Right now, the coronavirus is redefining what business as usual looks like for companies across virtually every industry and vertical. Many companies throughout the U.S. are adjusting to the new need to support remote working capabilities that keep staff and clients safe, all while attempting to hit pending deliverables and deadlines. As a result, many enterprises are assessing their current operations to determine if they should cut costs or bring on additional resources to keep the momentum moving forward.
How Utilizing Employer of Record Services Can Change the Game for Staffing Firms
Staffing firms best positioned to adjust for unexpected disruptions can continue to successfully support their clients’ rapidly evolving hiring needs. Today’s recruiting firms must reevaluate their current operations to ensure they are running as effectively and efficiently as possible, which often requires delegating peripheral responsibilities. For many small- to mid-sized agencies, this can mean partnering with an Employer of Record (EOR) services provider.
An EOR partner serves as an employer for tax purposes, assuming a wide range of traditional employment tasks, obligations, and liabilities. During these challenging times, utilizing Employer of Record services changes the game for staffing agencies in several essential ways:
Lower Internal Costs
Staying focused on unnecessary expenses is always an essential practice for recruiting firms. However, trimming costs during a downward market can play a critical role in helping an agency stay afloat. Now is the time to reassess essential vs. non-essential employees to your operations. Reducing your own internal staff and outsourcing vital functions, such as onboarding, payroll, background checks, and invoicing can increase savings as well as protect your working capital.
Time Savings
Right now, recruiters must dedicate their time and energy to functions that will support clients who are scrambling to keep up with a changing office environment and potentially new remote workforce. An Employer of Record (EOR) partner can instantly help free up valuable bandwidth for staffing agencies. Your chosen provider will manage a full suite of back-office related tasks, affording you and your sales team the time needed to stay focused on sourcing talent and building up a contingent workforce network.
Payroll Burden
The fluctuating economy can wreak havoc on payroll processing for contractors. As a result, many staffing firms that were managing payroll internally, or through the use of traditional lenders, are outsourcing their payroll needs to an established Employer of Record services company. A third-party payroll company accelerates the entire process, delivering a vital layer of infrastructure to your firm that manages unexpected hiccups and ensures your workers continue to get paid on time. Additionally, an experienced EOR will also offer digital tools and resources to help you quickly calculate effective pricing strategies that protect profit margins and reduce overall risk for your organization.
Compliance Management
Most recruiting firms owners don’t have the time or motivation to keep up with the latest human resource, data intelligence, and tax compliance mandates—an Employer of Record service means they don’t have to. An EOR provider manages all necessary compliance needs, allowing staffing firms to avoid financial penalties and sanctions that stem from potentially non-compliant practices.
Download Headcount Management’s free Gross Profit MarkUp Calculator to help your staffing firm develop effective pricing strategies in today’s fluctuating economy.
