Staffing software is widely used in staffing agencies to better facilitate and track the interviewing and hiring of candidates for open job orders as well as produce payroll for it’s employees. It is also used to control and quality assure that job orders are filled accurately and on-time. Ultimately this information will feed over to the back office payroll software for billing purposes so that your agency can bill the client and your agency can be paid in a reasonable amount of time. And since cash flow decides whether a business will live or die, it is reasonable to assume that anything that makes this process easier, faster and more accurate will be advantageous for your staffing company’s bottom line. So therefore, to answer the question of whether or not your agency needs staffing software succinctly, I would simply say without a doubt, yes.
So, why does your agency need good staffing software anyway? Good software is truly invaluable to most staffing agency owners and managers for many reasons not the least of which include the ability to track and submit applicants to specific jobs (sometimes called an applicant tracking system and is handy if you fill for more than one job order) and also to completely automate the process of payroll and employee tax and wage information. This information is so vital to have organized as many agencies have gone bankrupt trying to either track their jobs by hand or on an Excel spreadsheet. Additionally, some agencies may be using outdated software that doesn’t exactly fit their business model or flow of their business operations. Either of these mentioned scenarios are certainly not optimal for productivity or the bottom line and they present many issues for the staffing agency manager.
One of the most powerful aspects of staffing software falls on the front office software. Without a job order from a client you don’t have any reasonable expectation of generating revenue so it is common for agencies to have many many orders open at one time further complicated by the many customers that have to be managed. In order to be competitive, it is extremely important to be able to access information about your jobs quickly. It might just be the lifeblood of your staffing business. Furthermore, it is likely that your customer has put the job order out to several agencies to fill so it is very important that the staffing agency is able to quickly submit and track applicants that have been sent to jobs. Even if your agency is the exclusive provider for a client it is still no guarantee that your company is going to be able to fill the order properly or on time. Good front office software for staffing companies makes this challenge a little easier by keeping track of jobs orders, clients and finally the applicants and candidates. It’s nearly impossible to dream of handling multiple jobs on a spreadsheet and it’s a lesson in frustration to enter the information over and over again in an outdated database.
When it comes time to pay employees, there is nearly nothing as important as getting the deductions right and ensuring that government payroll taxes are paid on time everytime to avoid the steep penalties that a lot of agencies pay because they can’t file their payroll information on time. Good staffing software is going to provide a simple and effective way for you to track all of the various types of employees that most staffing agencies employ. Be sure to look for editions of software that are specific to your industry. For example, The Fackler Group Staffing Software offers editions for front office staffing software for weekly pay staffing agencies, another for daily pay staffing software, another for medical staffing software and yet another specifically designed for PEO software or employee leasing software. Staffing software really should be specific to your business because in the end, the software will be the basis of your company’s profitability and operations and therefore should be as close to your specific business model as possible.
About the author:
Since 1998, Mark Cross has been involved in technical staffing and marketing to the SMB market space. He is currently the marketing manager and technical adviser for TheFacklerGroup.com where he helps develop and market the world’s best staffing software platform. Mark is a certified technical professional in the areas of computer and communications consulting as well as media and branding video production. Joe welcomes your questions to: firstname.lastname@example.org.
Every staffing company knows to identify mandated employer benefits when calculating the markup for clients. Payroll deductions such as OASDI (FICA), Medicare, FUTA and SUTA rates are usually known at the time the staffing agreement with the client is made and are rarely reviewed again in the context of client rates. Unless you have the kind of markup arrangement like many professional employer organizations (PEOs), where actual assessments are monitored with each billing, some precautionary messaging can really pay off in these uncertain economic times. Most states unemployment funds are being depleted at record rates due to the 2007-2008 jobs collapse. Most US states will eventually catch up with their counterparts who have already raised the earnings threshold and their rates. The UpJohn Institute has an excellent white paper on the subject located here: http://www.upjohninstitute.org/publications/titles/fcsui.html
Build in a self-imposed modification to your most recent markup rate and focus on keeping your temps on your staffing payroll so they reach the maximum as early in the year as possible. Every temp who reaches their max and continues working drops a couple of percentage points to your bottom line. If you replace them with a fresh temp, you go back to square one. Having properly designed front and back office staffing software is critical. Check particularly your back office software. Are there timely Sales Analysis Reports and Payroll and Billing Management Reports which accurately track your staffing agency margins down to each hour worked? If not, your margins may not be as high as you think they are.
Of course the 800 pound gorilla in every staffing agency’s waiting room is workers comp. Here again a pre-emptive add-on to your most recent comp rates can store some nuts up for the winter (or the workers comp audit). If you get hit with a big rate adjustment, don’t be bashful about sitting down with your client, showing them the facts and asking for rate relief. If the client won’t budge, he at least knows you are honoring your rate commitment and making a sacrifice to keep his business.
Finally, if you have to make mark up concessions, make them out of what your client sees as your net profit margin while giving yourself some breathing room on your mandated benefits.
Insofar as business networking sites go, there are a whole host of offerings available via the web. But how many do the temporary placement agencies and staffing sales professionals really use? As a staffing software professional myself, I have personally seen benefit from the use of the following list of sites. It’s short, but then most good things are.
- LinkedIn| I have been a member of LinkedIn since the beginning. LinkedIn is a great site for staying in touch with business and personal connections. It provides a host of features to keep you in touch with your business colleagues by updating you on their job statuses and the site can be used to make sure you don’t ever lose touch with your colleagues when you change jobs or move. Most every sales professional uses LinkedIn including most staffing sales and executives.Additionally, if you seek to hire (or even be hired) then the LinkedIn.com site can help you find people who have recommendations from peers and previous employers. Typically, the recommendations appear right on the candidate’s profile online.Yet another use of LinkedIn is to utilize your industry peer group (or perhaps another industry group) to build reliable and industry-expert driven data about any topic you choose. If you need to know how to sell more widgets to government markets, there is an open line of communication right to the widget makers and the clients to ask any type of questions you may need answers to. Typically, the staffing industry pros are very professional and helpful on LinkedIn. For a greater degree of specialty try a specific group on LinkedIn.
- FaceBook | I know it’s almost cliche’ at this point to have a FaceBook account, but let’s face it, if it ain’t broke, don’t fix it. For most businesses, this is a way to join in free mass marketing. You can create a FaceBook page for no cost for your business and network with millions of other staffing agency professionals doing the same thing. It’s simple to setup a site and you can even add fans and friends to your site so you can keep them updated with any news about your job openings or candidates for hire.
- Twitter | I detest Twitter. There is no better or more succinct way to put it I’m afraid. It is the bane of my existence and our shame as Americans for having created such a thing. But, be that as it may, it is in wide spread use and just as we must endure Toyota cars that suddenly accelerate, we too must endure this American phenomenon. So, use it to your advantage, because if your competitor doesn’t use it currently, he will. More free mass marketing for your staffing agency. Tweet your job openings or tweet about a new candidate, or tweet about your new sales person. You get the idea. Just tweet!
So, this is a good short list for you to start your staffing agency out with. You can get your sales pros to open accounts and tweet their way to stellar sales. I think my work here is done.
Here’s the deal….
The Hiring Incentives to Restore Employment (HIRE) Act was signed into law by President Obama on March 18, 2010. This Act has two main provisions that can benefit staffing agencies – an exemption from social security taxes for certain newly hired employees and a tax credit for retaining these employees for 52 consecutive weeks.
Social Security Tax Exemption
The Social Security tax exemption applies to employees hired after February 3, 2010 who were previously unemployed for at least 60 days prior to being hired, or who worked less than a total of 40 hours in the 60-day period prior to beginning work for the new employer. Employers will save the 6.2% employer social security tax, up to the wage base limit, on wages paid to these employees after March 18, 2010, and before January 1, 2011. If your typical gross margin is 20% on an employee it jumps to 26.2% (roughly a 30% increase).
Eligible employees will be required to certify by “signed affidavit” under penalties of perjury that they have not been employed for more than 40 hours during the 60-day period prior their hire date. Employers are required to retain these statements for a currently undefined period of time. A well designed front office software application can help you identify those candidates.
This legislation is a big deal. It puts money into a business’ cash flow immediately, since the tax is simply not collected in the first place. There is no minimum weekly number of hours that the new employee must work for the employer to be eligible, and there is no maximum on the dollar amount of payroll taxes per employer that may be forgiven. Finally, the incentive is not biased towards either low-wage or high-wage workers. Under the measure, a business saves 6.2% on both a $20,000 worker and a $90,000 worker.(http://www.hbs.edu/global)
Employers that retain these eligible employees for 52 consecutive weeks after they are hired may be eligible to claim an additional tax credit up to $1,000 for each retained employee on their income tax return. Again, the right kind of back office staffing software can track that eligibility and highlight employees who need to be assigned to keep their ‘streak’ intact.
In the simplest of terms, factoring is borrowing money from an individual or company to cover contingent staff payroll. It is useful for many smaller staffing organizations because it affords them the ability to “float” their payroll expenses on someone else’s dime temporarily. This is a great solution if you don’t have the cash to cover the payroll right away or like most agencies, have billed invoices to your client but won’t be receiving the money for 30-45 days after they receive the invoice. This is a common scenario for many temporary placement agencies.
Many agencies utilize factors to finance their payroll because they are just getting their businesses started and don’t have a lot of extra cash to cover ever-expanding payroll for new contractors. However, be aware of the sometimes high costs of using factors for payroll financing.
Staffing agencies borrowing $200k a month to cover their payroll expenses might pay a 3-10% premium or more to a factor for the privilege of using their money. And once an agency starts using a factor to cover their payroll, it could prove difficult for the company to stop using the service because of the premium paid to the factor for the use of the money.
If you’re looking for more information about how factors work, this is a good basic information blog by a completely non-affiliated factoring company: http://www.factoritin-blog.com/factoring-101/.
It is easy for temporary staffing agencies to fall into a mindset of churning temporary employees thru a succession of temporary jobs. Certainly there are some workers who prefer the independence of ‘full-time temporary’ jobs, and some workers who simply have not developed their skill set to the point they are viable candidates for full time employment but most of the applicants in your files really want a full time job with a long term future and – particularly with a little help from you – productive careers.
In economic down times and boom times, temporary staffing agencies can be the gate keeper to full-time employment. If you market your agency in this way it can be a powerful lure to attract higher quality temps. Several successful temp agencies have even combined temporary placement with a mentoring service to help their employees get back up to speed with business practices and technology. A 1- or 2-hour session, one evening a week on interviewing, resumes, social networking etc. can go a long way to locking temps into your agency, elevating their skill level so they are more valuable to you and your clients and providing a real value-added service in your community. Such a program has enormous perceived value when trying to attract applicants and separates you from the herd of other temporary staffing companies. Properly designed front office staffing software can help you track each employee’s progress along this path.
As the economy slowly crawls out of its doldrums, most observers agree that there will be an uptick in the temporary placement arena. In spite of numerous economic setbacks, the Bureau of Labor Statistics projects the 2010 – 2020 job growth to be significantly stronger than the 2000-2010 period. (source: http://www.bls.gov/news.release/ecopro.nr0.htm) Having been forced to cut back full-time employees, many companies still have to staff up for certain projects that require more manpower or simply when a full-time employee’s job needs to be covered for a vacation, illness or other absence. Eventually many of these temporary assignments will grow into permanent positions. When that happens, far too many staffing companies lose the temp assignment and never get a seat at the table when the permanent hiring decision is made.
Start now to educate your customers and those on file within your agency that are more than a routine temp staffer. You offer a clear pathway to permanent employment for your employees. Fill your job orders with ‘keepers’ and you will secure long-term bonds with your clients.
Upgrade your thinking in this critical area and you will upgrade your staffing agency’s bottom line.
Vendor Management Systems are sometimes called Vendor Neutral Systems because they are perceived to provide a level playing field among the many staffing agency vendors. Vendor Management Systems is (typically) web-based staffing software that handles submittals of candidates by recruiters and staffing agencies for jobs that are posted by a hiring company. The design of VMS lends itself to achieving a lower bottom-line cost for the hiring company that deals with a large number of contingent staffing providers and has a large and ongoing number of contingent staff to hire because it seemingly fixes the costs of doing business with staffing companies by locking in lower and predictable markup expenses.
VMS systems have been around since the early 1990s and have roots to Ford Motor Company. The promise of VMS is that it will deliver to the hiring company a better cheaper way of doing business with multiple staffing providers because it takes the guess work out of costs by requiring recruiters to submit all candidates for any position through the software. The software compiles the list of candidates submitted by the recruiters and staffing agencies and streamlines the list of potential candidates and costs for the hiring company.
Some opponents of VMS allege that the process leaves a lot of the staffing agencies that participate in the submittal process at a loss because it prevents them from making lasting relationships with the hiring companies in which they can form profitable and exclusive relationships. In turn, VMS opponents say this leaves the hiring company with no real allies when it comes to having a go-to partner for finding labor because they are stuck in a neutral type of system requiring many hurdles to jump through if your hiring manager has unique needs.
The costs of VMS vary, but are typically in line with other type of on-site hiring partnerships like MSP’s or Managed Service Providers. In contrast to VMS, MSP’s are typically one or two vendors that sit onsite at the hiring company’s location and conduct most or all of the process of employment for the hiring company. VMS could be deployed in this environment too, however one might question how neutral the system could be if you employ a specific agency to conduct the hiring program for which they were also submitting candidates for hire through as well.
Some of the best staffing and job boards can be found with the simple click of a mouse and a search engine like Google. And while there are a lot of employment services out there on the web, some of the best use good employment software to make their user’s experience a better one. Here are five of the best that we have personally used and tested with good results for job seekers and employment and staffing agencies alike.
Should staffing salespeople use CRM software to manage clients? Most employers and business people think so. But of course there are trade-offs. It’s important that the software doesn’t slow the salesperson down; especially during their most productive peak selling times and it’s especially important that the software is adaptable to diverse selling styles because sales people will only utilize software that has value for them personally (i.e. more sales and less time with data entry.)
For small staffing agencies, the right staffing agency software can make a huge difference to the bottom line, because if the salesperson is using good software, you as a business manager will certainly reap the rewards of good business intelligence and solid sales and financial data.
As an example, while I was employed in the telecommunications industry as a salesperson I spent the majority of my time cold-calling businesses on the telephone. It was imperative that my number of dials be maximized to ensure that the number of contacts with live prospects was maximized because my average sale depended on me making 75 calls to get to that magic “yes”. I know this because I tracked the calls in special cold calling software that would then transfer the prospect into a CRM system once they became a customer or serious buyer. I wasn’t hindered by all of the typical CRM software data entry that most salespeople absolutely hate. As a result my sales increased over 25% within just a few months as did most of the other salespeople in the office who actively used the software.
Had the company required me to use CRM software instead of special software designed for cold-calling, I wouldn’t have been nearly as productive or happy. CRM is designed to maintain relationships; it’s not designed to be a cold calling software for your salespeople. It just takes too much time to enter the information for every prospect (or more likely suspect).
CRM is great at developing relationships. It helps keep track of everything from meetings and lunches to important deadlines and client’s children’s names. It enables sales people to be better relationship managers, but let’s not forget that software should be designed to work the way the salesperson works which means flexibility.
“In my opinion, software should either adapt to the company and salesperson’s best practices or the company should find new software.” – Staffing Executive, Fortune 1000 company
Some of the more popular CRM packages for business are ACT and Goldmine. And while these software products won’t run your staffing business, when implemented and used correctly they will provide a focused view into what is going on in your sales pipeline and more business intelligence than you’ve probably had access to previously.
In previous articles on this blog we talked about the opportunities for temporary staffing companies to expand their roles from mere matchmakers between temporary employment opportunities and temporary employees to become real mentors and advisors to those who register with their agency.
One of the most obvious areas where you can make that happen with minimal effort is in sharing your experience with bad resumes with your employees. Those of us who look at resumes everyday have long since abandoned any hope of relying on them much beyond the initial, cattle-call stage. There is so much that is incorrect, misleading, irrelevant and downright hokey in most resumes that they should come with a warning to the reader to elevate their feet well off the floor before beginning. In the temporary staffing industry particularly, the resume – at best – will end up as a link from your front office staffing software, but it will generally not drive the final decision of whether or not to make the resume writer a job offer.
There is no substitute for a well-designed, easy to use applicant database and tracking system. However since resumes are part of the landscape and will continue to be a part of the information base, you can at least counsel your applicants on the biggest no-no’s in resume writing. And here they are…
The ‘Top Ten Resume No-No’s in the History of the Universe’: ( This is 100% non-scientific and the product of absolutely no real research other than our own experience here at The Fackler Group.)
- Lying –Or in these politically correct times, including information that is not entirely factual.
- ‘Spelin’ and ‘grammir’ mistakes.
- Unexplained gaps in work history (usually tied in closely with number 1 above.)
- Outdated information – The fact that you were a whiz on the telex machine just doesn’t help.
- Opening objectives –These very often sound like some of the Q and A at the Miss America Pageant. The fact is you are probably not going to be a real player in the quest for world peace. Instead just state the obvious….you’re looking for a good position with a viable company and your experience and attitude will separate you from the herd if the kind reader will just hang in with you a little longer.
- Too Much Detail– Nobody wants to read how your previous employer made their sausage. Just say you made sausage.
- Too Long– I read some resume expert the other day who said more than five pages is too much. Five pages!!! Are you kidding? Two…maybe three, tops.
- Personal Attributes– The reader is seeking to hire a productive employee who will contribute to the enterprise’s reason for being: profits. They are probably not trolling resumes to find new soulmates.
- Interests, Hobbies– Really? It is very doubtful that the reader will be interested.
- Excessive bragging– Unless you really did advance the quest for world peace, don’t say you did.
Remember, particularly in the fast paced staffing industry, you need to get the applicant profile distilled down to quantifiable data that can be housed in a database and searched and manipulated as near to instantaneously as possible. That’s what good front office staffing software is for. Resume’s are a side salad to that entrée. We have long understood that principle in the temp staffing business. We think it applies to resume writing for broader distribution as well.
Of course there are tons of more scholarly articles on resume writing all over the net. We often refer prospective resume-writers to jobstar.org/tools/resume for good information on the subject.