Employers Have Choices Too! Part Two of Three Part Series

by Apr 14, 2022

Staffing choices can have massive ramifications to a public or private organization. Hiring the wrong individual may cost a company millions while making a great hire could lead to a vast increase in profits as well as other invaluable benefits such as positive brand enhancement and earning a reputation for excellence.

In Part One of this Three Part Series, we’ve examined the way the staffing industry has changed over the years, in addition to the Pros and Cons of utilizing Contract workers and Temp-to-Perm employees.

In Part Two, we’ll examine two more options staffing firms can offer clients when it comes to fulfilling specific employment needs. The two, which potential employers may not be aware of, include Direct Hires and Payrolling Services.

Clients may ask themselves, particularly if they already have a Human Resource Department; why would there be a need to also utilize a staffing firm if the individual will be brought on as a permanent employee?  But there are many reasons why the Direct Hire option may still be a wise business decision.

As we’ve already mentioned in Part One, the pool of highly qualified candidates has been shrinking not expanding. While there may be a lot of job seekers out there, those who are have the right skill sets, experience, knowledge, expertise, and the potential for additional growth, are somewhat limited. Those who are on the market, tend to get hired in a matter of days rather than weeks. Here are some of the Pros and Cons of Direct Hires and Payrolling Services.

Direct Hires:

Pros

  • Today’s candidates are looking for more stability and permanency than in past years. Rather than work their way up in an organization or honing their skills at various venues and temporary assignments, many are choosing instead to opt out of the temp pool and jump right into a permanent placement. By utilizing a Direct Hire method clients can allow the experts to identify, recruit, and vet the best individuals to meet an organization’s specific needs.
  • Sometimes a day or two can mean the difference in securing the best person for a position or losing out to a competitor. Unless your organization spends a fortune advertising your open positions everywhere, chances are that you may be missing out on the one individual who would be the best fit. If you are only posting the job on your entity’s website the odds are drastically reduced that the special candidate will ever see your job posting. On the other hand, candidates who are looking for a Direct Hire position understand that staffing firms are in the business of matching potential Direct Hire candidates with the best and most appropriate clientele. Some of the best candidates may only spend a single day searching for a position although many will first seek the help of a staffing firm to secure a perfect match.
  • Candidate resumes do not always tell the full picture of a candidate’s strengths, weaknesses, career goals, or work desires. While someone may be looking for a Financial Analyst or Administrative position, they may have a resume which does not do them justice. In those cases, most HR representatives will not give them a second glance. However, staffing Recruiters, who are used to viewing scores of resumes on any given week, have much better insight into the types of errors great candidates sometimes make in creating a resume. By the same token, staffing professionals are also more adapt to interviewing candidates who may look wonderful on paper but would not be the right fit for a client based on the Recruiter’s knowledge and experience.

Cons

  • Having a staffing firm work to find you the perfect Direct Hire candidate minimizes your risk in the vetting and selection process, although you will only have limited time, usually about three months, to recoup a fee or partial fee in the event the individual does not work out.
  • While a temp-to-perm candidate allows a client to see firsthand how the individual can perform their job and whether they will fit in with the rest of the team, a Direct Hire will be immediately part of the permanent workforce from the start. In order to ensure that you are getting the best individual for the job, and reduce the chance of a poor match, clients may want to utilize the services of an agency which has been around for a while and already have established credibility within the industry.
  • The Direct Hire process traditionally takes longer than the placement of a contract and temporary worker. However, if identifying an individual who is not only the best person for the position but one who sees their future with an organization, it may be better in the long run to invest the time to allow a staffing agency to get the right person for the right position, the first time around.

Payrolling

Pros

  • If a client would like to bring back say, a retired employee to train a new worker or to handle a specific project, having a staffing firm payroll the employee may be a perfect solution.
  • An organization may find itself in dire need of a Consultant or an employee with a very special set of skills, if the company or entity is awarded a new contract they hadn’t planned or budgeted new personnel for. While the organization may not be in a position to outright hire the Consultant or specialized employee, they don’t want to hire a temporary contract worker and run the risk the individual leaves for a higher paying permanent position somewhere else. By payrolling the individual, the organization can set the rate of pay and benefits the person will receive for the duration of the contract, or for a special project. In that case, payrolling a Consultant or critical employee may be the best choice.
  • Employee levels are usually set annually. However, if a public or private entity finds someone they really want to bring on but do not have the approval or resources to bring the individual on as a permanent or even temporary contract worker, payrolling the individual would be a great stop gap method to retain the employee until a new position is approved. Hourly bill rates, from staffing firms, tend to be lower for payrolled employees because the client organization itself has already identified and recruited the potential employee.

Cons

  • How a payrolled employee is listed and paid may be tricky. While some organizations will focus on finding a way to simply compensate a contract staff member, many candidates are looking to be paid as a W-2 employee rather than a 1099 worker. In short, the difference between the two types of employees is how taxes and benefits are handled. In the case of a W-2 employee, taxes, social security, and other items such as Paid Family Medical Leave are taken out, while the individual can still be eligible for various benefits depending on what is offered. In terms of the 1099 employee, they are usually responsible for handling their own tax payments and in most cases do not accrue or receive any benefits such as paid holidays or health insurance from their employer. Contemporaries employees, whether they are temporary workers, temp-to-perm candidates, or even payrolled employees, are all listed and paid as W-2 workers.
  • Payrolled employees do not have the same type of investment as a Direct Hire because in most cases the work arrangement is for limited time only. When a project is complete or a contract fulfilled, payrolled employees tend to move on to the next assignment.
  • Many staffing firms do not offer payrolling services and are not equipped to have an employee hit the ground running. Clients should check around to ensure that there is already a system in place to accommodate all their needs.

Bottom Line

Most organizations have very specific requirements and they should try and find a staffing firm that will be able to accommodate all of their needs. Whether it is bringing a Consultant or specialized employee on for a specific project or contract, or procuring the additional layer of expertise for identifying, recruiting, and vetting a Direct Hire candidhttps://pixabay.com/vectors/people-special-different-employment-4009327/ate, staffing agencies can serve as an excellent partner.

In the last part of this Three Part Series, we’ll explore how staffing firms can accommodate all the needs of clients, and what to look for when deciding on which option is best for you.

Image retrieved from Pixabay under the public domain.

 

This posting is brought to you by Contemporaries Inc., one of the best temp agencies in Boston MA. Also available for payrolling employees in Boston and Greater Boston

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