(Note: This is the second of a two-part article contributed by Barb Bruno, CPC/CTS of Good as Gold Training and Development, Inc. Barb is a guest writer for this blog, and we look forward to many more of her contributions in the future.)
Then there’s the fear of not knowing the contracting business. Most people will choose the easy way out, which is to stay in their comfort zone rather than realizing they’ll enhance their bottom line and the value of their firm if they jump into contracting.
For 15 years, I prided myself on the fact that I was a direct-hire recruiter. I bragged that I did no contract business because I was a specialist in direct placement only. I had partnered with firms that did contract placements, and they were providing great talent for my clients.
Then reality hit… I realized that I needed to start thinking about my exit plan. Once I did that, it was a no-brainer to begin offering contract staffing to clients. The results have been phenomenal, and my clients are thrilled that I can now meet even more of their staffing needs. The only people not happy about my decision are the contract staffing firms who were the recipients of my referrals!
Without having contractors actively working on contract assignments, the sales price of your company does not even begin to reflect the worth of your blood, sweat, and tears. Investors love to see residual income, which is what contract placements represent! If you personally don’t want to work on contract staffing, hire someone who will. I also can’t tell you how many direct placements I’ve made as a result of someone starting out on a contract, and yes, I do have a conversion fee! Not only do I earn money for each hour the contractor works on the contract assignment, I also earn a conversion fee when the client hires them as their employee.
Let me list just a few of the benefits associated with contract staffing:
1. You will earn residual income.
2. You will find that contract placements lead to direct placements.
3. You can assist more clients.
4. You can assist candidates who only want to work contract.
5. You will earn more money, and you will have a more profitable exit plan.
6. Outsourcing the headaches
The biggest headache regarding contracting is the paperwork and administration. If you’ve never done contracting before, the best way to get up and running quickly is for you to focus on sales and outsource the paperwork and administration. Those of us in the direct-hire business don’t like paperwork, and there’s a lot less administrative work associated with direct placements than there is with contracts. That’s why most recruiters who don’t have a contracting business view the paperwork as a hassle.
I’ve had the pleasure of conducting training at FoxHire’s functions across the country, and I’m familiar with one of the Network’s Preferred Vendors, FoxHire. FoxHire is a contract staffing service provider that facilitates contract placements for recruiters. What does this mean to you?
It means that you can do your normal recruiting responsibilities, and then broker the contract placement to FoxHire. They become the contract staffing service provider to the client, hire or retain the contractor, and assign them to work at the client’s facility. They handle all of the payroll, taxes, contract administration, employment administration, human resources, benefits, funding, invoicing, and collections. In exchange, FoxHire pays you a weekly commission based on the earnings of the assignment and the hours worked by the contractor. In short, you earn the lion’s share of the residual income without any of the “yuck” work and employment and contract liability.
The transition to contracting is not nearly as painful as you might think, and when you look at your profit and loss statement at the end of the year, you’ll be very pleased with the results of your new profit center—your contract business! You have nothing to lose and everything to gain by adding this segment to your current business. Here’s to a record-breaking year!
