More Effective Hiring Practices Can Save You Money
The great majority of businesses have a standard process for outsourcing specific business functions. Whether they require marketing services, website development, construction work, or a staffing firm to provide temporary people, they issue an RFP and wait for bids to come in. After analyzing the different possibilities, they often select the one that best satisfies their demands while being the least expensive.
Even while it may be good for recruiting construction businesses or landscape contractors, is that process the best approach to hire people? The top three costs for any business, including those engaged in transportation and storage, are labor costs. So it makes sense for companies to think about cost-cutting measures. The problem, however, is that businesses simply take into account price rather than complete cost.
Traditionally, the hiring process has gone as follows: an RFP is issued, a staffing agency is selected based on pricing, and then the hiring is completed. Is it, however, the best course of action?
If you knew your expenses will increase significantly in the future but didn't start saving money right immediately, would you still do it?
Reevaluating your company's hiring process takes time.
In the long run, might you use less if your personnel were better? When asked if they could lower their staff by 10% or even 30% if there were more qualified individuals, the majority of organizations promptly respond "yes." For the company, a 30% reduction in labor costs would result in significant financial gains. The only thing required is to hire exceptional individuals.
What causes that?
This suggests that the operations department and procurement must cooperate. Managers and executives who frequently deal with these contract workers are involved. What specifically do they lack? What characteristics and abilities are required to carry out the task efficiently and successfully?
If operations are not included in the purchasing process, the markup paid by the employment agency must be taken into account. That markup won't be much of a help, though, if the business has a 20% staffing problem.
The Solution
The solution is to reverse the process. Instead of soliciting bids, selecting the five lowest bidders, and hoping they can deliver, alter your way of thinking. Choose the top five staffing agencies you think will best serve your business' needs, and then work out a deal with them at a price that works for both of you.
Yes, it is a distinct way of thinking. But we're sure that this is a long-term strategy that will save spending overall and stop companies from overstaffing the warehouse to cut labor costs.
If you need assistance with your staffing issues, get in touch with us!