If you're thinking of using an accounting staffing firm – or any recruitment agency that promises to find you qualified accounting talent – chances are high that you aren't going with "plan A". A lot of time and words have been spent dissecting what the finance talent market looks like today and how to best operate within them.
The news isn't always good. Accounting and bookkeeping talent is in short supply, from entry level AP Clerks all the way up to CPAs and the C-suite. If you've decided to outsource some or all of your recruitment process, that decision is likely one that you didn't take lightly. You need to get competitive to stay in the game, and staffing agencies promise to help get you there.
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The problem? There are lots of places an organization can fall on the staffing firm and hiring agency spectrum, and some are much better than others. All of them, unfortunately, have a set of drawbacks in common that talent-strapped teams need to be on the lookout for.
You Could Be Up Against a Staffing Agency's Poor Recruitment Process
There are lots of reasons to move the hiring process outside of your organization, like closing talent gaps quickly with qualified individuals. There are just as many ways to get the job done, so you've decided to let a staffing firm be the middleman between you and your potential new hires.
Would it surprise you to learn that they may be using a middleman of their own?
It's increasingly becoming common practice to hire a third-party subcontractor both stateside and abroad to recruit the talent that will one day arrive at your office. Not all of the ways they do it will endear potential hires to them or to you, unfortunately.
In recent years there's been quite a rush to automate nearly every aspect of nearly every process and hiring certainly hasn't been immune. From super-shady practices like data scraping websites where finance professionals congregate online (and then shaking out the digital breadcrumbs that lead back to individuals' LinkedIn or Facebook pages) to the much-loathed practice of recruitment-spamming anyone with the right keywords in their CVs, there's a lot to dislike.
If you've ever sourced even a temporary hire for any position, you know that there are a few key steps in the process that will help get you the right person for the job and increase your chances of that new hire "sticking the landing" when they finally get to your door. Those steps might just include:
Matching role requirements to an individual's skillset
Making sure job-seekers' salary expectations and your budget for payroll costs are compatible
Ensuring that the employee experience is aligned with your brand and team culture
Making sure that the potential hire can work when you need them to
Having an effective onboarding and support structure to increase the probability of retention
The list goes well beyond the five listed above, but you probably get the picture. It's likely that you're using an accounting staffing firm to take over the hard work that goes into an effective hiring process, because you don't have the time or resources to do it yourself, not because you want to forego it completely.
The bottom line is that a staffing agency is competing for the same talent you are. It will be well worth your time to make sure that they're not cutting corners to do it. The dilemma, of course is that if there's one thing that's already tremendously clear for leaders working with agencies, it's that time is already in short supply.
Accounting Staffing Firm Could Result in Talent Not up to Your Company's Standards
The all-too-often unfortunate outcome of shoddy, shady or rushed recruitment processes is that the quality of talent you were hoping to procure by partnering with a staffing firm is that you might not actually be getting what you pay for.
Whether the costs associated with third-party staffing solutions is worth it is something we'll get into more in depth in just a moment. For now, it's sufficient to say that it comes with a price tag that some leaders aren't necessarily anticipating. That stings enough on its own, but what if what you're paying for is worse than what you could have procured yourself?
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It's not always the case, but there are definitely some ways in which you end up with a new hire fit that's less "like a glove" and more likely to be rough around the edges. It goes without saying that some of the sourcing practices above are unlikely to attract the kind of talent you're hoping too, but there are other, more nuanced ways that start to chafe.
For instance, many staffing firms will take over the cost of benefits that are generally rolled into what we consider the "employee burden". Sometimes, that cost is mitigated by simply classifying their own talent as contract. Either way, those hires come into your organization with a different designation than your own team does.
It can be demoralizing to go to work every day alongside folks that are afforded benefits and titles that you're not entitled to. Sometimes, there's enough employee engagement initiatives in place at the firm itself that using an accounting staffing firm doesn't necessarily have to lead to resentment between those hires and your own full-time employees. More often, there are none.
More: Retaining Accounting Talent: How To Make Your Team Stay
Even the most qualified professional doesn't operate "on all cylinders" when they don't feel invested in. Disengagement and low morale don't just lead to lower productivity, there are actual dollar costs associated with those outcomes, including the costs of starting all over again: if a disengaged employee heads off to greener pastures, you're back at square one.
Using an Accounting Staffing Firm Can Get Expensive – Fast
While we're on the topic of dollar costs, let's talk about one of the better-known drawbacks of using a staffing firm to meet your accounting and finance needs: the price tag.
There are no two ways around the fact that the costs of using a staffing solution – whether it's a staffing firm or recruitment process outsourcing provider – stack up fast. Most leaders already expect a slightly higher cost when they go with a staffing agency. That's because the price includes the employee's compensation and the "finder's fee" to the agency for taking the work of hiring off of your plate.
This isn't a one-time fee, of course, and it doesn't just include a flat price for sourcing hard-to-find accounting talent. Instead, it's a conglomeration of a few costs. The fee clients pay a staffing agency will include the base pay, employee burden and taxes associated with the role.
Then it gets more expensive: the overhead associated with the placement tends to be rolled into what's called an "overhead multiplier", which can range from 1.5 to 2.1 times the placement's base pay. Clients will pay that, too.
Finally, there's what's called the disengagement cost. If a staffing agency hasn't sufficiently invested in the employment experience, there's a real risk of employee disengagement. While it's impossible to include this cost as a line item on an invoice. It represents the loss of productivity that comes when the placement isn't sufficiently engaged, and it's been calculated as a whopping 34 percent of the employee's yearly salary.
All of these costs except disengagement are expressed by the agency as an hourly fee that will ultimately come out to up to fully double the placement's actual salary. Once you include the disengagement cost, you may find yourself paying nearly six figures a year for a mid-level accounts payable clerk.
One-Way Commitment When There's No Trial Period
When leaders think of the drawbacks of using an accounting staffing firm, it's helpful to think of it as a snowball effect – ultimately, it's a process that doesn't always invest in the person at the true center of it all: the talent you need them to find.
When it begins with a sourcing or recruitment process that isn't concerned with finding a good match but finding any match and continues on into a relationship that lacks sufficient engagement initiatives, it makes sense that it's likely to end with your placement looking for better opportunities elsewhere. Yes, you may get the seat filled. But will it stay that way?
When it doesn't, it would be reassuring to know that there's some kind of contingency plan in place. Some staffing firms offer pro-rated or refunded fees. Others guarantee a replacement to allay workplace interruptions. But many more don't.
The only way to know what kind of partner you have in a staffing agency would be to have a access their services on a short contract or trial run. Unfortunately, that's not an option with a staffing agency. Instead, you'll have to rely on reputation, referrals and reviews before you sign up for an expensive solution that may just be anything but.
Your Best Alternative To Using an Accounting Staffing Firm: Virtual Accounting Support
If you could hand over your talent sourcing and retention efforts to an organization that recruits the way you would if you were doing it yourself, invests heavily in the talent it finds with an eye toward the long term, and gave you a chance to run a pilot program before signing the final contract, would you do it?
That's not just a possibility. It's the reality of working with a reputable virtual accounting support provider. At Personiv, we've been working with clients for over 35 years to alleviate talent and hiring headaches. Some of those clients represent decades-long partnerships, evidence of how heavily we invest in the talent we work with.
We begin by tapping into global talent pools that are unconstrained by geographic locations or time zones. The highly qualified accounting professionals we recruit follow GAAP and even include CPAs with Big Four backgrounds. Then, we work hard to provide those team members with a best-in-class employee experience, including professional development opportunities. We take care of them so they can take excellent care of you.
Our teams are engaged, can save you 50-75 percent of your current accounting labor costs and start with a single full-time employee. You can hire for your current need and scale your solution as your business grows. We're transparent, too. You can start by using our interactive calculator to determine your actual costs with Personiv, and then get in touch with one of our experts to get started with a long-term solution for growth.