Nobody knows what your talent needs are better than you. So, if you’re still using a staffing agency, you probably aren’t using the best possible talent for your business. It has become an industry norm for companies to utilize staffing agencies and for staffing agencies to charge you a hefty premium for their services.
If you’re relying on an agency to deliver you top talent, you could spend time writing a job description, sit in on several conference calls and describe the best possible candidate for the positions you are filling, and still not end up with a good candidate for your business goals. The hiring process takes time and money – lots and lots of money. It does not matter how detailed and specific you are with the agency, they will NEVER truly understand the culture and needs of your company as well as you do.
Sure, there may appear to be benefits of using a temp agency or staffing agency to hire what you hope will be the perfect candidate, but these benefits do not come without a high premium on top of wages (in many cases this can be as high as 100%). To put this into context let’s outline an example of this overspending.
Let’s Visualize a Real-Life Staffing Scenario
Close your eyes and picture landing a new retailer where you will sell your products. The retailer is national, has a huge presence in your industry, and requires you to staff their stores with your employees in all the top stores within their top markets. First of all, congrats……awesome job! But now the work begins. You’re going to need to start staffing those stores.
Let’s take a look at the premium you will pay using a temp/staffing agency to staff these stores. In this scenario, your company has the following:
- 25 markets
- 150 locations
- 3 part-time employees per location = 450 part-time employees
- The base pay of your employees is $25.00 per hour
- They work 20 hours per week, 50 weeks per year
Annual spend just on hourly talent: $11,250,000.00
Temp/staffing agency fee*: $7,200,000.00
*64% markup based on SIA data
Total spend: $18,450,000.00
The above example includes all fees of the agency, as well as the mandated tax benefits, averaged out for Federal, State, and Local Governance.
What about management?
Keep in mind that this is just the hourly wage for the in-store talent. Because the opportunity in our example is widespread in 25 markets and 150 locations you will most likely need to layer on regional and district managers to best manage the day-to-day operations such as onboarding, training, scheduling, budgets, time and attendance, payroll, reporting, etc.
Based on the above model, your infrastructure will need additional support. You will need to add the following:
- 25 District Managers at $35/hour
- 2 Regional Managers at $45/hour
- Each of these positions is working a 40-hour work week
District Managers Total Cost: $1,750,000.00
Regional Managers Total Cost: $180,000.00
Total Management Spend: $1,930,000.00
Total Agency Fee: $1,235,200.00
Grand total breakdown:
Total Talent Spend: $13,180,000.00
Total Agency Fees: $8,435,200.000
Total Spend: $21,615,200.000
While this model is based on a national rollout, we can slice and dice this any way that fits your current and future needs. According to SIA data, you can expect to pay a 64% mark up on the hourly labor rates when using a staffing agency.
For me, these numbers are extremely painful to swallow. The additional number of units that must be sold to cover the agency costs can be staggering depending on unit cost and margins.
How you can save on staffing with AllWork
By now you’re probably asking yourself “is there another way? A better way?”
The simple answer is yes. AllWork’s enterprise platform helps companies manage their hourly workforce more efficiently. It will increase your sales, reduce labor costs, and increase your engagement with your field force and your customers. Before AllWork, big and small brands had no technology to manage critical parts of their business. Now both brands and retailers can cut the cord with costly temp/staffing agency fees and put those dollars directly to the bottom line.
AllWork will transform the way you manage your in-field talent, whether you need to hire an entire team or already have an existing team. Perhaps you are a retailer with hundreds of locations and want a better way to manage your part-time employees. Not only will it streamline critical retail operations functions, but it will also save you a significant amount of money.
Using the same example as we used above, let’s compare the agency spend vs. the AllWork spend:
Agency Spend: $8,435,200.000 above wages
AllWork Spend: $3,438,100 above wages
With AllWork, you would save your business $5,000,000. That’s money that can be put back into your bottom line and allocated elsewhere. That could be the difference between having a successful national rollout and blowing your budget.