Recent figures put unemployment in the state of Arizona at 9.7%, which represents one of the highest figures since the 1980’s. We all know that the economy, both locally and nationally, is in a recovery period, but that does not help with the current state of things. What does unemployment mean to a business owner? Can we take advantage of the situation, or is it just another aspect of the current downtrodden economic cycle?
How Does Unemployment Affect Me Again?
As an employer you likely know that you pay an unemployment tax. As long as you have anyone working for you at least part time 20 weeks per year or pay a worker $1500 in a quarter, you are subject to the tax. The actual costs to individual businesses differ based upon how much your payroll is and how long any former employee that you are currently paying out worked for you during their base period. The base period is a predetermined amount of time that the state deems representative of an individual’s income. If employees receive unemployment, the amount they receive is based upon how much they earned during the base period.
In essence, if a worker was under your employ for the whole base period, you pay the employer’s entire share of their unemployment payments (the State and Federal Governments also contribute to unemployment payments). Likewise if they worked for you for half of the base period you pay half and so on. You are charged by the state and they compile your unemployment payments into an account. When former employees are granted unemployment, the state takes money from your account and uses it to pay part of the payments. If your account ever gets too low, you can expect your unemployment taxes to increase.
Unemployment taxes are an unavoidable part of running a business that hires on workers. As you can imagine, the current economic times mean that a significant amount of money is being paid to citizens who are out of work. Some businesses are likely experiencing increases in taxes due to their accounts being drawn below acceptable limits. Hence it is costing them more money to do business, possibly with less staff. This is definitely a negative aspect of unemployment and the current economy.
So What Can We Do?
Since giving up is not an option for most business owners everyone must find ways to deal with the situation. As a staffing company, we are obligated to point out that using our services could help you bypass the unemployment costs associated with some of your new hires. When it comes to temporary workers, we are the employer so we handle the unemployment costs for you. We can let you bring on new people and try out new positions. Instead of your payroll, and of course your unemployment taxes, going up, your expenses do. While this might sound bad at first, increased expenses equal less taxes in the long run, so by using temps you could actually decrease your taxes and get the workers you need. Not a bad deal.
Otherwise as employers it is important to remain positive and optimistic. We can look at the large pool of unemployed workers as potential opportunity. It means that we have more options to choose from to staff our businesses, so long as you have the time to evaluate multiple candidates. It also means that we should all be focused on growth. The lessons learned from running a lean staff have shown us how to effectively operate with fewer people. They have also shown us the value of having a few more sets of hands around. As we grow, our businesses we will be able to effectively put the citizens of Arizona back to work, while increasing our own profits. That has the potential to be a win-win situation.
There are many benefits of using a staffing agency. While some people feel that only well-established companies or firms that operate in particular industries have enough “extra resources” to properly use temporary labor or direct placement services, this is simply untrue. In all reality, a staffing company itself is an “extra resource,” especially for a smaller business that is growing.
When your business grows, owners and managers find themselves with a lot more on their plates, often in a short amount of time. Partnering with a staffing agency can take some of those responsibilities off of your plate and give you more time and money to focus on the factors that will really drive and organize your company’s growth.
Think about what a staffing company can do for you
- Save Time- As you are growing, you will need to devote time to welcoming new clients while making sure that your existing ones are still serviced. This means you might not have time to go through the hiring process. Staffing agencies go through the hiring process as part of their business model, so why not save the time and call in reinforcements that can be there on short notice?
- Save Money- Hiring staff costs money. Once you calculate in your (or your hiring manager’s) time, along with the money involved in listing job ads and increased insurance and payroll costs once you find your staff, you likely have a large figure. Some HR managers have estimated that the figure can be as high as $2,000.00. It doesn’t take much math to realize that a phone call to a trusted staffing partner costs less.
- Put You at Ease- Staffing companies evaluate and hire every single day. They know how to spot good candidates and determine whether an applicant would be good fit for the positions you need filled. When you hire someone, you never know how the person will work out. A staffing company can send employees who have proven their value by working for previous clients of the staffing agency and already shown that they can work out. You also have the ability to try out a temporary worker, so if you choose to let them go, it is an easier process than firing an internal hire. You can also replace them with a phone call, so that you always have the level of staff that you need on hand.
- Give you Flexibility- Perhaps this should have been first on the list for benefits to a growing company. As you grow, you do not need to be hampered by anything, especially the staff that is helping you expand. Staffing agencies make growing and downsizing your staff easy. You do not have to worry about difficult terminations as temporary workers know from the start that they are not permanent. If you originally want temps, but later decide you want to keep them full time, a staffing agency allows your business to be nimble.
As your business expands, you have a lot of things to worry about. Staffing should be an important thing but not a costly and time consuming one. The economy is gradually starting to improve, not just in Phoenix or Flagstaff, but all over the country. Think about the solutions that temporary labor can provide for your growing company.
Running a business requires a dedication to the industry and the ability to compete within it. Once a business begins to grow, it starts to require more attention to details outside the core competency or function of the business. One of the things that has become an issue is human resources. While your staff literally is a group of human resources, most business owners know far more about what their business does, than about what a hiring process is or how to make sure that they are in compliance with regulations as they pertain to employing people.
For many business owners and managers, the requirements that human resource management places on them tend to add unneeded stress and take time away from their core functions. If they choose to hire employees to handle HR matters, then they must foot the bill for additional payroll, benefits, and sometimes even space to accommodate those employees.
One way to avoid this stress or the necessity of hiring a large HR department is to outsource some of the HR functions to a staffing agency. It makes sense if you think about it. A staffing agency exists to perform HR functions. They hire, stay on top of insurance and regulation and perform other HR functions, not as a required part of their business but as the business itself. They have the dedication to the staffing industry that many people in other businesses do not. This dedication allows them to perform most HR functions better than individual Human Resources departments.
Take the hiring process for instance. Individual HR managers take time to list jobs, audit resumes and applications, and bring people in for interviews. Hiring is an occasional part of their job, whereas it is a huge part of a staffing company’s job. They have more time to focus on coming up with the best interview questions and have more experience actually interviewing people, which often makes them better judges of candidates. Hiring is their business so it doesn’t have to be yours.
The biggest issue that HR departments have to deal with is compliance. To have employees in Arizona an HR manager must consider:
- Keeping payroll and related expenses within budget
- Workers’ compensation, the laws associated with it and making sure that their company has the right coverage at the best price
- Occupational safety and health standards that dictate what a workplace must have and how it must operate (although you’ll need at least passing knowledge of this regardless of how you source your staff)
- Youth employment laws
- The vast and specific employment laws
Not only do these issues take a sound knowledge base, but they also take time and money. If you choose to let someone else handle these issues for you, it can really help out. Staffing agencies that can provide you with temporary or even permanent staff have their operations set up around these issues. They can focus on them and streamline processes like hiring or constantly keeping up with changes in employment law. The ability to streamline means they can usually address these issues at less cost than businesses that focus on other things.
Less cost for them often means their customers save money when they use their employees. The can also buy larger insurance policies which can sometimes bring their costs down as well–yet another way they can afford to provide you with employees at reasonable prices. There is nothing wrong with not being able to outperform a well-run staffing agency; after all it is what they do.
Especially right now, as the economy seems it might be taking a slight upturn, why not save time and possibly even money by using a staffing agency? You can go about your business while they send over workers who have already passed a screening process. Using temporary labor is a great option because it allows you to see if your recent successes will last and allow you to bring on full-time staff. If you bypass temps and hire people on full time you might have to fire them in a few months. If they have worked for you long enough they may even qualify for unemployment benefits which can cost you in raised premiums.
Yet another example of the finer points of human resource management getting in the way of running your business. HR functions must be addressed, just not necessarily by you.
Running a business can be hectic job. It doesn’t matter if you own the company or are charged with managing a firm for someone else–you have a lot to get done. In some cases it pays to outsource some of the day-to-day tasks so that you can focus on your core functions. One of the tasks that can take up a good portion of your time is the hiring process.
There aren’t always enough hours in the day to post job openings, screen applications and set up interviews. Then you actually have to set aside time to facilitate the interviews and decide whom you want to bring on. While you are doing this you aren’t managing your budget, making sure that your customers are happy or working with your current employees so that everything stays on track.
So why not save a little time by letting an experienced staffing agency take some of the workload over for you? At Labor Systems we know that you have individual needs when it comes to staffing. We also understand that you are a dedicated manager who is focused on bringing in the right people. That is why we offer three different ways to use our staffing services.
Sometimes an employee needs time off for vacation or family matters. Other times you need extra sets of hands, but only for a limited amount of time. A temporary worker, or maybe a few, can make times like this easier for you. We can provide workers for a limited amount of time, who will come in and help you get the job done. Once you are back to normal and don’t need them they are sent on to another company. There is no stress associated with firing an employee or cutting back hours to keep staff on. Temporary workers can help hotel mangers staff housekeepers in Phoenix for a week-long convention or make sure that a contractor in Tempe has the unskilled workers they need to help out with a construction project.
This is one of the most flexible options out there when it comes to staffing. In some instances you might want to bring someone on, but are not sure if you will need the person full time. In other instances you want a full-time employee, but need to make sure that the person is the right employee for your business. In either case request a temp to hire employee. The worker shows up with the understanding that he is working on a temporary basis. If personalities and demand work together, you have the option to keep the temporary hire as a full-time employee; if not they move on to another assignment. While this option is great for any industry, it is especially good for professional businesses. A construction company might want to feel out their need for a secretary, or an office manager might want to try out a new mail clerk. Either way temp-to-hire leaves your options open. We have left managers happy from Bullhead City to Flagstaff.
Hiring can be a lengthy process. If you don’t have a large Human Resources department, you might not have the time for the process. Regardless, you still need full-time staff. That is where direct placement comes into play. We have interviewed and evaluated candidates. You tell us what you are looking for and we match you with a fitting employee. You will have the opportunity to evaluate the employees once they arrive to make sure that they work out for you. If you prefer to go in a different direction, we understand and will send over a more suitable candidate; if not, then all the better. Nothing pleases us more than our ability to match our workers to your needs. Going through a staffing agency for your hiring process can be win-win, except in this case you win twice. You get a great new employee and you don’t have to devote a significant amount of time to doing it!
So you run an office and besides managing work flow and meeting with clients, one of the primary issues you deal with on a daily basis is staffing. When it comes down to it, your employees are one of the most important parts of your business. It doesn’t matter how good your product or service is, if the people behind it cannot make things happen. Add in budget constraints and finding the proper balance can be a daunting task. Our clients have found that one of the best ways to balance quality and budget is to supplement their staff with quality temporary personnel.
You may be concerned about a staffing agency’s ability to provide ‘quality’ temporary help. A common misconception is that people work temp jobs because they cannot find full-time employment. While that may be true in some cases, many workers choose temporary work because they seek the same flexibility that businesses seek. People have different lives, interests, schedules and responsibilities and temporary agencies offer opportunities that are not available in the traditional job market. In addition to recruiting and screening quality employees we have an interview process that helps us evaluate prospective placements not only in terms of skill level, but also personality, attitude and work philosophy. Our goal is to match the right employee with each customer we serve.
There are numerous advantages to supplementing your staff with temporary employees:
- Lowered costs: Temporary employees do not accrue benefits expenses. Additionally, since we are responsible for payroll and compliance issues, your HR and payroll department can devote time to other tasks which saves your company money and increases productivity.
- Greater flexibility: If key employees need time off for maternity leave, family business, extended vacation or sudden illness, temporary employees can help ensure that your business does not stop running prior to the full-time employee’s return.
- On-demand hiring capability: Businesses often deal with fluctuations in their business cycles. Whether these fluctuations are seasonal or your business receives a large order, utilizing temporary workers allows you to right-size your business, up or down, without dealing with hiring and termination issues.
- A trial run with potential hires: Many of our clients turn to temporary employees as a way to “test out” someone for a full-time position. There is great value for both the employer and the temporary employee to test the relationship prior to entering into full-time employment. After this temp-to-hire period, the probability of a “long-term fit” is quite high.
This is a small list of benefits that make temporary workers a great option for small and large businesses. Temporary agencies specialize in recruiting and hiring and are focused on providing the best workers possible to their clients. We have been in business since 1985 and would love the opportunity to work with you. Try us out and see how we can help.