The smartest companies have learned to deftly adjust to changing production levels through the use of contingent labor—turning fixed costs into variable costs.
- A general contractor working on a large multi-family job was in a pinch because he had to fire his framing contractor. He needed framers—now. And framers who owned a particular kind of air compressor. Before this, he had equated temporary labor to day labor—unskilled and unreliable. They didn’t realize they could hire highly skilled and experienced carpenters from a temp agency. And they found a temp agency that could screen the framers for their skill as well as whether they had the right kind of compressor, among other specifics capabilities.
- A contractor handling all the low-voltage work for a specialty grocery chain found it hard to keep a crew busy full time, as the workload fluctuated week to week and season to season. He found a skilled trades temporary partner who could fill in with workers—five or six, sometimes 10 or more—all over the market. When the winter slowdown arrived, he didn’t have to go through the headache and heartache of a layoff. He just called his staffing partner and told them which workers would be off, for how long, and that he expected to get them back out when work picked back up again. In the meantime, the staffing partner filled in the gap for the workers, and they were available to go back to working the grocer’s jobs when the contractor had the work.
- A contractor at a large hospital job was getting hammered by deadlines. Inspections and walk-throughs loomed. What was getting in the way of progress was all the clean-up that needed to get done. He found a temporary staffing agency that provided a small army of skilled laborers to do clean-up—people who had specific skills with specific tools. Their contact at the staffing firm would call regularly to see how the workers were performing and made regular safety inspections to make sure, for example, everyone was wearing their PPE. The contractor ended up hiring several of the workers full-time.
Contingent workers make up around 2 percent of the overall US workforce. The American Staffing Association reports that the staffing industry makes a vital contribution to the U.S. economy while servicing businesses across virtually all industries. Staffing provided jobs and career opportunities for about 16 million employees per year pre-pandemic (13.6 million during the pandemic).
In the cyclical manufacturing and logistics sector, use of contingent works runs as high as 20 percent to 30 percent for some roles. The average for construction companies is 11 percent.
Where does your construction company land?
Have you learned the benefits of hiring contingent workers when you need more skilled tradespeople?
It’s really a no brainer.
Turn fixed costs into variable costs
With contingent labor, you only pay for the workers you need when you need them. You’re not paying people to stand around on a construction site. Temporary labor employment offers you the flexibility you need to serve your clients. You can grow your business as you need, for a certain amount of time, and then shrink personnel and costs back down. You can look for personnel to fill certain roles without committing to individuals as full-time workers.
Reduce overtime pay
Rather than putting additional demands on current permanent staff, an employer can use a staffing agency to handle the extra work during busy times. Better that than burning out your full-time employees.
Goodbye hiring hassles
Think about going through that mountain of resumes and applications. The drug screenings and background checks. A good temporary agency will handle all of that. Most temp agencies have pools of qualified individuals that they sought out and already interviewed. Also, the tradespeople they send you will all be highly skilled—so no worry about training.
Reduced administrative costs
Many temporary labor firms will handle the bulk of the administrative costs related to the workers themselves. A good constructive staffing agency will handle all the employment-related tax filings, obtaining employee benefits. Legislative/regulatory requirements—for example, the Affordable Care Act—can make it difficult to remain compliant. A good staffing agency handles the regulatory and legal requirements for hiring staff.
No more bad hires
Bad hires are bad for business—they cause productivity to tank and waste money on advertising and training for a replacement. If a temporary hire turns out to be a valuable asset to your company, you can offer them a permanent position within your company. When you work with a staffing agency to hire temporary employees, you can use a temporary assignment as sort of a “working interview”—making sure he/she can handle the job and that he/she is a fit for your culture.
Temporary staffing can be used by big and small businesses alike in almost any industry. On average, construction companies make 11 percent of their workforce temporary, gaining a flexibility that allows them to respond to the unforeseen ups and downs of the construction industry.
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