Inside Logistics

Learning curve: Buying talent on a budget

How to strategically outsource your staffing needs


July 4, 2013
by Tracy Clayson

In Canada, every region has its share of skill shortages and worker retention/employability challenges. In our industry, the cost of fixed labour—specifically for full-time employees—is something companies try to reduce to improve financial performance.

To counter such problems, companies in almost every industry connected to supply chain are increasing their use of temp agencies and suppliers of contract employees. However, to properly manage labour costs and achieve profit performance goals, companies require well-planned HR programs. Forecasts and budgets must incorporate the corporate labour planning strategy.

Many industries have used a combination of in-house employees and outsourced labour to avoid having their workforce grow beyond market requirements for each cycle, season or project. To do this successfully, companies must take a careful approach to sourcing staff from agencies. Cost savings must be proven through improved productivity, accuracy, customer satisfaction levels and sustainable and consistent results.

Companies must engage good staffing providers. Done properly, this will lead to a successful new business relationship, benefitting both parties over the long term. Done incorrectly, it could lead to mismanagement, and a pattern of contracting costly and ineffective temporary workers.

Qualifying the staffing company vendor is usually the job of HR. However, the operations department must also stay highly engaged to make sure prospective workers are screened and selected with the appropriate corporate goals in mind. It is also extremely important for a company to clearly communicate performance expectations.

Though good planning can cut the risk of incurring runaway costs for outside labour, even the best laid plans can be dashed. Having a collaborative, positive, productive relationship with a staffing provider will ensure requirements and expectations are met.

This includes finding ways to offset costs. To reduce the cost of temporary staffing services, companies should ensure they have a pre-screening and orientation program consistent with their in-house programs. They must also measure improvements in performance along the learning curve; reduce overtime; avoid use of temps during statutory holidays; implement a time tracking system; use satellite tracking for temps in the field or on the road; offer fixed shift schedules; and share performance metrics and objectives to improve productivity.

The general labour pool for a staffing company is no different from any employer, so workers from agencies whose contract assignments are varied tend to have a broader exposure to the industry.

Still, anyone new—either an in-house employee or temporary workers sent from a staffing company—requires full details of the scope of the work. They also need opportunities to build their knowledge base with orientation and training related to the position and duties.

Too often, companies view outsourced staffing as a stop-gap measure. Instead, they should be looking at this as a great opportunity to find candidates with long-term potential. Therefore, it is important to establish a buy-out term up front, or have a process in place for making it known to staffing firms when they intend to hire outsourced staff.

In some cases, permanently hiring temporary workers makes sense, especially given the investment of time that has already been made. Depending on the level of success your recruiting or staffing firm has in finding strong talent, relying on agencies to source your workforce can be a great HR tool.

An effective recruiter with an extensive industry contact database can access temporary candidates which companies hiring directly may not be able to reach, especially since in-house recruiters are unlikely to contact competitive firms.

Some companies may feel their employer brand and in-house recruiting efforts will be effective enough to help build a workforce, but they are the exception. And though I’d argue that while the ratio of in-house versus outsourced workers hinges somewhat on a company’s cost management strategy, ultimately it’s about how eager hiring firms are to pick up the kind of candidates that can move the business forward.

To stand out from the crowd as the employer of choice, companies must do more than upload job postings and lay out expectations. Today’s talent pool expects to be courted and pursued. And it’s easier for companies to find the good people when they know what their current employees think of them, including their temporary workforce. It provides companies with a better understanding of their hiring challenges and retention success factors.

All this will lead to the hiring of talented, productive employees—no matter what avenue you have chosen to take in order to get them on board