Financing Your Staffing Agency

Do you own a staffing agency? Is meeting payroll your biggest challenge? Learn how to finance your growing staffing agency.

Keywords:

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Article Body:

As a staffing agency owner, your biggest concern is making sure your employees get paid on time - always. In this article, we’ll discuss a tool that will help you get the funds to meet payroll every time. We’ll also talk about a financing tool that will let you take on new contracts, even those that you think are too big and can’t possibly afford to win. This financing tool is easy to qualify for (it’s NOT a business loan), can be set up in days and can give you all the necessary funding your staffing agency needs.

This tool is called invoice factoring, and also referred to as receivable factoring. This financing is not offered by a bank, but rather by a factoring company.

If you are like most agency owners, your problem is not lack of work or customers. I am sure you have plenty of both. Your biggest problem is that your customers take between 30 and 60 days to pay their invoices. But, your employees need to be paid weekly (or bi-weekly). And unless you have a fat bank account, the math does not work. Sooner or later, you’ll run out of money.

But what if you could eliminate slow paying clients? No, I don’t mean that you should stop doing business with them. I mean, what if you could turn them into quick paying clients? What would happen to your business if every client was guaranteed (yes, guaranteed!) to pay you in 2 business days? How many of those clients could you take?

Let me have a guess. You could take as many of those clients as you could get your hands on.

By factoring your staffing agency receivables, you can turn your slow paying invoices into quick paying invoices. The process is simple:

1. You do your work, as usual. You bill your customer but then submit a copy of the invoice to the factoring company for financing

2. The factoring company provides you an immediate advance on 90% of the invoice. You can use that money to meet payroll and pay expenses

3. The factoring company waits to get paid by your customer

4. Once they are paid, they rebate the remaining 10%, less their fees

The main requirement for factoring is that you do business with good paying customers. If your customers pay regularly (but slowly) you can almost always qualify. And as opposed to a business loan, your personal credit is usually not an issue.

So, if you own a growing staffing company, be sure to consider invoice factoring.

Choosing An Executive Search Agency

If you’ve recently decided to find your new executives and senior management through an executive search and selection agency, then here’s how to find and evaluate those agencies before you sign up.

There are thousands of recruitment agencies, big and small, but only a minority focus solely on recruiting for executive, senior manager and director-level appointments. If you need to fill important jobs with the best people, you need to select an agency that has access to exc...

Keywords:

executive recruitment, executive search, executive jobs

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If you’ve recently decided to find your new executives and senior management through an executive search and selection agency, then here’s how to find and evaluate those agencies before you sign up.

There are thousands of recruitment agencies, big and small, but only a minority focus solely on recruiting for executive, senior manager and director-level appointments. If you need to fill important jobs with the best people, you need to select an agency that has access to excellent candidates and the experience to know which applicants will suit your vacancy.

When you approach a recruitment specialist to find senior people for your business, you should ensure that you know exactly what they’re offering, and what experience they have in recruiting the types of candidates you are looking for.

Always shortlist a few agencies before committing yourself. Meeting the consultants and seeing how they work makes it easier to decide which agency you want to work with. Before you meet each agency, you should draw up a list of questions to ask them. For an agency that says it specialises in executive recruitment, you should be asking questions along the following lines:

• What is your experience in executive search and selection?
• How do you source the candidates that you pass to me?
• Do you narrow down the list of candidates before sending them for interview?
• What are your fees, and when do they apply?
• What happens if I employ the candidate and discover they are unsuitable for the job within the first month?

If you have a number of executive appointments to make or you are going to require the services of your executive search and selection company in the long term, then you should be looking for a consultant with whom you can establish a good working relationship. Their understanding of your business helps them to source the most appropriate candidates and also to put forward other good candidates who sign onto their books, giving you an opportunity to talk to them before they get sent to other companies.

Executive recruitment is a competitive sector and you won’t be short of agencies who want your business. But even with all these agencies courting you, you should take the time to establish whether their services will really benefit your business.

Employers – 10 Questions to ask a Recruitment Agency

If you are an Employer looking for permanent staff, using agencies can be an efficient and cost effective method of recruitment. Do your homework carefully and you can concentrate on what you do best, running your business.

Keywords:

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If you are an Employer looking for permanent staff, using agencies can be an efficient and cost effective method of recruitment. Do your homework carefully and you can concentrate on what you do best, running your business.

Here are some example questions to ask

How will they charge? - Most agencies these days supply permanent staff on a contingency basis. This is where, you only pay the agency if you select and recruit one of their candidates. The popular term for this is “No placement no fee”.

What will they charge? - You need to make sure you understand how much using an agency will cost you. This is normally expressed as a percentage of first year salary. This will depend on a number of factors such as industry, location, level of role etc, but fees can often be between 10% and 30%. You might at first consider this to be rather a lot of money but just think how much its worth to you getting the right candidate with the minimum of fuss.

Is there a rebate structure? - Make sure that you agree to some form of rebate structure. Like it or not, some candidates will start a job and decide that its not for them and leave after a short time. You need to make sure that if this happens you can reclaim some of the fees paid to Recruitment Agency. This is normally done via a rebate structure. A typical example of this would be

If they leave within 4 weeks 80% of fees paid are refunded
If they leave within 8 weeks 50% of fees paid are refunded
If they leave within 12 weeks 20% of fees paid are refunded

However these scales vary between agencies. It is also becoming more common in competitive areas to see 100% refunds if the candidate leaves within 12 weeks.

What is their CV policy? – You need to make sure that they are going to make things easier for you and not just send through dozens of CV’s that they have on their books, just on the off chance. Most reputable agencies will have a definite policy on this and be able to give you an idea of the number and quality of CV’s in advance.

Any Client testimonials? – This is to help you ensure that you are dealing with the right agency. You don’t want to have to spend a lot of time explaining to them what your company does or how they do it etc etc. The best way to avoid this is make sure that they have satisfied clients in similar business to your own. This will also give you an idea of how experienced the agencies and their consultants are in your business area.

How many agencies should I appoint? – It is a good idea to have a small number of agencies working for you as long as they are all on a contingency basis. This way you maximise your exposure to potential candidates while not spending all your working day dealing with agencies. A good idea is to start with 3 to 5 of them & see how it works out. You can always add more if you need to later.

What about a specialist agency? – Where possible you should consider industry specific agencies this if possible. Although they may charge more in fees this may be offset by the fact that they will probably be able to advise you more knowledgably about the type of candidates available, market salary rates etc.

Are there any trade bodies? – A number of agencies are members of the REC (Recruitment and Employment Confederation), which represents the industry within the UK. You should try to confirm that they are members and that they conform to their code of conduct.

Will they do Candidate referencing? – You should check to confirm that the agency you plan to use both will confirm the identity of the candidates they send you but also if required can take up their references on your behalf.

And finally

Any other useful facilities?
Do you have an interview suite? – very useful facility as it means that you can interview prospective candidates at their offices.
Do you offer Psychometric testing / ability testing?
Can you provide salary survey information? – This enables you to offer the candidates a realistic salary

Remember, recruitment agencies can charge you quite a lot of money so make sure that they are working for you!

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