RSSM Digital TempNet Edition December 2019 - Page 5

With a low unemployment rate that hasn’t graced our country in decades, new hires and skilled employees feel empow- ered to ‘play the field’ and shop around for the most attractive employer. Operating in an atmosphere that courts more jobs than people to fill them, high turnover is now one of the most challenging issues facing staffing agencies today – particularly when they feel the cut of losing 75% of new hires within 15 days in some positions. set and in advance hinders to prosper in it. the sector situation, With on a for low an unemployment Read exploration into complicates today’s staffing headaches a brilliant strategy to ease their pain. though. Organizations fre- their ability to do so. rate that hasn’t graced our quently point their finger country in decades, new High Churn Rate Aches hires and skilled employees at the skills gap as cause for Low Compensation According to a Work Insti- many vacant positions. A feel empowered to ‘play tute analysis, 40 percent of Repercussions recent survey conducted by Not fully understanding the field’ and shop around employees who quit their Adecco USA found that 92 their markets regarding for the most attractive job in 2017 did so within percent of business leaders employee compensation, employer. Operating in 12 months of their hire believe today’s workforce an atmosphere that courts date; 50 percent of those companies often overlook does not have the skill set more jobs than people to resigned within 90 days. 2 the costs associated with needed to succeed in their fill them, high turnover unoccupied positions and industries – with commu- is now one of the most Unsatisfactory compensa- high turnover. As staffing nication cited as the num- challenging issues facing professionals, we must help tion reportedly stands as ber one skill candidates staffing agencies today – the top reason employees business leaders realize 1 particularly when they feel lack. search for greener pastures, that the costs they incur the cut of losing 75% of and record-low unemploy- from decreased produc- new hires within 15 days in Pricing Pressure Points tion, abbreviated services, ment, bountiful job oppor- some positions. Many companies cannot tunities are the runner-up overtime, and other asso- Read on for an exploration afford to pay higher com- catalysts. ciated expenses, may very into today’s staffing sector pensation without risking well exceed the expendi- headaches and a brilliant profitability and thus, face However, additional ture of increased salaries. strategy to ease their pain. the strains of operating on contributors exist, such lower margins. Too often as the lack of growth and Recently, Total Staffing they bid on contacts with development opportuni- Solutions conducted an Staffing Industry ties, poor management, a static or minimal wage analysis for a client who Distresses and toxic company culture. growth forecast built into was paying 21% less than With a 49-year-low un- When employees don’t see their pricing models, with the average wage for simi- employment rate at 3.7 many contracts set to one, lar work in their geograph- a progressive path forward, percent, talent shortages, three, or more years. ical market. The costs they feel underappreciated, or pricing and wage pres- dread coming to work, incurred associated with sures, and high churn rates their eyes and loyalties This puts enormous pres- overtime and additional challenge staffing leaders sure on businesses to wander – especially when benefits were substantial. to fill positions and serve maintain quality produc- there are so many other Our analysis confirmed clients. tion and services while also that increasing their pay proverbial fish in the job capping costs at bid level. sea. rate by 21% would power Talent Shortage And the squeeze passes all them to attract and retain a Troubles the way down the supply larger workforce and lower The Treatment Close to 7.4 million job chain to entry level. Though no magic pill exists their overall labor spend- openings exist in the U.S. ing by 3%. to remedy every affliction currently. With the 3.7 per- Labor costs have risen the industry faces, there cent unemployment rate, around 2.8 percent over Of course, not every sit- is one antidote that could this calculates to 5.6 mil- the past year. Employers uation will work out with help address the issues lion workers looking for who do not introduce a such numbers, but staffing we’ve discussed: the federal a job. We have more jobs growing forecast into their firms must relay to our cli- Work Opportunity Tax than workers. Good news pricing models will find it ents that it is a possibility. Credit (WOTC). for employees, a conun- problematic to compete for We have a responsibility to drum for both employers quality staff. Often employ- help them understand their and staffing agencies. ers are willing to increase labor market and how best The skills gap further pay rates, but the pricing Easing the Pains of Today’s Staffing Industry 5 WWW.RSSM.BIZ | WWW.RSSM.BIZ