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Contract Staffing 101: Everything You Need to Know

The world has shifted to contingent and flexible working arrangements. The global situation in recent months has only accelerated this trend, as employers look for ways to keep up with changing regulations. They need more flexibility than ever, especially when they consider that they may have to rapidly shift their team back to remote work or be ready to scale in any direction in the foreseeable future.

Employees are also benefiting from flexible work solutions, which allow them more freedom. Today’s workers want to get experience, and they love the independence that comes with these more flexible arrangements. They can test out many different career options or build expertise through projects and contracts. They can also make sure they’re never bored or feeling stagnant.

Given these factors, it’s little wonder that there’s increased demand for contract and contingent staffing services. If you’ve been thinking about jumping in, you’re probably excited for this great opportunity.

You also have plenty of questions about how to launch your business the right way. You’re not the only one who has seen the opportunity, so you know you need to do things correctly. We put this guide together to help you get started on the right foot.

Is Now Really the Right Time? Looking at the Market Data

Before you decide to open your doors, you’re looking at the market data. Given the past few months, you’re likely asking if now is really the best time to start offering contract staffing solutions. After all, unemployment has skyrocketed, with many firms in many different sectors furloughing or laying off team members. Contingent workforces and education solutions have been particularly hard hit.

There is good news in all of this, though. Several markets are actually expected to see growth, including the nursing, insurance, and legal workforces. Perhaps surprisingly, education staffing is also expected to grow, likely on the back of demand for more flexible solutions in Fall 2020.

Why Contract Staffing?

Another question on your mind has to do with the type of staffing service you’re planning to offer. Why offer contract services at all? Wouldn’t it be better to offer permanent placement?

There are quite a few reasons to consider offering contract services. First and foremost, it’s the best way to meet your clients’ demands. As noted, the workforce has been shifting toward a more flexible construction, with more freelancers, contract workers, and contingent positions. In fact, earlier this year around one-quarter of the US workforce was made up of contingent roles. The pandemic has likely pushed this trend forward, as employers seek more flexibility than ever before.

It also allows you to hold on to talent. When you offer only permanent placing, you’ll constantly be on the lookout for new talent. When you work with contract staffing, many of the people you place will turn to you again when their contract expires. This keeps everyone happy, as workers find more jobs and you can fill clients’ open roles quickly.

Finally, you might want to offer contract services as a way of expanding your current offerings. If you already offer permanent placement, then expanding into contract staffing can add a new income line to your business. It also increases your value to your clients as they seek new and innovative ways of meeting their staffing needs. Since they already know and trust you, they won’t need to look anywhere else.

Is Contracting Staffing Right for Your Business?

There are quite a few “myths” that go around when it comes to contract staffing. Many business leaders mistakenly believe they can earn more from direct-hire fees. That belief is usually tied to the idea that contract staffing is more intensive, because it requires more administrative effort and know-how.

Some in the staffing industry also believe their candidates won’t accept contracts. This isn’t necessarily true. Some candidates prefer contract work, while others see it as an important stepping stone in building a resume or a career.

You may need to expand your pool of candidates somewhat, but you might be surprised to learn many of your current candidates would be happy to accept a contract position.

Another core belief is that you may not be able to succeed in contract staffing if it’s not already part of your business model. Some believe that making the leap is difficult, because contract staffing is “harder” or has much higher costs. With the right support, contract staffing can easily become part of your business model. While it does have its own ins and outs, once you’ve learned them, you’ll be well on your way.

The contract staffing stream also shows the most promise in terms of growth. While you might feel direct-hire fees are more dependable, there’s huge growth potential in the contract staffing market.

What about Your Clients?

Another concern many staffing business owners have is that contract staffing isn’t right for their clients. You might be hoping to target industries that traditionally rely on permanent hires. If you already have an established business, you might be concerned that you’d be alienating your core clientele by adding contract staffing services.

Given the increasing demand for flexibility in the workforce, many of your clients may already be considering contract staffing solutions. Some may even be working with other staffing firms to fulfill their workforce needs already. They might prefer working with you, though, so the additional service would be something they’d love to see from your firm.

Get Ready for Success

Starting a contract staffing firm or adding contract staffing to the services you already offer can be a big change, but it’s a smart move. Even in the current climate, the contract staffing industry is projected to post growth and continue to present opportunities for business leaders like you.

Working with the right partners can make it easier. If you’re looking for more great advice, check out our latest webinar for even more insight into where the contract staffing industry is going and how you can succeed.


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