The traditional staffing business model doesn’t work in today’s world and is no longer feasible. Staffing companies do plenty of hard work sourcing, screening, testing and evaluating talent for roles that are transient or contingent and difficult to fill. But they don’t actually make any money doing all of that recruiting. Rather, their profits are tied to hiring candidates. A client pays an hourly bill rate, and there’s a markup based on the talent’s hourly pay that’s supposed to cover taxes, benefits, overhead costs, profit, etc. And since the bill rate doesn’t change based on whether the workers are on an assignment for four hours or for four years, the notion that a client actually pays for recruiting is just not the case at all.
Most staffing companies like the way that they do business, and in the process, have continued to treat their workforces as commodities. Many times, they don’t engage, nurture or develop their talent, nor do they offer high-quality medical insurance, paid sick leave or other benefits because the model itself just doesn’t allow for it. This industry, which I’ve been a part of for many years, has it all backwards and it’s time for a change. What I’m suggesting is that we start separating recruitment from employment and restructure our service and pricing models, as well as client agreements, so that we can actually invest in workers who are essential to our economy.
What staffing companies do is extremely valuable. There’s a massive workforce that relies on these companies to feed their families, and they need to be treated as such. The stigma and commoditization of temps vs. permanent employees needs to be erased. People who are on temporary assignments in the fast-growing gig economy fill an important need. It’s time to help level the playing field and erase the demarcation between temp and permanent, part-time and full-time, exempt and non-exempt. They’re all human beings who deserve to have reasonable pay and benefits, and have their voices heard across the American labor pool.
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