Save Expenses By Using Better Hiring Procedures

When it comes to outsourcing certain aspects of their operations, most businesses follow the same procedure. They post an RFP and wait for bids to come in, whether they require marketing services, website creation, construction work, or a staffing firm to provide temporary labor. They examine the bids and often pick the offer that is the least expensive and most closely matches their requirements.

Is that procedure the greatest way to hire individuals, even though it can be suitable for landscaping projects or employing construction companies? Labor expenditures are among the top three costs for any organization, including those involved in warehousing and logistics. Therefore, it makes sense for businesses to consider ways to reduce costs. The issue, though, is that firms only consider price rather than total cost.

It has become standard procedure to issue an RFP, choose a staffing agency based on pricing, and then complete the hiring process. But is it the ideal method?

Will you make short-term savings only to discover that your long-term expenses are significantly higher?

It's time to reconsider how your business chooses a staffing firm.

And it ultimately boils down to this: Could you use less if you had better employees? The majority of businesses quickly answer "yes," indicating that if they had superior candidates, they would be able to reduce their headcount by 10% or even 30%. A 30% labor reduction would result in significant financial savings for the company. All it takes is to hire superior employees.

Why does that occur, then?

It implies that operations and the procurement department must work together. It involves the supervisors and those who regularly oversee these temporary employees. What are they lacking? What types of individuals and skill sets are necessary to complete the task swiftly and effectively?

The decision-makers must consider the markup charged by the staffing agency if operations are excluded from the purchasing process. But if the company is 20 percent overstaffed, that markup is of little significance.

The Answer

Reversing the process is the answer. Change your way of thinking instead of asking for bids, choosing the five lowest bidders, and hope they can deliver. Select the five staffing agencies you believe are most qualified to meet your company's specific needs, and then negotiate an arrangement and a pricing with them that is advantageous to both parties.

It is a unique way of thinking, yes. However, we firmly believe that this is a long-term tactic that will lower total spending and prevent businesses from overstaffing the warehouse in order to lower labor costs.

Contact us if you need help in addressing your staffing problems!