Recruiting temps can help give SMBs key flexibility and agility, yet they are held back by an expensive and cumbersome search and hire process. But times are changing for the better, says TempRocket’s Andrew Johnston…
There are more than 1.5 million temporary workers in the UK, which makes up around 5.7% of the country’s working population, according to the latest figures from the Office of National Statistics. Although the number and proportion of temps around the country has varied little over the past decade or so, they are arguably more important now than they have ever been – and this is particularly the case among small and medium-sized businesses (SMBs).
So why is temporary recruitment so important to SMBs? Well first, because as Brexit approaches, the UK economy is potentially heading towards its biggest period of instability since the last recession. And second, because a shrinking world driven by online technology means competition both in the UK and across the globe continues to increase.
An uncertain economic environment means that companies need to be able to react rapidly to changing circumstances. If recession does bite they need to be able to release staff as quickly as possible, or take on more people to make the most of an upturn. Temporary staff can provide this flexibility. Increasing competition, meanwhile, makes it vital for SMBs in particular to respond swiftly to changes in customer demand to gain market share. Again temporary staff can help to provide the required agility to achieve this in the short term.
However, the current temporary staff environment doesn’t make life particularly easy for SMBs. Although they probably don’t realise it, many are suffering financially when it comes to recruiting temporary staff through agencies when compared to larger enterprises. This is because they get stung by bigger agency margins due to the fact that they don’t have the volume requirement of bigger businesses, resulting in less negotiating power. If you’re booking 10 temps a year compared to 10 temps a week, for example, it’s unlikely that you’re going to get as good a deal. This gives larger companies an immediate financial advantage over their smaller counterparts.
Another key factor is that the current set up of the temporary recruitment sector makes it difficult for companies to find the right temps quickly and easily, particularly those firms like SMBs that don’t tend to use temporary staff that frequently, so lack experience in terms of knowing where to look. And as mentioned previously, temporary staff requirements usually tend to be quite urgent, either for quick expansion or to replace key personnel.
The problem is that the model is broken, with few ways for hirers to connect directly with contractors. This makes it difficult to avoid using a temp agency. We have already mentioned the financial disadvantages at play here, but there are also lots of agencies in the marketplace, so which do you choose? This dilemma often means SMBs register with several which can take a lot of time and effort – something most small businesses simply can’t afford.
The good news is that times are changing, thanks to the introduction of online temporary recruitment platforms. These new disruptors bring hirers, contractors and agencies together in one place and make it quick and easy to register. SMBs can simply search for the type of contractor they need from a UK or even global database, or rapidly search agencies if they prefer to do down that route. What’s more, some of the more innovative platforms offer an online bidding system, which means SMBs will always get the best possible agency rate, reducing the chance of them being penalised because of their size.
It isn’t wrong that many temporary recruitment agencies do not hold relationships with smaller companies within their geographic locations, it’s simply not within their required focus. Therefore, as a SMB requiring a temporary staff member, the approach is very much about educating all the agencies you choose to call in terms of what you need, what you do and, more importantly, understanding your available budget. After all, the consultant will be targeted on margin, which means that price is key to them – and in some cases, more so than the actual temp’s ability to carry out the work required.
Registering on an independent temporary recruitment online platform solves this problem because SMBs get to search personnel and rates prior to selecting an agency. This puts the onus on the agencies using the platform to make sure they have all of their temporary candidates listed for the hirer to find and book, ideally via a bid process, to ensure that not only are SMB budgets met, but also the right person is found to carry out the work required.
These platforms are streamlining temporary recruitment to the benefit of all parties, and they might just create the flexibility and agility that SMBs need to survive and thrive in the face of growing competition and uncertain economic times.
Andrew Johnston is founder of temporary recruitment platform TempRocket
A version of this article was published in Small Business | 12 September 2018