One of the biggest mistakes that we see our clients make when it comes to getting the most of their staffing dollar is underinvesting in the results they need. They pay less than they need to pay to acquire the employees with the skills and talents they need, and in the long run, end up paying more! But they don’t make this mistake because that is their intention.
When our clients make the mistake of paying too low for the results they need, it normally starts like this. They start by looking at their own wage and thinking, “If we pay a full time employee $15 hourly for this position, we’ll pay the staffing firm $15 hourly for this position. If we decide to hire the person, we’ll give them a big raise when we bring them on.”
The real problem is that if it takes $15 to attract and acquire a person with the skills you need, paying less than that doesn’t get you the candidate you really need. It gets you less. If you pay $10, you get a candidate that commands $10.
More still, we don’t think you should think of your cost savings from utilizing temporary staffing from paying the lower wage. In reality, a fully-loaded employee with benefits costs more than the temporary employee and their markup, and the benefit in cost savings is found in using a flexible workforce approach, like lower overhead costs, and faster recruiting times.
Our advice to our clients is to pay what you need to pay to get the results that you really need. Paying less than you need and saving a little money often costs more in lost production, manager’s time, poor results, absences, turnover, and other difficult to capture soft costs. But even those these soft costs are harder to capture, they are every bit as real as the hard costs you pay in wages.
To get the most for your temporary staffing dollar, pay what you need to pay. This doesn’t mean pay more than you need to pay, but it does mean you should pay for the results you need.