Temp Desks Need Consultants, Not Job Fillers

Best and brightest

Temp Desks Need Consultants, Not Job Fillers

Sophie Robertson of Younique Consulting and Rod Hore of Middle Office recently spoke about the importance of temp and contract consultants to reducing business risk and improving the profitability of a recruitment agency. This has never been more in focus than now, as we prepare to recover from the economic impact of the pandemic.

ROD: Sophie, we have both noticed the increased attention to temp & contract recruitment – a number of companies that had not prepared for a downturn in the market are now working hard to build a temp & contract capability for the inevitable rebound.

That is keeping you busy. What are your observations of the past couple of months?

SOPHIE: Training has been a focus for companies led by recruitment business owners and leaders who have been in a downturn before. Some sectors have been faring well e.g. healthcare, civil engineering, medical, IT and govt recruitment. Some of these have been able to make perm placements since March but are also heavily focused on the temp and contracting side.

One business leader had a 3-point recovery plan and training was one of those points. Another said that this is when training is needed the most as they have to sharpen their saw.

Some are unfortunately coming to the temp and contracting arm of recruitment late as the previous 10 years has seen a huge growth in skills shortages and therefore some have been focused solely on perm. Whilst we could not foresee Covid, we do know that there have always been economic cycles…

My advice to all companies and recruiters is that they need to “consult” again as this is when clients and candidates need to rely on them to give expert advice.

Some companies suffer now due to the transactional way they have been doing business before Covid. This has partially been due to some internal TAs keeping the relationships at arm’s length, but also recruiters have been busy filling jobs and perhaps lost sight of what consulting means.

ROD: For organisations that are trying to improve their temp and contract placements business, what makes a good temp consultant?

SOPHIE: Great question that I have been asked a fair bit lately. Here is my “wish list”:

  • Intelligence as the ability to analyse a company’s challenges and provide solutions is imperative
  • Ability to see risks and put into place processes to mitigate them
  • Strong influencing skills
  • Ability to walk the fine line between being an employer and a confidante to the temps/contractors or they won’t be able to get the temps/contractors to go to work and commit.
  • Walks fast!  Whilst this sounds funny, it reveals their natural energy levels and highlights that they will enjoy placing people in a fast-paced setting.

ROD: HHMC Global has written a series of articles about SIA’s Tech Stack and that gives structure to the different technology and the different systems and functions required in the modern recruitment agency.

For companies that are looking at contingent placements for the first time, how prepared are they? There is an increase in responsibility for systems, compliance, credit risk, and work health & safety that comes with this service.

SOPHIE: This is where some companies do not realise that running a temp/contractor workforce is completely different to perms. Many erroneously think temp is a shorter form of perm, which it most definitely is NOT.

This is not something that can be set up overnight as now you need to ensure you have a labour hire license if you are supplying in Qld, SA and Vic with ACT to commence sometime in 2021. The fines are hefty if companies supply in any of those jurisdictions without a license. Yet this happens.

Other areas to be cognisant of:

  • Work cover guidelines and knowing the correct classifications to apply.
  • Work, Health and Safety (WHS) checks to mitigate risk for the recruitment business
  • On-boarding processes
  • Award and industrial relations knowledge to give clients advice and to ensure that temps/contractors are paid correctly. I am still shocked to find when consultants do not know a temp/contractor needs to be paid a 25% casual loading. In many cases, they pay the temps the equivalent of an annual salary for the same position.
  • Credit checks, particularly now or recruitment businesses risk propping up other businesses by supplying contingent staff to run their business.
  • On-going duty of care as some do “set and forget” type of temp/contractor placements
  • Compliance and how important it is to document everything to mitigate risk.
  • The need to know how to mediate if there is an issue between the temp/contractor and the client/ host employer.
  • CRM; is it the best for temps and contractors? Many CRMS are built for perm recruitment.

ROD: It seems that many consultants that are working in temp & contract recruitment don’t have the knowledge and experience to perform at a high level. For example, we see regular examples of awards being incorrectly applied, or WHS issues not being understood or managed. And the lack of knowledge around on-costs and margins is stunning.

What has happened here? Are consultants not trained and mentored or has the job been “dumbed down” in too many recruitment agencies?

SOPHIE:  In some ways tech has enabled companies to make consultants less competent. The consultants are now spoon-fed charge rates with rate cards. Typically, they will have a range they can quote in, but rarely are they able to explain why they quote what apart from going for the highest margin.

It is clear to me that many consultants are not able to explain what the statutory on-costs consists of or how rates are made up. Also, often people do not understand the difference between margin and mark up.

As they do not know what the charge rate consists of, this also puts them in a weak position to justify or negotiate fees with clients. Again this makes the relationship very transactional as there is no expertise displayed to give the clients any comfort in that they are in a “safe” pair of hands. After all there is now a joint responsibility between agency and host employer.

Consultants and businesses without proper understanding of the difference between temp and perm is what inhibits the successful growth of a profitable temp & contractor desk that will safeguard a recruitment business to a certain extent in times of economic downturns.

Recruitment agency owners benefit from allocating their best and brightest to the contingent work. It is the service that will save you in a downturn, and it requires trained and experienced people to make a profitable and risk managed solution.

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