent employees. That’s why it is imperative that operations and HR managers select reputable staffing agencies or a specialized, trustworthy on-demand labor platform to recruit and take care of labor force staffing needs.
Benefits of Labor Force Staffing
Companies turn to labor force staffing agencies and platforms for convenience and flexibility. During busy periods, especially near holidays, HR and operations managers need to ensure their warehouse and customer service staffing levels are adequate to handle the increased workload demands. Temporary staff is the answer to these fluctuating labor demands, and it’s proven an effective strategy for companies across many industries, from e-commerce companies to retail organizations, customer service contact centers, logistics operations, and more.
According to one report, only 15% of U.S. businesses use staffing services, with larger companies using them more than smaller businesses. SMBs (small to medium sized businesses) often think that staffing solutions are disruptive, but the truth is that temporary labor force staffing helps companies remain productive and operate seamlessly during busy periods; inadequate staffing levels cost companies more because understaffed shifts cannot meet demand and companies pay more in overtime to employees than they would to temporary laborers.
SMBs shouldn’t sell themselves short by placing increased demands on their permanent workers, which can mean a sacrifice in customer satisfaction if your existing workforce can’t adequately meet these demands while maintaining the level of quality your customers have come to expect. In other words, failing to plan for seasonal shifts or lacking a plan to accommodate unexpected shifts in demand can have lasting, devastating consequences for SMBs.
The U.S. Bureau of Labor Statistics data does suggest that staffing companies will add jobs at nearly double the rate of estimated overall job growth by 2018, which points to more companies considering the benefits of temporary staffing solutions. Some of the advantages these companies see in using a labor force staffing solution include:
- Ease of finding talent – The best staffing solutions match qualified, pre-screened workers to jobs and save operations and HR managers time and resources when filling positions. The challenges managers have with talent mismatch are solved by platforms that provide on-demand laborers who are experienced and ready to work immediately upon arrival with minimal training.
- Save costs – Labor force staffing solutions provide temporary workers who do not fall under regulations for providing health care and benefits. Using temporary laborers gives companies more options to control overhead costs by enabling them to increase the size of their workforce without the added cost of benefits, taxes, and other expenses that come with hiring a full-time employee.
- Increase flexibility – Companies that make use of labor force staffing solutions can change the make-up of their workforce quickly and easily. Companies can meet the demands of their staffing needs by hiring temporary laborers and using them when needed. With more organizations aiming for lean operations, this flexibility is a must.
As COO and co-founder of Wonolo AJ Brustein explains to Business News Daily: “Companies are trying to be more productive and only have workers when they are absolutely needed. They need to find ways to make sure every dollar they spend is going to help the business. Temp staffing allows them to only have people when they need them, and those people are being productive.”
- Increased time for operations and HR managers – When operations and HR managers can turn to a staffing agency or platform to hire temporary workers, they have more time to focus on their many other responsibilities. On-demand labor platforms enable hiring managers to write a brief job description, set a pay rate, post their openings one time, and wait for workers to accept. Then, they can get back to their other work without spending days or even weeks concerning themselves with fill rates or time-to-fill rates. This increased productivity for your higher-wage employees (operations managers, HR directors, and professionals in similar roles) alone can have a positive impact on your bottom line.
- Better job performance – In some cases, temporary laborers perform better than permanent employees. This may be due to the fact that the temporary laborers want to show their competence in the hopes of their temporary status becoming permanent. Likewise, laborers who are being rated or reviewed on their performance will want to offer their best performance in order to increase their odds of securing future temporary roles with other companies.
- Expand your talent pool – In some cases, companies find that they have exhausted the talent of their existing workforce. If you need specific skill sets that you cannot find in-house, you can hire temporary employees for certain projects that have the required expertise. It doesn’t always make sense to hire a highly skilled professional in a permanent role for a short-term project or temporary need. After the short-term need has passed, companies who hire full-time employees for these roles often end up allocating talented, high-wage-earning individuals to roles and tasks that don’t require the same level of skill and expertise — inflating overhead by paying a salary that exceeds what would typically be demanded for the position. Or, alternatively, companies make the decision to lay off or let go of an employee who offered tremendous value to the company, a choice few organizations want to make. In some circumstances, though, companies might be considering hiring for a permanent role. In these cases, hiring a temporary staffer to fil a short-term need gives you the opportunity to give specific temporary employees a trial run to determine whether they’re a good fit for a permanent position.
In short, some companies hesitate to use a labor force staffing solution because they think the costs outweigh the benefits. However, many companies find that hiring temporary laborers saves money in the long run because they don’t have to handle all the administrative costs. They also save overtime costs when they’re understaffed and need their full-time laborers to work longer hours to keep up with demand. Companies also are not required to pay benefits to temporary workers, so they don’t have to contend with the costs of laying off valued team members and rehiring them as they would with full-time workers.
Labor force staffing is a critical component of a company’s productivity and efficiency. When done properly, labor force staffing saves companies money and ensures customer satisfaction. Companies must devise a carefully considered staffing plan, choose the staffing solutions that best fit their needs, and be prepared to meet the challenges of shifting labor demands in order to reap the benefits.
Additional Labor Force Staffing Resources
For more information and further reading on labor force staffing, the current hiring climate, building a temporary workforce, and more, check out the following resources.