By 2010, 70 per cent of the North American workforce will be working on a contract basis, says one Canadian staffing supplier on its Web site.
Should that prediction actually come to pass — you may recall forecasts of the paperless office, 30-hour work weeks and the telecommuting workforce — Canada’s staffing firms want you to know that they’re ready and able to supply those contingent workers.
They are confident that they have the best answer to many, if not most, of an organization’s staffing needs and a business case that is superior in many instances to that for in-house staffing.
Canadian HR Reporter asked a number of these firms to describe their business cases for CHRR readers: why should HR decision-makers, particularly those with recruiting and staffing responsibilities, regard outsourcing as a viable alternative to in-house staffing?
Ten staffing firms (see separate list) responded to our query. Here are some of the components in their business case:
Workers can be hired “just in time” and only for the period of time needed to complete a project.
This is probably the most pervasive and transparent case for temporary staffing. Employing workers only as needed makes interim or project-based staffing cost effective. Most organizations recognize that labour intensity affects cash flow, says Helen Jowett, president of McDonald Green Personnel Inc.
“Hiring talent as needed is one of the fastest growing strategies of this decade.” Staff levels can also be adjusted to seasons or business cycles. Also, costs can be flexible rather than fixed.
All costs are rolled into a single hourly rate.
Depending on the province and the company, says Michelle Wales of Aquent, companies can incur costs of 13 to 20 per cent of total payroll.
And, she adds, there is protection from “devastating” payroll audits or Workers Compensation issues. All payroll deductions are handled by the service provider, who also covers workers compensation and vacation pay.
Co-employment issues with contract workers are avoided. Even though companies that decide to directly employ contract workers may take steps to protect themselves in this regard, says Steve Cook, vice-president, information technology services, for TES – The Employment Solution. They risk liability if a contract worker leaves their employ and claims to have been working in a permanent position.
“Flags will go up and, in all likelihood, high costs and aggravation will follow. There are many examples of this happening, and one of the deciding factors in many cases has been who provides the contract worker with his or her paycheque.”
The best — and most suitable — talent available will be put on the job.
Cook says that sometimes a company’s needs exceed its core competencies. “Rather than reinventing the wheel,” the vendor will provide the company with the best available talent. This, says Cook, may be “the most important strategic advantage” to organizations utilizing workers provided by staff augmentation firms.
As well, temporary workers often bring to the job diverse experience, skills and the flexibility to work in different environments, “which may not be the case with full-time employees,” contends Geoff Bagg of The Keith Bagg Group.
“Our experience has been that temporary employees can be so critical to a company’s success that often they are not discernible from the company’s full-time employees,” says Bagg.
Niche agencies have a good sense of who is suitable — and available for specific assignments, says John Chrobak, president of Pro Tec Global Staffing, which specializes in engineering, IT and manufacturing assignments. “Our staffing services are well suited for clients that require an individual or a team with specific skills and experience for a medium- or large-size project.”
Lawrence Teltscher, CEO of PTC Financial Staffing Inc., another niche agency, says his company is quick to fill accounting and finance positions “with very high-quality candidates that meet and exceed our client’s requirements. We have these candidates because of our program of continuous comprehensive recruitment and (because) we are very well known in the marketplace.”
Outside staffers can be used as recruiting source, preventing the employer from being saddled with a bad hire.
The temp-to-perm option is “much favoured by our clients,” says Wales. It allows managers to audition potential employees and avoid potentially “costly and demoralizing hiring errors.” This process also saves on recruitment costs and, in the case of bad hires, termination costs as well.
Training costs are assumed by others.
Training costs are virtually eliminated, says Ted Turner of Hunt Personnel. “Skilled people arrive, ready to be productive.” This allows the employer to invest in more training for the more stable core permanent staff.
Project management can be included in outsource costs.
Suzanne McInerney, Armor Personnel, says her company’s most critical business advantage is its on-site management of contingency flexible staff, calling it “the most efficient, cost-effective way for clients to staff their work sites and still concentrate on company business.”
Saves wear and tear on internal employees.
“Sustained overtime for full-time employees diminishes productivity, morale, accuracy and stress,” warns Bagg. Bringing in a team of specially trained and focused temporary workers can “alleviate or at least diminish these issues.”
Head office: Toronto
Provinces served: AB, ON, PQ
Focus: Legal staffing
Canadian head office: Toronto
Provinces served: BC, ON, PQ
Focus: Creative, Web and technical staffing
Michelle Wales, director,
Head office: Mississauga, ON
Provinces served: ON
Focus: General labour, office support/technical, distribution and logistics, IT, management
Suzanne McInerney, director of recruitment services
Hunt Personnel; also Temporarily Yours and Interim Aide (Quebec)
Head office: Toronto
Provinces served: BC, AB, ON, QC
Focus: Administrative, IT, sales, financial, light industrial
Ted Turner, president
The Keith Bagg Group
Head office: Toronto
Provinces served: All, through partnership arrangements
Focus: Range of services through four divisions
Geoff Bagg, president
McDonald Green Personnel Inc.
Head office: Cambridge, ON
Provinces served: International client servicing
Focus: Skilled trades, administrative, IT, executive
Helen Jowett, president
The People Bank
Head office: Toronto
Provinces served: AB, MB, ON, QC (and other provinces through subcontracting)
Focus: Financial services, call centres, office administration, IT
Geoff Dillon, marketing coordinator
Pro Tec Global Staffing
Head office: Thornhill, ON
Provinces served: All
Focus: All industries and staffing specialities
John Chrobak, president
PTC Financial Staffing Inc.
Head office: Concord, ON
Provinces served: ON
Focus: Accounting and finance
Lawrence Teltscher, CEO
TES – The Employment Solution
Head office: Toronto
Provinces served: BC, AB, ON, QC, Atlantic
Focus: Engineering, IT, strategic/
executive placement, professional office services
Steve Cook, v-p, information technology services
Some staffing scenarios
From The Affiliates:
A large insurance organization, undergoing international restructuring, required the expertise of a labour/litigation lawyer, information technology lawyer, expertise in corporate commercial and corporate securities, and an additional corporate commercial lawyer. The corporation did not want to add to head count at this time, knowing that once the restructuring was done there would be no need for these skill sets.
The cost of outsourcing this work to another firm or seconding a team from an outside firm would have cost double or triple the amount of keeping the work in-house. Also the company’s general counsel, who directed the project, watched over the quality of the work, work ethic and personality fit of each of the lawyers in the event they decided to hire on a full-time basis.
-Sheron Hindley-Smith, Regional manager
A production manager at a financial company had difficulty filling a position on their team which required someone to work with a talented but somewhat “difficult” designer. By using freelancers and the temp-to-perm option, they found an employee who could stand up to — and thrived — the personality of the designer. Meanwhile, the work got done and the company’s reputation wasn’t tarnished with a “revolving door” label.
One corporate client needs a senior designer from time to time and looks to our talented freelancers to augment their communications department staff. Paying a freelance designer for a month or six weeks a few times a year saves money over hiring a full-time designer for low-end inside communications projects.
-Michelle Wales, Director, Canadian Operations
From The People Bank:
A large client in the financial services industry operates a large call centre and frequently needs to recruit new employees. By taking on the employees as temporary for the first 13 weeks, during which time they are employed by The People Bank, the client has the opportunity to evaluate the employees’ skills and abilities before making a hiring decision.
Essentially, the client gets a 13-week preview before making a hiring decision, as contrasted with companies that hire employees after a half-hour interview with no hands-on experience.
-Geoff Dillon, Marketing Coordinator
From McDonald Green Personnel Inc.:
At a plant start-up, a client hires, for a two-year period, an engineer who is a start-up specialist with many years of experience. The engineer’s functional responsibilities include start-up budget, overseeing equipment input, hiring and training of skilled and non-skilled resources and manufacturing processes. Front-line supervisors and managers monitor and maintain systems implemented by the engineer. Their functional responsibility will be focused on the people and process management of the organization.
In the past, clients would have hired the engineer at high cost and drained cash flow. The engineer is fully aware that the services agreement is for two years and that he or she will then move on to a new project. The $100,000 per year salary will then be available for reinvestment or research and development. All parties are content.
-Helen Jowett, President
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