CategoriesRecent PostsFollow Us:Bolt Staffing BlogPiggybacking Your Way to TroubleSeptember 14th, 2011At the beginning of this year, we posted an article about what’s in a mark-up. Of course we had no way of knowing what the year’s news would bring.
All of us compete in the marketplace for business. All of us have fixed costs that determine the price our clients and customers pay for our products and services. In the staffing business in addition to salaries and payroll taxes we must also insure our employees against the risks covered by Worker’s Compensation.
Imagine the competitive advantage we’d enjoy if we could reduce or eliminate one of these mandates. Our customers would enjoy the benefits of lower costs and we’d lop off a healthy market share. Sounds good right?
Not so fast!
As you are well aware, the field of employment is a legal minefield. Decisions made with the best intentions can often backfire, jeopardizing the survival of an entire company. If you engage a staffing agency, you want to be sure they are operating to the strictest standards of legal and professional conduct. It is possible that questionable practices of your agency can haunt your company as well.
Recently one of our competitors was soundly spanked for lowering their Worker’s Comp mod rate in a way a jury found out of bounds. While there is no indication that State Fund will pursue employers who used the competitor’s services, it does serve as a stark warning to everyone who is getting an exceptionally low mark-up from their agency.
If that’s you, it’s time to ask your agency how they are doing it. Are the agency’s employees actually being paid what you think? Are the agency’s employees eligible to work in the USA? Is the agency paying all the costs of employment?
If an under capitalized and flaky operation finds itself accused of failing to withhold payroll taxes properly for example, could your company be liable for those bills if the agency were to suddenly vanish?
When looking at paying real dollars, does shaving a few percentage points really look that smart? Could your agency be taking you for a piggyback ride off the cliff?
Making the Most of Your Orders With BOLTAugust 18th, 2011Successful placements begin with a clear description of what you are seeking in your new employee. The time you invest with us when you place the order will pay big dividends in getting you the person you’re looking for. Obviously a job description is a good place to start. Is this a position that you can rely on BOLT to fill without an interview? In many cases, if we can directly dispatch someone to your office, our costs, and therefore your bill will be lower. For example, many clerical and administrative positions can be dispatched directly provided you give us a clear picture of what you’re looking for. Looking for a certain competence in MS Office? Let us know, along with details like dress code, hours, workdays and we can often find someone who will be a perfect fit without you having to waste your time interviewing. Our “Four Hour Working Interview” is not only cost effective, but by putting the person to work in your company you’ll see exactly what you can expect. While we call this an “interview”, please recognize that the employee will expect to be paid for their time, regardless of the outcome. Other positions like warehouse labor can be filled the same way. Don’t hesitate to ask our opinion when you place the order. If we don’t think a direct dispatch or working interview will work we’ll tell you. Once we have the order in hand, we’ll work to get you the best fit for your company. If we’re doing a direct dispatch we’ll contact you when we are ready to send out the employee. At this point whether it’s a direct dispatch or someone you’ve interviewed it’s a great idea to have one of your current employees ready to meet the new person and help them get settled in. This “on-boarding” process will happen one way or another, so why not do it the most efficient way to get your new person productive as quickly as possible? Giving a trusted employee the opportunity to show a new person around sends a powerful message to both the new and experienced person. You are showing confidence in your “old hand” and telling the new person that they are a valued member of your team right from the start. No matter what your business, your success depends on how successful your employees are. Making people feel welcome instills confidence and gives them the best opportunity to show you what they can bring to your business. The True Costs of HiringMarch 25th, 2011
How Perfect is Your World?If you’re thinking of adding to your staff, congratulations! You are in a market glutted with qualified, skilled people. This is the best buyer’s market for employers in living memory. It’s natural to look at this fact and assume that an ad on Craigslist or one of the popular commercial job boards is the most efficient way to find what you’re looking for. While that’s true, it is a great way to get that resume you’re looking for, however, it will probably come with 97 others that you don’t want. Sifting through the paper mountain is a daunting and wearying task. In some circumstances you may get such a huge response that you could actually find yourself discarding the one you’re looking for simply because you overlooked it on your way through the mountain. When comparing the costs of hiring it’s worth comparing the traditional “post and pile” method to using an agency to get you to the same place. Looking at the above chart, we compare the costs to you, the employer, to get your new employee through the front door on his first day. We’ll assume that the staff person you assign to sort through the resumes earns $15 an hour and costs you $20 with payroll taxes and benefits. As you can see there is a large range for on-line job posting costs. You can have far more exposure using our free resources than a single ad on Craigslist ($75) or Careerbuilder ($419). With Bolt your job will be posted on Careerbuilder in addition to Simply Hired, and Indeed. You will also have access to our extensive database of local people as well as our own word of mouth grapevine. A 100-resume response is not unusual for typical office or industrial positions. Your trusty staff person will probably get through the resumes in an hour and then spend another 7 hours emailing, calling, and coordinating with the three top candidates for interviews ($160). You can plan on another two days interviewing and reference checking them ($320). Let’s assume you will test your top candidate successfully ($100). Congratulations! Your new person will be starting Monday. If you were thrifty and used Craigslist it only cost you $655 to get to this point. On the other hand, if you splurged with Careerbuilder it’s $999. Of course you could have called Bolt and have your new person ready to go free of charge! Hmmmm. For most positions we recommend a 4 hour working interview rather than tying up your staff interviewing people we’ve already qualified. It works like this: instead of spending the time and money to find someone who interviewed well and tested fine, why not pick up the phone, dial us and bring in a qualified, tested, drug and background checked person for $0? Rather than take all the paper and charm of pretty resumes and good interviews at face value, bring someone in today and see how they actually do in your company, at the job you want them to do, working with your own employees. Let’s say you’re paying Bolt $25 an hour for your new $15 an hour employee. The four hour working interview would cost you $100. If everything works out, you just saved yourself $555 to $899 to get to the same place in the hiring process. What happens if things don’t go well? With Bolt you pick up the phone and get a replacement. The other way you can plan on spending another $500 to $999 to do it all over again. Don’t forget the impact of the lost time on your business’ productivity. Keep in mind you’re paying Bolt an additional $5 an hour for your Bolt assigned employee. That means he will be working for you for 131 to almost 200 hours before the cost of a Bolt employee catches the cost of your own hire. Usually you can hire our employees for little or nothing after 3 months. In other words, in three months, you’ll pay us about what it would cost you if your first choice didn’t work out and you had to repeat the hiring process. For that premium you get to know your prospective employee and the quality of his work. You also benefit from the fact that he is Bolt’s employee as you become comfortable with his work ethic, trustworthiness, and the ups and downs of your own business cycle. Sure in a perfect world, someone from Craigs or Careerbuilder may be less costly than hiring through Bolt, but really, how perfect is your world? Joanne Sanders Tale from the Trenches: On Background ChecksFebruary 4th, 2011Beginning this year, Bolt Staffing started performing criminal background checks on all employees prior to placing them on long term assignments with our clients. Until now, we’ve followed industry practice and performed checks on people placed in positions of trust such as accounting personnel, or when requested by our clients. While that has proved adequate, we decided that these days the risk of a bad decision is just too high. As a result we’ve incorporated the policy into our standard operating procedures. As with all procedures, there arise situations where judgment suggests maybe it’s not necessary. One place this can arise is with a payroll service employee. In these situations our clients ask us to put a person they would like to have work for them on our payroll. There are many reasons for clients to do this, and since the client makes the decision to invite the person to work for them, there’s an argument that says a background check by the staffing vendor is unnecessary in this case. Last month we were faced with this exact situation. Our client had found someone on Craigslist and asked us to “payroll” her. We sent a recruiter to the client’s office to meet the prospective employee. In the course of the routine paperwork, the prospect mentioned she’d lost her wallet over the weekend and didn’t have any ID whatsoever. (Warning bell number one chimes.) Further into the process, we learn the only reference she has for a former employer is a cell phone without voice mail. No one answered the phone. (Bell two chimes.) At this point our recruiter began to wonder if putting this person through a background check might alienate our client. After all, the client thought enough of this woman to invite her aboard. Would they be insulted if we found something untoward? Nonetheless there are more than enough warnings to demand it. During the interview process, our recruiter mentioned that we do a criminal background check on all prospective employees as part of our hiring procedures. By this time, the recruiter decided the need to follow procedure overruled any concern about hurt feelings. It amounted to choosing between exposing the client to loss and hurting some feelings. Looking at it from the bench that’s not a big deal. Things are different on the field, however. Our recruiter parted company with ”that feeling” that all was not quite right. After all, the applicant had no ID and no references; all we knew about her was that the client found her on Craig’s List. This was a problem that was about to fix itself. Before the recruiter got back to the office, we got a call. The prospective employee called and withdrew her application. She said she had “made a mistake” in the past that might show up on the background check. What was the problem? Oh a small offense that resulted in her being charged with Grand Theft! Ah the comfort of good procedures! However the best procedures aren’t any help unless they are followed. That’s where having the ownership of a staffing company on hand to make those judgment calls makes all the difference. At Bolt Staffing, our owners are Morgan and Joanne Sanders. They are both involved in managing the business on a daily basis. They work with their loyal staff members and clients to create policies such as our new background checking procedures because they understand personally how important caution and care taken before a hire prevents huge regrets later on. Before taking a chance with your company’s future, why not give us a call? What’s in a Markup?January 21st, 2011Have you ever taken a percentage to the bank? Have you ever cashed a check payable in percentage?
Like many businesses, the staffing industry has various ways to price our services. Markup is a common term that usually refers to a fee that is a percentage of the employee’s wage that’s added to that wage. Included in the fee are all the mandatory payroll taxes and costs of an employee. Agencies are no different than other employers: we have the same payroll costs as anyone else. In addition to the alphabet soup of costs: FUTA, SUTA, FICA etc., there’s the real bugbear, Worker’s Compensation Insurance. After all these are paid, there remains the extra pennies that you pay the agency for their service.
Worker’s Comp costs can range anywhere from 2% of the hourly wage to 100% for the riskiest jobs. While FUTA, SUTA and FICA are reasonably predictable, WC varies for each job, each agency and each client. The safety records of both client and agency figure heavily in the premium.
Today’s competitive market for jobs puts lots pressure on agencies to lower their markup. All things being equal the pressure on markup is really pressure on profit. Since we all need to profit in our businesses, that pressure can translate to some pretty creative tactics that often wind up being an exercise in deception.
Consider a $10/hr. employee. An agency might want to get a 70% markup and prices him at $17/hr. The client balks and demands a 50% markup. So, the $10/hr. employee will now be billed to the client at $15. However, there is nothing to stop the agency from finding someone to work for $8.82/hr. with strict instructions not to reveal his pay to the client. The client congratulates himself on his tough negotiating, the agency laughs at their cleverness and the employee pays the price.
On the other hand, what if the client simply said, “I can afford $15/hr. to perform this task?” If the work gets done to the client’s satisfaction, does it matter if the agency paid the employee $8.00, $8.82 or $10? Maybe the agency will start someone at a lower pay rate with the understanding that if the client is satisfied he or she will get a raise.
Confining the agency by dictating a markup can be a disincentive for both the agency and the employee, whereas specifying a Bill Rate may gives the agency a reason to look for someone willing to work for a lower initial pay.
In the end, is the fuss over markup really worth the effort?
The staffing business is peculiar in that companies historically have tended to quote their profit as if it’s their price. We certainly don’t ask Safeway what their markup is on the items on their shelves. Yet somehow in staffing it’s important. In the end it can become a shell game that can wind up doing more harm than good.
If the can of beans or bar of soap at Safeway is competitively priced, who cares what their profit is? As with any purchase, the marketplace is the consumer’s best defense. If someone is overcharging in a competitive market they won’t be doing it long.
While we can quote markup, in the end the only thing that matters to any of us is the dollars and cents of the Bill Rate. As with any other transaction, a company’s profit is relevant only if it drives the price out of line in either direction. That’s why we’d rather talk about Bill Rate.
All else being equal, in our business the difference between companies is service. How well do they screen candidates? Are their sales people willing to meet and spend the time with you to really understand your business and your individual needs? How do they react when things go wrong? Are they easy to reach and responsive, or do you talk to a call center in a faraway land?
No matter how easy it is to get responses to ads, there is still an art to finding the right match for your job opening. The fact that hundreds of people might be interested in your job doesn’t change the risks you assume when you bring new employees on board. The wrong decision is infinitely more costly than the few pennies you pay an agency to find the right match for you.
Remember until you’re happy and sure you have a winner, the agency is on the hook for the costs of a bad decision. Whether they take the hit with increased Worker’s Comp rates or unemployment insurance, the agency runs interference for you until you’re ready to bring them on board.
Give us a call today and let us quote you a Bill Rate to get the job done!
Surprises: Eligible to Work?August 26th, 2010Eligible Workers? Are you considering taking advantage of flexible staffing to meet the challenges facing your business? There are many good reasons to do it. Obviously temps give you insulation against uncertainty, whether it’s coming from the business climate or the unpredictable nature of the human being. While it’s clearly a buyers’ market for employers the overwhelming response to a help-wanted ad is another reason to capitalize on the efficenies of outsourcing your recruiting. While there are enormous savings and organizational benefits to using agencies, we’ve recently learned of a serious downside that not only reflects poorly on our industry, but also exposes companies untold woe. In the past week, I’ve heard from two new clients that had used other agencies that recruited and staffed good workers. Both employers took the time to train, evaluate and decide to hire the agencies’ employees. In both cases, when they ran the employee’s social security numbers they failed to match. Needless to say, all the client’s time, money and emotional investment in these people was lost. Both reports were shocking to me. Bolt Staffing has always used an independent background checking company to verify the social security numbers of all the people we place. I had assumed our competitors did likewise. We take every possible measure to ensure that each person we send to a client is eligible to work in the USA. I never considered the possibility that others didn’t. On reflection, while it’s unfortunate it isn’t all that surprising. Economic pressures can make people do things they wouldn’t ordinarily do. Obviously this is a corner some people are willing to cut. If you have personnel supplied by agencies other than Bolt, you may want to review their verification procedures and demand evidence that your temporary employees are eligible to work in the USA. In addition to financial considerations, they could also be exposing you to legal trouble. Whenever you use Bolt you can be assured that we’ve taken every precaution to protect you against this kind of surprise. We keep objective evidence of eligibility on file for all employees. We can present it to our clients whenever they ask. Make sure your current agency can do the same. Writing Effective Job DescriptionsAugust 18th, 2010Writing effective job descriptions is part art, part science. The difference between a good job description and a great job description can mean the difference between recruiting average and exceptional talent. So to steal a line from author Jim Collins, how do you go from “Good to Great”? Here are a few essentials to crafting “Great Job Descriptions”: Start with “the end in mind.” From the accomplishments you wish the position to make, you can then work “backwards” in your job description. Be specific. Include priorities. Specify required vs. desired qualifications. Don’t be too specific. Avoid cliches. Or, you can simply call Bolt Staffing. As Sonoma’s leading staffing and employment agency, we help local employers find the skilled talent they need. Contact Bolt Staffing today. |
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