5 Ways Contract Staffing Can Help Balance Your Desk

  By Debbie Fledderjohann  |    Tuesday May 31, 2017

Category: Contracting, Technology


During the past couple of years, the Stock Market has experienced dramatic ups and downs, often yo-yoing from one extreme to the other.

That might be an appropriate way to describe the typical recruiting desk. You just don’t know what’s going to happen next. There will ups and downs for sure, but what should you do when there’s more downs than ups?

In the financial world, experts recommend that those investing in the Stock Market have a balanced portfolio of both stocks and bonds. With such an approach, investors don’t have “all their eggs in the same basket,” so to speak, and they minimize their risk. What risk would that be? The risk that the Stock Market will eventually go down and usher in a new recession.

Let’s face it: recessions happen from time to time. Anybody who’s been in the recruiting profession for any length of time has endured at least one recession, and battle-tested veterans of the industry have persevered through many more than that.

In the same fashion that a balanced investment portfolio of both stocks and bonds can minimize risk, running a balanced recruiting desk with both direct-hire and contract staffing services can also minimize risk. Why is that?

Because during recessionary times, companies are less likely to hire employees on a direct hire basis. Instead, they choose to utilize contractors to help complete projects and meet deadlines. As a result, a recruiting firm that offers just direct hire services will suffer much more than a firm that offers both direct hire and contract staffing. 

Just like people who only invest in stocks suffer much more when the Stock Market drops than those who have a more balanced portfolio.

Is there a recession on the way? While it’s almost impossible to predict when a recession will strike, history suggests that one is inevitable. In fact, recent market cycles suggest that a recession hits roughly every seven to eight years. (Which means . . . maybe we’re overdue?) 

The most recent recession—dubbed “The Great Recession” due to its severity—began in 2008, nine years ago. Based on this fact alone, it could easily be argued that another recession could begin as early as this year or next year. How prepared are YOU for a recession? How prepared are you for a recession at least as severe as the most recent one?

These aren’t pleasant questions to consider, but they’re necessary questions for any business owner and any recruiting firm owner to consider. Those firm owners who are proactive about preparing for an economic slowdown will be in a much better position to deal with such a situation, and contract staffing can play a pivotal role.

In fact, there are five main ways that contract staffing helps balance your recruiting desk during a recession:


#1—Off-set the loss of direct hire business.

As mentioned above, direct hire placements typically take a dive during a recession. However, contract assignments often increase due to the fact that companies still need to get work done. If you offer contract staffing, your contract income gives you enough to at least cover your overhead. You can even make up lost direct hire placement income by taking on more contract placements. Over the years, countless recruiters have told us that contract staffing kept them in business during recessionary times.


#2—Make placements even with a hiring freeze.

Just because a client has instituted a hiring freeze, that doesn’t mean you can’t still make placements with that client. Once again, as mentioned above, companies still have deadlines to meet and projects to complete. If there’s a hiring freeze, how are they going to do that? They’ll do that by hiring contractors for a specified amount of time because traditional contractors come out of a different budget that direct hire employees.


#3—Close more deals by offering contract-to-direct candidates.

In some instances, a company might be hesitant about bringing a candidate on board on a full-time basis. Perhaps they’re not 100% sold on the candidate. Maybe due to budgetary constraints, they absolutely want to make sure that this candidate is the one they want. Whatever the case, offering to place candidates on a contract-to-direct basis could be the answer your clients are seeking.

This will give the client the opportunity to “try before they buy.” In this type of deal, you’ll earn hourly income during the contract period. Then, if the client decides to hire the contractor on a full-time basis, you can also earn a conversion fee. More companies are choosing this option because if the contractor isn’t a fit, they can simply end the assignment.


#4—Make contract placements with the same client base.

The good news is that you do NOT have to market your contract staffing services to an entirely new client base. That’s because you can just use your existing client base (even if they’ve instituted a hiring freeze)! The only thing you really have to do is let your clients know that you can place contractors. Since you already have a relationship with them, it will increase the chances that they’ll also turn to you for their contract staffing needs.


#5—Build more cash flow consistency and flexibility into your desk.

Have you considered the advantages of more cash flow consistency and flexibility on your desk right now? How much more could you use them during a recession? Not only can you make a substantial amount of money by adding contracting to your business model, but you can also earn it in a steady fashion. You continue to earn money each hour that your contractors are working, and since most clients pay invoices on a weekly basis, you’ll be able to enjoy weekly cash flow.

Believe it or not, we’re nearly halfway through 2017. Have you been proactive about preparing for whatever uncertainly might lie ahead? What would you do if direct hire job orders started to dry up? Are you in a position to offer contract staffing to your base of clients? If not, what steps do you need to take?

One day in the near future, a recession will be here. It’s an economic and historical certainty. Don’t get caught flat-footed. Reduce risk and vulnerability by building a fully balanced recruiting desk with both direct hire and contract staffing.


Contract staffing helps recruiters balance their desks . . . and it could help YOU, too.


And Top Echelon Contracting just recently rolled out a new back office service called TEC Express. This new Express model is designed for contractors who are “office professionals” and would qualify for the Workers Compensation Code 8810 (or equivalent).

The good news is that since the Express model is targeting only office professionals, Top Echelon Contracting can pass more profit along to the recruiter!

To find out more about how TEC Express can help you, call (330) 454-3508 and press “1” to speak with a contracting specialist.

 Founded in 1988 in Canton, Ohio, Top Echelon’s mission statement is to “help recruiters make more placements by continuously exceeding expectations.” Top Echelon started solely as a split placement network, but it has expanded over the years, growing with its customers and creating new products and services to meet the needs of those customers. Top Echelon helps recruiters make more placements through its three main products and services: Top Echelon Network, the leading split network of recruiters; Big Biller recruitment software for applicant tracking; and Top Echelon Contracting, the recruiter’s back-office solution. Visit www.topechelon.com to get started today!

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