Labor costs, in general, account for a great deal of an organization's operating budget, from paid advertising for available job listings to salary and benefits. Utilizing contingent labor by hiring temporary employees for specific coverage or projects can save money compared to having full-time workers, but it can still can get pricey, with training costs and reduced productivity if bad hires are made. Check out six ways to control your contingent labor costs:
To stretch your contingent labor budget while still keeping up productivity, prioritize time periods for when coverage is most crucial. This may include reserving your budget for certain times of the year when demand is known to skyrocket, while finding solutions for instances like vacation or sick coverage for employees.
The longer it takes to fill a temporary position, the higher the cost, from advertising to reduced productivity. Streamline the hiring process so you can make quicker decisions and prevent losing out on candidates – know what you're looking for, craft informative job listings, and be ready to evaluate candidates and make decisions in a timely manner.
Bad hires tend to be among the biggest contributing factors to high contingent labor costs. Reduce this by screening candidates thoroughly before extending an offer, even for short-term work, and ensuring they have an understanding of what the job entails and demonstrating they are committed to working hard. Don't ignore red flags because it's "only temp work."
Avoid wasting money on hiring contingent employees that don't actually help contribute to your workplace's productivity by onboarding new workers as effectively as possible. Be prepared for training them to acclimate quickly – have key points in mind to share, written resources for them to refer to, and bring your current employees up to speed on your expectations of them working with the new contingent hires.
Limit the amount you need to spend on contingent labor by cross-training your current staff. Even if one particular employee is responsible for certain tasks, ensure that other workers have enough training to fill in temporarily if needed. Train your employees to perform other tasks as backup and prepare reference materials to help when employees are out of commission.
The better the relationship you have with your temp agency, the more you can reduce your contingent labor costs. They'll be able to better anticipate your needs and provide you the candidates that are the most likely to be successful for you. Offer your agency honest feedback, discuss your staffing needs in-depth, and respond if they reach out to touch base (even if you're not in need of workers at the moment).
To effectively control contingent labor costs, work with a staffing agency you can trust. QPS Employment Group is no ordinary “temp agency” – throughout our more than 30 years of experience, we have developed a hiring process to ensure client satisfaction. We offer temporary, temp-to-hire, direct hire and executive placements, and rigorously screen and evaluate candidates. Contact us today to learn more.