FROM MYTHS TO MONEY YOUR JOURNEY TO REVENUE WITH CONTRACT RECRUITING
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1 FROM MYTHS TO MONEY YOUR JOURNEY TO REVENUE WITH CONTRACT RECRUITING
2 TABLE OF CONTENTS Your Journey to Revenue with Contract Recruiting TRENDS & IMPACTS OPPORTUNITIES AHEAD 3 6 TOP 10 REASONS TO PLACE TEMPORARY & CONTRACT WORKERS 7 TOP 5 FAQs ABOUT PLACING TEMPORARY & CONTRACT WORKERS 8 CONCLUSION 9 A PARTNER YOU CAN TRUST 10 ALL CONTENTS PEOPLE 2.0, LLC ALL RIGHTS RESERVED 2
3 Trends & Impacts The steady rise of the contingent workforce brings with it many opportunities for the savvy recruiter. If projections from The Wall Street Journal ring true, recruiters will continue to face an increased demand for contract placements: Wall Street Journal February 2, 2017 Never before have American companies tried so hard to employ so few people. Few companies, workplace consultants, or economists expect the outsourcing trend to reverse. Moving non-core jobs out of a company allows it to devote more time and energy to the things it does best. When an outside firm is in charge of labor, it assumes the day-to-day grind [ ] and the company worries only about the final product. The demand for contingent workers continues to increase. According to research published by Staffing Industry Analysts (SIA), the percent of U.S. workforce that is contingent was: 12% 16% 22% in 2009 in 2012 in
4 40% Preference for flexible work environment is driving unprecedented growth of contingent workforce. By 2020, more than 40 percent of the U.S. workforce will be comprised of contingent workers. Intuit Study Temporary staffing holds the major percentage share in the total recruitment and staffing market, and is projected to grow at a faster growth in the future owing to the growing preference for flexible working environment. Global Recruitment and Staffing Market ( ) report Job flexibility is especially popular among the millennial generation (23 to 34 year-olds), currently the largest segment of the global workforce. Over the next several decades, the impact millennials have on when, where, and how we all work will be felt in pretty much every organization and even in public policy measures FlexJobs survey The correlation of flexibility and contingent growth is not limited to millennials. According to American Staffing Association, about one in five of surveyed staffing employees (across generations) cite scheduling flexibility as a key reason for choosing temporary and contract work. 4
5 More and more recruiters are recognizing that revenue opportunities are inevitable if they can appeal to millennials and serve clients with contingent workforce needs. Recruiters and employers alike are realizing that flexibility may be the key ingredient to meeting the competitive demand for talent, while also engaging this influential generation. More and more companies are offering flexible work options, which allows employers to appeal to millennials while potentially reducing turnover and increasing productivity. Furthermore, retaining millennials is good for long-term business. This climate creates exciting opportunities for recruiters when adding contract and temp placements to their traditional direct hire placements. It s actually a win-win-win: Recruiters are better equipped to edge out the competition and increase revenue; plus, the flexibility inherent in temporary and contract placements make the positions attractive to millennials Talent is acquired and satisfied with flexible options (and recruiters improve talent retention) Client companies fill positions with scalability to meet the changing needs of business (and recruiters improve client satisfaction) 5 CONTRACT RECRUITING
6 Opportunities Ahead That certainly makes a compelling case for you to blast any myths that could have you missing out on this revenue stream! If you are now ready to move beyond only traditional direct-hire recruiting and benefit from the lucrative opportunities found in contract recruiting, be sure that you eliminate the fear that stems from persistent myths about contract recruiting. Stop thinking: Contract recruiting isn't my business model I specialize in niche recruitment. Contract staffing is an administrative nightmare. My candidates wouldn t want a contract job. I can earn more money in Direct Hire fees than contract. Contract recruiting is hard! It may be a tough pill to swallow, but continuing to accept those myths as truth is doing nothing but limiting your ability to earn more income less income today and significantly lower business valuations down the road. For your business to thrive in the new marketplace amidst all the changes and impacts, you must overcome any perceived complexities in your mind associated with contingent and contract staffing. CONTRACT RECRUITING 6
7 Top 10 Reasons to Place Temporary & Contract Meet Demand Due to the rise in contract labor needs, client companies are heavily relying on the staffing industry to manage the entire process. Flexibility Contract placements are easier to make because neither party is making a permanent commitment. Agreeing to contract terms can be easier and quicker. Hold Onto Talent There s a shortage of qualified talent keep your good candidates busy! When they re active on temp assignments, they ll be available when a direct hire opportunity arises. New Income Focusing only on direct hire recruitment can cause significant fluctuations in cash flow. Fees from contract placements are predictable, consistent, and stable. Improve Valuation Mergers and acquisitions in the staffing industry are at an all-time high. What s the value of your business if you wanted to sell? Develop a profit center that can be sold by having profitable contract division that s valuable to buyers. Boost Direct Hire Temp or contract assignments lead to direct hire placements. Sometimes a conversion fee after a trial temp period is the most practical way to salvage a lost fee on a direct hire placement. Offer Options Many companies want the try-before-you-buy option. Recruiters should be able to offer tempto-perm placements. Overcome Fee Objections When you get the We don t pay direct hire fees objection, you can move forward as many companies may still have a budget for temp and contract workers. Those earned fees can exceed a direct hire placement fee. Helping in Hiring Freezes Most companies occasionally experience hiring freezes and layoffs. The only job orders available may be for temp or contract positions. Help your clients solve short-term staffing needs until budgets allow for direct hire. Say YES Every Time! Provide your client companies with a complete service solution. When presented with a staffing need (whether temp or contract) you don t have to send your client to the competition. You can say YES! CONTRACT RECRUITING 7
8 Shift your perspective and nurture higher value-add relationships by offering Contract Recruiting as part of your business service strategy. Consistent revenue Your ANNUAL income will look more like MONTHLY income Short-term assignments get extended This leads to consistent long-term revenue Let your business work for you Whether you re at the office or on vacation Competitive advantage If you don t solve your clients problems, someone else will and it s only a matter of time before a client has a contract need Valuable enterprise Adding contract recruiting allows you to scale your business with the value of a database and consistent monthly receivables Top 5 FAQs About Placing Temporary & Contract Workers So the value and appeal is clear. Now you re probably wondering how? Where do I begin? Let your existing clients know you offer contract services. Also you should execute a marketing campaign, as well as maximize exposure on social media. How do I handle payroll, insurances, compliance, and all administrative minutia? Outsource your back office needs to experts so you can focus on revenue-producing activities. You should be dedicating your time to building new business, not handling administrative burdens. 8
9 CONTRACT RECRUITING What about pay rates and bill rates? Check the website for The Bureau of Labor Statistics, which provides occupations and compensation ranges by industry and location. Determine if your client has a max bill rate. Submit candidates within that rate who have a range of skills. Since many contract assignments offer no PTO or benefits, some contract workers may earn slightly more than a direct hire employee in a similar role. What about the Markup? Markups vary between industries and job requirements. Industries with project driven needs include IT and Technology, Engineering, Support Staff, Finance, and Accounting. There are determining factors when it comes to the Markup. Consider if the job requires a unique or hard to find skill set, as well as the length of time required to locate a candidate with specialized skill. What about Conversion Fees? If your client company likes the contractor so much, they may decide to hire them immediately. Be sure to protect recruiter fees by including a clause if they decide to bring the employee on direct. Have the temp-to-perm or contract assignment terms in writing and clarify rates, payment terms, conversion fees, etc. Conversion fees can apply from days of the assignment (typically no fee after 6 months). Base the conversion fee on a prorated percent of your standard placement fee. Conclusion Move from myths to money with Contract Recruiting! Your prospects and clients are facing a variety of complex challenges every day. How can you help them in new and unexpected ways? Can you offer a solution or present a suggestion? 9
10 CONTRACT RECRUITING By understanding their challenges and distinguishing yourself and your business as a partner to overcome those obstacles, you ll be setting yourself up for increased revenue-per-customer, as well as much stickier relationships with added value that is a long-term competitive advantage. Establishing your services in Contract Recruiting will help you exceed client expectations and generate recurring revenue! A Partner You Can Trust Don t be discouraged if you have not done contract placements before. Look to turnkey solutions and partners like People 2.0. We assist thousands of independent recruiters in generating a recurring revenue stream with contract recruiting. Learn more about placing temporary & contract workers: call or visit This material is for informational purposes only and does not constitute advice. No reliance should be placed on the information contained and guidance should be sought from People 2.0. No information contained in this ebook may be reproduced or copied in any format without the express permission of People People 2.0
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