WHY DO CANADIAN BUSINESSES TURN TO STAFFING AGENCIES?
Why do Canadian businesses turn to staff and recruiting firms’ services?
There is an opportunity to gauge employee “fit” before hiring. While the fit is not necessarily an indicator of the employee’s performance, it does give you an idea of the work ethic, how they get along with others, and knowledge of the employee prior to deciding if hiring them is appropriate.
Not only can an employer fill the position quickly through an agency, but they will have access to a wider range of talent, including candidates with specialized or scarce skills
Of course, they will be able to adjust their workforce to meet rapidly changing business needs (for special projects, seasonal work, long-term absences or unanticipated absences).
The staffing and recruitment industries are primarily engaged in temporary (staffing) and permanent (recruitment)placements. Recruitment agencies are also involved in executive searches for companies. Both can also be engaged in co-employment services. That is, where shared responsibility of the employee occurs. The company may take over the administrative portion of the employee and/or other employment tasks. While somewhat risky for the employer, a contract, employment leaves the responsibilities under the staffing agency and limits the client’s liability as most of those responsibilities will be undertaken by the staffing agency.
Many staffing and recruiting firms also offer other services such as contract staffing, “temp”-to-hire, direct-hire, managed service provider, skills assessment, training and upgrading, and payroll and benefits administration.
Contract Staffing: This usually occurs when a company takes on a temporary employee for a specific period to complete a project or replace a maternity leave. The temporary employee still belongs to the agency and thus the company taking on the person is not liable for ongoing ESA requirements.
Temp-to-Hire: This is an option whereby an employer may take on an agency employee and decide that they would like to hire them permanently. Depending on the length of time and the relationship between the client and the staffing agency, there may be a fee involved that could go as high as 480 hours at the going rate, less the time they have already put in as a temporary employee, or a percentage of the anticipated annual wage.
Direct Hire: Recruitment firms and some staffing firms are involved in finding companies permanent employees, whether this includes general workers, skilled workers or professionals. Typically, the fee is based on the person’s annual starting salary.
Managed Service Provider (MSP): This essentially means that the staffing agency will manage all aspects of the client’ recruitment needs from managing vacancies to onboarding and offboarding. The agency will perform all those routine HR assignments for those that do not have a Human Resources Department or have one that has a short-term requirement for additional assistance. There are also situations where the employer would like to have representative on site to manage any issues regarding their temporary employees.
Skills Assessment: There are agencies assess the types of skills that a client may be looking for. For instance, they will assess forklift drivers to determine their skill levels before you hire them. There are also agencies that provide skilled drivers that have been assessed and/or trained by them. Agencies will also assess speed and accuracy of data input or typing. For skilled labour, licenses and experience most agencies will conduct reference checks before they are sent to a client. Professional placement requires experienced recruiters to assess their competencies and filter out those that do not match the clients’ requirements prior to presenting them to the client.
Training and Upgrading: Some agencies also provide additionaltraining or upgrading of skills. A quick check with your agency will tell you which agencies specialize in the type of skills your looking to upgrade.
Payroll and benefits administration: Almost all agencies are familiar with and are already performing payroll and benefits administration. If you have a need to have some of this work outsourced, contact your agency and see if they offer this service. If they don’t, we would be happy to discuss your needs and come up with a solution unique to your requirements.
So now that you have a sense of why companies use temporary workers, let’s understand why job seekers look specifically to staffing or recruitment agencies for work.
Starting in the workforce: There are many first-time job seekers that may not know what is available and if it is something they wish to do. For instance, coming out of school, the job seeker may have little experience in knowing what sorts of industries and services are available to the job seeker. An agency has a variety of companies that they work with, whether in manufacturing, retail or service industry, they can suggest work environments to familiarize the worker with what is out there and what employers’ expectation is. Some may even work with you to determine what suits you the most.
Bridging to a permanent job: If the job seeker likes what they are doing, and the employer has a need to fill the position full time, the employee might be in a good position to be considered, since they are already there and the employer has some familiarity with the worker. The job seeker may be in on the ground floor, so-to-speak, as the employer will not need to go through an expensive recruitment process and the job may not even be posted so that you would have exclusive access to the position.
Access expert support: The job seeker will be able to attain the most attractive offer, including benefits and perks through the sage advice of the recruiter. They will have familiarity with the position they are recruiting for and able to assess whether you would be a good fit and if the position is in line with what you are looking for.
Enhance skills: Let’s say you are a machine operator that has operated machines for a bakery and you now wish to broaden your horizons a bit. Since very few companies operate the same equipment, (unless they are producing similar products), a person with a mechanical aptitude may easily be trained to operate other machinery. Employers will have to provide training for that equipment, so you have an opportunity to enhance your skills as a machine operator.
As an industrial mechanic, you may be able to work on a variety of machinery, increasing skills to the point where any piece of equipment can be easily fixed because you have learned the skill of problem-solving.
Transition to a new career: Let’s say that you suddenly lose your job and in need to transitioning into another. Agencies could have you articulate your experience into the form of a resume. They may also suggest an entirely different career based on your likes and dislikes of your previous job. They can also help you manage the emotional side of transitioning. It is always hard to start looking for work after you have been in the same company for any length of time. After the initial shock of being out of work subsides, you may even feel optimistic about landing a new career. Agencies can help with that, may also be able to help you manage the depression you might be experiencing if you do not land a new position in the timeframe you had hoped.
Agencies are also good at, is using their network of companies to search for work within your experience. Since they have access to far more companies and jobs than you do, they can do the leg work for you, thus freeing up your time to enhancing your own knowledge and skills.
Gain Canadian experience: Many foreigners have great credentials but can’t be hired because they lack Canadian experience. Agencies can put them into positions where they can gain experience. If they are a doctor coming from a different country, then perhaps they can be placed into a hospital setting doing other work until they can gain their accreditation. The worry with managerial positions is that their culture has a different way of addressing employee performance than in North America. Lending them out through an agency allows the potential employer to assess and evaluate the individual’s people skills. For instance, a senior manager may start off as a supervisor, so that companies get a better sense of how their candidate interacts with people and at the same time, the candidate can assess corporate culture in Canada.
Support other pursuits: Perhaps there are job seekers that are looking to add additional income by picking up a few extra hours or a single mother that needs to work while their child in school. Others still may have a hobby or starting a new business and need additional money to support their endeavors. Because employers also have a range of needs and shifts, an agency is better suited to place a job seeker into a position that meets everyone’s requirements.
Ease into retirement: So, you have announced to the world that you are retiring. The company has a nice going away party and depending on your financial situation you may decide to travel for a bit. Then again, you may need more money than what your pension will provide to do those things you always wanted to do. In either case, you may wish to return to work, but not the 40 to 50 hours that you had been working. Perhaps you are looking for something in the 15 to 20 hours per week range or one or two days per week. A good staffing agency can accommodate your desire to work limited hours.
Statistics Canada points out that the recruitment industry is responsible for 13.6 percent of Canada’s workforce. That represents roughly 2 million temporary workers.
Besides manufacturing, the industry also supports a variety of other jobs, including Sales & Business Development, IT, Engineering; various administrative and support functions including Human Resources, Finance, and Accounting positions. Other professional and managerial positions are also part of what agencies provide staffing solutions for, rounding out with healthcare; and industrial services.
The employment industry had operating revenues of $14.5 billion in 2017, an increase of 6.8% over the previous year. Some of that may be attributed to wage increases in Alberta (5%), Ontario (1.8%) and Quebec (4.7%). The information is provided by Quebec, Alberta, and Ontario, including the Retail Council of Canada.
51.0% of the revenue from sales of goods and services was generated by temporary staffing services while permanent placements and contract staffing services accounted for 39.6% of revenue. Canadian businesses, accounting for 87.2% of total sales.
Operating expenses rose 6.1% to $13.9 billion in 2017, attributed to:
- Salaries, wages, commissions, and benefits (59.0%)
- Subcontracts (28.6%)
Again, a portion of these expenses can be attributed to increases in wages during that year. The countries wages increased by 6% overall that year.
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