Mid-size staffing firms (under $200m in revenue) globally are facing challenges when it comes to driving growth from hiring and onboarding processes. When dedicating resources towards expanding into new markets and product areas, limitations arise that prevent companies in this space from making the substantial progress they need.
Alongside insufficient resources, a lack of specific expertise around industry-specific subject areas, and regulations new to the organization that need to be complied with, can bring scaling of operations to a halt. Additionally, the regionalized nature of many staffing firms means that the infrastructure simply isn’t there to overcome geographical boundaries.
However, there are steps that can be taken in order to raise those growth ceilings, for future prosperity and innovation. Investing in an Employee of Record (EOR) and Agent of Record (AOR) provider can go a long way in closing those knowledge gaps, as well as bolstering resource management capabilities.
Overcoming geographical restrictions
For staffing firms, it is common to have clients in all 50 US states, and beyond US borders, even if the headquarters only cover a tri-state area. Businesses working with these staffing companies will also hire beyond their main office area in order to diversify skill sets, especially when continuing remote working policies. But staffing firms can find that they are not properly set up in the areas they want to expand into.
Regionalized staffing firms often run into a lack of present infrastructure for expanding their geographical scope and service footprint. There is also the pending risk of falling foul of data and workforce regulations that are specific to firms operating in a certain state.
By partnering with an EOR/AOR provider like People 2.0, staffing firms are properly set up in the new region they were looking to start operating in, from day one. Full and up-to-date guidance around labour laws provide peace of mind, and any possible delays in service can be mitigated. Through such a partnership, you can provide full coverage of the geographical hiring targets being overseen by clients.
Personalizing resource management
Another big challenge being faced by mid-size staffing firms when competing with larger competitors is insufficient capital and resources when it comes to expanding into new sectors. The back office often lacks the overall administrative and operational protocol knowledge required to fill clients’ particular hiring needs. Meanwhile, struggles remain with costs staying high, while income frequently fluctuates.
Additionally, as with geographical expansion, particular expertise in the new area is needed for any new industry, as well. But a lack of knowledge around onboarding and skill set requirements in the sector, as well as specific workforce regulations for industries like healthcare, is a common issue.
EOR and AOR solutions like those from People 2.0 offer an enterprise-level back office suite that takes strain off the shoulders of staffing firm personnel, by taking on the capital restrictions tied to resourcing.
Seamless invoicing and unlimited funding capabilities can also be leveraged, allowing for 100% focus on growing the firm. By using EOR and AOR capabilities, staffing firms are able to transition from a fixed P&L cost structure, to a more intuitive, variable cost structure that rises and dips depending on the market situation.
Alongside this, any present knowledge gaps around industry-specific onboarding and regulatory compliance can be closed by partnering with an EOR and AOR provider.
Healthcare: a sector-specific example
Due to being highly regulated and the large proportion of contingent workers that aren’t full-time, the healthcare sector is a particularly challenging realm for staffing firms, especially when they are unfamiliar with that space.
There is a particular nuance when it comes to workforce regulation that can be missed if it is uncharted territory.
A corporation working with a staffing firm may, and have wanted to pivot towards healthcare operations, and shift their hiring strategy accordingly. But certain licences for clerical roles, including IT staff in the sector, are required in order for new talent to be properly onboarded.
Since the COVID pandemic, companies like People 2.0 have helped staffing firms that were not yet set up in the healthcare industry, to seamlessly grow into the space and thrive at closing skills gaps. In this case, we quickly build a healthcare-specific program that guides the firm on a sustainable growth journey, allowing for capabilities in that industry to become a prominent part of their service portfolio. From here, long-term growth goals can be realised.
No more compromises
Indeed, partnering with an EOR and AOR provider equips staffing firms in the mid-size range with key knowledge required around geographical and industrial expansion, as well as the legislative obligations involved. By getting set up for growth into new capability areas from day one, you can avoid that 12-month ramp and decrease strain on the back office when it comes to invoicing, payroll, onboarding and compliance.
When it comes to achieving growth, it is vital that staffing firms are always ready to expand in line with the needs of clients.
By having an EOR and AOR solution and expert guidance in place, full knowledge can be put towards immediate readiness, while keeping resourcing, capital and infrastructure limitations at bay.
