Setting Up Your Staffing Business: Is Now a Good Time to Start Placing Contractors?

Is now a good time to start placing contract workers? Here at PGC, we always think it's beneficial to place contractors. However, most staffing businesses start out by making permanent placements as it is usually easier to get your staffing business up and running due to limited overheads and the higher up-front fees which can be generated. 

Prior to the COVID-19 pandemic, the staffing industry experienced a candidate driven market, in which there was a surplus of jobs with a limited supply of candidates which in turn accelerated offers.

However, times are changing and due to skyrocketing levels of U.S. unemployment due to the pandemic, companies are hesitant to onboard permanent workers and instead considering engaging temporary/contract workers. 

So, why is now a good time to start placing contractors?  

Flexibility

In times of economic uncertainty, many employers often think twice about increasing headcount and instead consider engaging temporary/contract workers thanks to the flexibility this solution provides when businesses do not want to commit to long-term contracts in times of uncertainty.

Our recommendation for staffing firms during periods of economic volatility is to be flexible and to adapt to the changing environment around you. If your clients are seeking a flexible resource, then be the one to provide this. 

Every day, recruiters are discovering just how profitable and easy contract staffing can be for their business, there has never been a better time to try out contract staffing for your business!

Steady cash flow 

Are you tired of the highs and lows in cash flow when engaging direct placements? If your answer is yes, it may be the right time to start placing contract workers. Contracting provides a steady cash flow, enabling you to generate your margin for every hour the contractor works. In addition, invoices are paid approximately every two weeks, meaning you'll experience a steady cash flow.

If you wish to tap into this new and steady cash flow,  you don't have to worry about building a whole new client base. It is worth checking if your client base is moving towards this new direction and if so, you should consider pitching your offering to them.

Build better relationships

Placing contractors allows you to be in constant contact with your client and as a result, it presents an opportunity to build stronger long-term relationships. If you deliver clients permanent and contract placements you may become their go-to provider. So, don’t wait around grab this opportunity when you can, and consider placing contract workers to strengthen client relationships.  

Shield your business from uncertainty

Overall, there has never been a better time than present to consider hiring temporary workers to shield your business from post-COVID-19 uncertainty. If you are one of the various staffing providers considering temporary workers at this time it is important to take into consideration how you will manage them.

It may feel overwhelming when you want to start placing contractors; How do you engage with contractors? How do you make sure they're paid properly? What do we do about benefits? What about overtime?

We highly recommend utilising an outsourced partner to manage the employment of your W-2 contractors and all the associated admin heavy tasks (payroll, benefits, insurances, timesheets, and the compliance across federal, state and local levels) to allow you to focus your efforts on growing your business.  

Here at PGC, we provide these services to hundreds of ambitious and high-growth staffing agencies. If you are considering contract staffing, check out our free guide for staffing agencies.

You can also get in touch if you would like to find out more information on how you can get your contract staffing business up and running today! 

Disclaimer: All information written here is for general informational purposes only and is not intended to be a substitute for professional and/or legal services.