In today’s competitive business landscape, cost savings play a crucial role in determining the success and profitability of companies. One often overlooked strategy for achieving cost savings is partnering with a staffing firm. By tapping into the expertise and resources of a reputable staffing partner like Personnel Services Unlimited (PSU), businesses can unlock numerous benefits that lead to substantial cost savings.

In this post, we will look at specific ways in which working with a staffing partner can improve your business’s bottom line.

Cost Reduction When Hiring

Hiring a full-time employee involves various costs beyond just their salary. These costs include benefits, taxes, training, and administrative overhead.

A 2022 Society for Human Resource Management (SHRM) report estimates that the average cost per hire is nearly $4,700, but can increase dramatically when you include soft costs.

Excerpt from SHRM report, “many employers estimate the total cost to hire a new employee can be three to four times the position’s salary, according to Edie Goldberg, founder of the Menlo Park, Calif.-based talent management and development company E.L. Goldberg & Associates.

Of those costs, 30 percent to 40 percent are hard costs, and the other 60 percent are soft costs.

Soft costs include the time departmental leaders and managers invest in supporting the HR-specific roles of the hiring process. When these are added to the hard costs, the price of recruiting skyrockets.”

Partnering with a staffing firm allows businesses to reduce these expenses by saving time and utilizing temporary or contract workers for specific projects or periods of high demand. Staffing firms handle the recruitment, onboarding, payroll, and benefits administration, eliminating the need for businesses to bear these costs associated with full-time employees.

Handling of Administrative Tasks

As mentioned above, the administrative tasks involved in hiring, onboarding, payroll processing, and managing employee benefits can be time-consuming and resource-intensive for businesses. However, with a staffing partner, these tasks are efficiently managed. Staffing firms have the infrastructure and expertise to handle these administrative responsibilities, relieving businesses of the associated burden and allowing them to focus on their core operations. This streamlines operations, reduces administrative costs, and enhances overall efficiency.

Mitigating Risks and Minimizing Turnover

Bad hires and employee turnover can be costly for businesses. Staffing firms help mitigate these risks by conducting comprehensive candidate screenings and providing temp-to-hire options. By offering businesses a probationary period to evaluate new hires, staffing firms minimize the chances of a bad fit. This reduces turnover costs, including recruitment expenses, training costs, and productivity losses associated with frequent turnover.

According to the Center for American Progress, the cost of turnover can range anywhere from 16% to 213% of an employee’s salary, depending on the level of the position.

Excerpt from the Center for American Progress article, “Among positions earning $30,000 or less, which includes more than half of all U.S. workers, the cost of replacing an employee is slightly less than among positions earning $75,000 or less annually. The typical cost of turnover for positions earning less than $30,000 annually is 16 percent of an employee’s annual salary.

Jobs that are very complex and that require higher levels of education and specialized training tend to have even higher turnover costs. In one study, economist Eileen Appelbaum and sociologist Ruth Milkman find that executive positions, which are well-compensated and likely have stringent educational credential requirements, have higher turnover costs than jobs with low educational requirements. Very highly paid jobs and those at the senior or executive levels tend to have disproportionately high turnover costs as a percentage of salary (up to 213 percent).”

Long-Term Cost Savings and Scalability

Businesses can scale their workforce up or down based on their needs, efficiently managing fluctuations in demand or project-based requirements. Staffing firms provide temporary staffing solutions, allowing businesses to access talent when needed without increasing regular employee headcount. This flexibility leads to significant cost savings by aligning labor costs with actual demand and minimizing unnecessary expenses.

Want to Learn More? Contact Our Staffing Experts at PSU Today!

Unlock the potential cost savings for your business by partnering with our staffing firm at PSU. We are a trusted staffing firm with three offices throughout North Carolina in Shelby, NC (corporate office); Forest City, NC; and Gastonia, NC. With extensive experience and a commitment to delivering the right talent for your needs, we will set your company up for both short and long-term savings when hiring. Contact us today to learn more about how PSU can help you optimize your workforce and achieve substantial cost savings.