Labour hire agencies can be very profitable if managed correctly. However, managing a successful agency is not easy. There is a lot of competition \u2013 at least in some markets.<\/p>\n\n\n\n
You must know how to differentiate your agency, recruit talent, and attract clients while dealing with competitors vying for the same contracts. This article discusses seven steps to take to have a successful labour agency.<\/p>\n\n\n\n
One of the major mistakes new labour hire companies make is running the business without first defining why they are \u201cbetter than everyone else.\u201d It is challenging to get clients if your company is just like everyone else\u2019s. The same goes for recruiting employees.<\/p>\n\n\n\n
Ask yourself:<\/p>\n\n\n\n
Review these questions honestly. Don\u2019t move forward with your company until you have good answers to these questions.<\/p>\n\n\n\n
The easiest aspect to compete on is price. It\u2019s the easiest variable to change, and everyone defaults to that approach. However, being \u201cthe cheapest\u201d is not always the best strategy. It\u2019s a quick race to the bottom, and the larger agencies have the upper hand.<\/p>\n\n\n\n
A better strategy can be to make your company a boutique agency that caters to a specific niche. Agencies that cater to companies that need technical or educated professionals usually have an upper hand in price. And they have less competition. Recruiting highly technical talent is difficult and time-consuming.<\/p>\n\n\n\n
When competing for employees, you must become the place where people want to work. Think about your company. Why would someone want to work there? Maybe it\u2019s because you have great clients? Or perhaps you offer high pay and benefits? Or flexibility? You get the gist.<\/p>\n\n\n\n
Now that you have defined why your company is better than competitors, you are ready to start looking for clients. Specifically, you want to find the right clients<\/a>.<\/p>\n\n\n\n Unfortunately, all the so-called \u201ceasy\u201d ways of getting clients are crowded with competitors. LinkedIn, industry associations (some of them), and internet boards are full of salespeople bombarding hiring managers with emails. You can try this approach, but it\u2019s hard for your message to get through the noise.<\/p>\n\n\n\n On the other hand, the so-called \u201chard\u201d way of getting clients is not crowded at all. I am referring to cold calling.<\/p>\n\n\n\n Everyone hates cold calling. Salespeople hate making the calls. Hiring managers hate getting the calls. And most calls result in hang-ups \u2013 except when they don\u2019t, and the call results in a sale \u2013 a sale that you got because your competitors did not cold call.<\/p>\n\n\n\n Everyone touts the benefits of referrals and networking as the best way to build the business. And we agree \u2013 they are great. However, these strategies often take time to develop. They seldom produce results quickly.<\/p>\n\n\n\n For better or for worse, cold calling is one of the quickest and most cost-effective ways to build the business. Remember to always follow regulations about cold calling and to use proper business etiquette when making calls.<\/p>\n\n\n\n Most industry veterans agree that employee referrals are the best way to staff your company. This time-tested strategy works well, especially if your company is established.<\/p>\n\n\n\n However, it\u2019s hard to get referrals if your company is new. This challenge can be significant if you are just starting and growing your labour hire agency.<\/p>\n\n\n\n If you are just starting, consider other channels to build your employee base. The usual channels are employment trade shows, LinkedIn, or many of the websites that allow you to find employees (CareerOne<\/a>, Indeed<\/a>, ZipRecruiter<\/a>, and so on).<\/p>\n\n\n\n Matching temporary candidates with potential clients is difficult. You must ensure that both parties \u2013 the employee and the client \u2013 are happy with the transaction. And you must do this profitably.<\/p>\n\n\n\n You must know your employees\u2019 skills and preferences. Develop a database to collect questionnaires and interviews. Similarly, learn as much as you can about your client and their needs. Ensure that the match is good for both your employee and the hiring company.<\/p>\n\n\n\n You must ensure that both your employees and clients are happy with the assignment. Unfortunately, this step involves dealing with the inevitable issues that arise between employers and employees. This task is one of the hardest parts of owning an agency. There is no way around it.<\/p>\n\n\n\n You must know how to deal with employee and client complaints \u2013 usually about each other. And you must solve these issues in a fair and satisfactory manner.<\/p>\n\n\n\n Mastering human resources and relations is critical, as it allows you to build your reputation and, ultimately, get client and employee referrals.<\/p>\n\n\n\n Running an efficient labour hire agency requires a lot of organization. Numerous details need to run like clockwork. Otherwise, you ] encounter problems \u2013 quickly.<\/p>\n\n\n\n You must collect all time cards in a timely fashion and ensure they are accurate. Without time cards, you can\u2019t run payroll or invoice clients \u2013 the two most important functions of running an agency.<\/p>\n\n\n\n Payroll must be run every week. Always be careful about taxes, record retention, entitlements, etc. Handle them appropriately and seek professional advice if required..<\/p>\n\n\n\n Your bookkeeping system must be kept up to date, including all time card information. This effort, although time-consuming, allows you to invoice clients quickly. Remember, your invoices bring cash flow, and cash flow covers payroll and other expenses.<\/p>\n\n\n\n But there is more. You must also interview potential employees, find new clients, deal with disputes, file paperwork, and so on. The list is never-ending. Successful agency owners are task-masters who also know how to delegate important functions to the right people.<\/p>\n\n\n\n Lastly, successful labour hire agency owners watch their cash flow carefully. They understand that growth can be a double-edged sword. Clients pay invoices in 30 to 60 days<\/a>, while employees prefer weekly payments. You must have the resources to pay employee salaries while waiting for invoices to be paid.<\/p>\n\n\n\n The most effective way to achieve this goal is to build an emergency fund ahead of time. This step can be difficult. But in the long term, it is the best way to manage things.<\/p>\n\n\n\n Alternatively, you can finance your payroll<\/a> using invoice financing<\/a>. This strategy gets you immediate funds, which you can use to pay your staff.<\/p>\n\n\n\n Invoice finance can be a great tool for labour hire agencies that are growing quickly and need funds to pay employees. Most lines are flexible and can easily grow with your business. Here is more information about how invoice finance works<\/a>.<\/p>\n\n\n\nStep #3: Find the right employees<\/h3>\n\n\n\n
Step #4: Become a master match-maker<\/h3>\n\n\n\n
Step #5: Master human resources and relations<\/h3>\n\n\n\n
Step #6: Master organization<\/h3>\n\n\n\n
Step #7: Watch your cash flow carefully<\/h3>\n\n\n\n
Need Labour Hire Agency Financing?<\/h3>\n\n\n\n