staffing trends and hiring challenges for small business

Staffing, Small Business Hiring, and Cash Flow | #TheMoneyFactor Episode 29

On this episode of #TheMoneyFactor, CEO Ian Varley sits down with Erik Sizemore, President of the Georgia Staffing Association to discuss staffing trends and hiring challenges. Watch the episode below or read the transcription.

On today’s show we’re going to be talking about some trends affecting the staffing industry and specifically what challenges are facing small businesses when it comes to hiring new employees. That’s today on The Money Factor. Again, I’m Ian from Eagle. Thank you for joining The Money Factor. I am delighted to have with me today Erik Sizemore, president of the Georgia Staffing Association. Erik thank you for coming. I appreciate you being here and sharing some of your wisdom and experience about what’s going on right now.

What Are Some Staffing Industry Trends Right Now?

It’s really important for our viewers and listeners to hear your expertise, particularly, what are some of the trends that you’re seeing out there in the staffing industry? Well, the staffing industry is attached to the economy at the base level, labor. We’ve seen a massive shift. We’ve seen shifts in wages being paid, shifts in bill rates going up, and we’ve seen a change from the temp to hire model or contract model into more of a direct hire model. So, we’re totally in flux, and in our industry that’s what we’re looking for.

A totally stable economy tends to flatten out our growth, but when things are growing or there is trouble finding people is when staffing agencies flourish. It is the disruption that staffing agencies help fulfill. Whether that disruption is growth or whether it is just difficulty finding people, they’re there to help.

What Are the Challenges for Staffing Agencies in Finding Qualified Talent Right Now?

The problems are on both sides. If there is a high unemployment rate, a lot of people out there, you put up an ad looking for a position and you have 700 respondents. On the other side, if there is a very low unemployment number, you have no qualified respondents responding. As staffing services, we are geared and developed to be able to utilize technology. Our interpersonal relationships and our grassroots recruiting elements work together to be able to take care of our clients. Where you might only be able to source one to five resumes before you’re trying to set up interviews, we can source 25 to 30.

When I’ve needed people here at Eagle, we find that the agencies that we go to are able to source the people that we need. It is getting really hard at the minute. The pandemic, the federal unemployment benefits ending, all of those things seem to be causing a massive shortage in people. I think a lot of people have adjusted their lifestyle. A lot of people have made adjustments, so they don’t have to take whatever jobs available to them. They can be a lot pickier regarding an opportunity they’re going to take. Companies are competing for the same talent.

What Are the Hiring Challenges for Small Business Owners Right Now?

A lot of companies that we talk to are experiencing significant growth and their concerns are that they cannot find the right people quick enough. We definitely have more open positions than people. Rather than the number of people that you’re submitting to a company, now it’s shifted to the number of people that are retaining at that company once they’re there. People used to employ a lot of contract work, short-term work. Well, the labor pool out there doesn’t want to accept that now. The labor pool’s expectation has changed. They want full-time positions, direct hire positions, and higher pay rates. All these type of things is forcing companies to reconcile the changes in our marketplace.

We fund a lot of small companies that are growing. When we hear they’re struggling to find people, that’s a good and a bad thing. We know they’re growing. We know we can help them. There’s no simple solution other than looking at the level of benefits that you’re paying, working with a good recruiter, and those types of things in order to be able to answer that immediate need. Also working with your own company culture.

How Can You Retain Employees Right Now?

Retention takes a lot of elements. It’s not just a salary range when you ask what’s important to people. If you try to ask them to put it in into order of importance: compensation, flexibility, access to benefits, strong career pathing, etc. You’ll be very surprised how different groups of people will source those differently and change the level of priority. Based on your company and what you’re able to do, you have to look internally and to determine what are your strengths and what can you offer. Compensation no longer just is that smaller range. They look at the entire package.

It’s a buyer’s market when it comes to looking for jobs. It’s a transparent market. Potential employees will go on glassdoor and other sources to look at the reviews that’s happening with your company. People are much more engaged with going online and looking at your news releases, your plan for growth things, things along those lines. Average retention of employees has dropped. We’re looking at two to three years now rather than five to ten. Back in my mom’s day and my grandparents day, it was your entire life for the gold watch at the end. So, we’ve come a long way since living and dying with one company.

Everything is really shaking people up. They’re looking at what they want, and if it’s not what they want, they’re going to be ready to move on. Well, for us in the staffing industry it becomes very difficult to navigate. If companies are in distress, that might open up their need for people. It might slow down their ability to pay. They might be feeling financial hardships because their companies are not able to keep up with them. So, we get into this gap where you have growth, potential opportunity, and orders that are there to be filled. However, now you’re in a situation of how can you best fulfill that need without putting yourself into a financially tricky position. That’s where we help with factoring.

Staffing Trends and Factoring

We help a lot of staffing companies. There is that classic cash flow gap where you’ve got to pay the temps on a weekly basis and maybe you can only bill it out monthly or you’re only going to get paid monthly. So we do find that many people turn to factoring when they’re in the staffing industry to really sort their cash flow, particularly if they’re growing.

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How Does Factoring Help Staffing Companies Grow?

We can help them with their cash flow because there’s nothing worse than a slow paying customer. You can pass that responsibility for following up on your invoicing to us, and we do it all day long. It’s part of the service. So, not only are you getting cash up-front when you send the invoice through with the timesheet, you’re going to get paid the next day. You don’t have to wait 30, 45, 60 days. We’re going to help you follow up with those receivables, too. I love the synergy between what we do and what you guys do.

Staffing companies provide a solution to help businesses find the right people at the right time. We provide a solution on the financing side. If they’re growing fast, they need to know that their cash flow is going to withstand that growth and that they can take on that order. Staffing agencies find the people for them, and we find the funds. It is a great match, and we are really proud to be a member of the Georgia Staffing Association here at Eagle. It is a massive market, and we can’t recommend enough working with a great employment agency. If you can’t find one, go to the Georgia Staffing Association of the American Staffing Association. There are thousands of members there. It’s not difficult, and they’re really willing and able to help you find the right talent for your business if you’re struggling right now.

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