On this episode of CFO Weekly, we’re talking all about the pros and cons of using a staffing firm. Everybody seems to have an opinion on staffing firms, but at the same time, most companies in America have employed the use of a staffing firm at some point in their history.
Why? What are the benefits of working with a staffing firm? Why is it a good idea, especially for small to midsize companies? And what are the challenges that come along with a staffing agency?
This episode features Steve Casey, the Sr. Director of Business Development at Personiv. Steve spent over 25 years of his career working in talent acquisition spaces, so he brings an extreme amount of knowledge and experience to this conversation.
The Benefits of Using a Staffing Firm
There are a number of benefits to using a staffing firm, and obviously, they’re going to vary based on a number of factors, including your location, the size of your company, and the specialty of the roles that you are looking to fill.
We’ll focus on the benefits of using a staffing agency to help fill jobs in the accounting field.
The Cost-Effectiveness of Staffing Firms
While it might seem counterintuitive to pay an agency to help find a position for your company, the numbers tell a different story. On average, when you think of filling one experienced position within a company, you can assume that the cost to fill that position, meaning the internal costs, equates to roughly 13–14% of the employee salary and burden.
Meaning that if you’re looking to fill a controller position at $120,000, you can expect your internal costs to fill that role to come to somewhere near $17,000. And that is just to fill the position, that is not including turnover costs. When taking into account turnover costs, that same controller position would end up costing in the neighborhood of $52,000 to fill.
When you compare that with the roughly 7% of salary that a RPO (Recruitment Process Outsourcing) firm would charge, suddenly the idea of filling that role on your own seems less than ideal.
Why Accounting-Specific Staffing Firms
Often, you hire a staffing agency because they specialize in a certain type of position. Maybe they’re focused on auditors, or IT services or accounting. The point is that these agencies are usually highly-focused on a specific field, and have an immense field of candidates to pull from.
“A good talent acquisition firm will always have a pre-existing community of talent built up, to specifically serve their clients’ needs," Casey said.
These agencies should be able to get the right jobs filled by the right candidates rather quickly, and they’re always trying to maintain those candidate communities so that they can be there for their clients.
The Benefit of Staffing Firm Expertise
A company with 200 employees on their payroll may only have four or five people in accounting. And if the turnover in accounting is one or two people per year, the odds are that the company isn’t highly skilled at recruiting accounting professionals. They’re more experienced in finding jobs where the most volume of positions exist.
This is where a staffing agency comes into play, because they’re cost-effective, they have a specialized community, and they have the experience and expertise to recruit those specific positions.
“The real sweet spot for search and staffing firms are the midsized companies down to the smaller companies, because they just don’t have the resources to execute when it comes to any kind of volume," Casey said.
The Challenges of Using a Staffing Firm
This isn’t to say that working with a staffing agency will never present you with any headaches or cause any confusion or problems. Staffing agencies are just as prone to struggles as anyone else in the industry, and there are a few challenges you may encounter.
A Dwindling Accounting Talent Pool
While agencies are good at keeping a talented pool of professionals, the truth is that accounting professionals in the U.S. are in high demand, and the supply just isn't keeping up with the demand.
There are a number of contributing factors to this, from millennial career changes to a decrease in the desire for a career in accounting. But, the bottom line is staffing agencies are facing challenges in recruiting and retaining a deep talent pool, specifically in the accounting world.
The Importance of Company Culture
No matter how good your staffing agency is, if you don’t have a handle on your own company culture, your agency is going to have a hard time getting you the candidates that you need. Because your reputation will precede you when it comes to culture and attracting talent.
“The way to win in using a talent acquisition firm, is to be good yourselves with your brand, your reputation, and how well you on-board," Casey said.
So, make sure that you know and can communicate your brand, make sure your reputation is stellar, and make sure that you on-board employees well. Those three ingredients will go a long way in helping a staffing agency to get you the talent that you need.
Virtual Accounting Talent - The Staffing Alternative
One lesser-known alternative to the staffing solution is virtual accounting talent with an offshore model. Unlike traditional "outsourcing" models, this new approach allows financial leaders to leave the hiring, training and day-to-day management of transactional accounting talent (like AP Specialists, AR Clerks and the like) to a third-party provider.
The main benefits of virtual accounting talent are cost savings and efficiency. The client provides the direction, and the provider manages the execution and day-to-day. This approach allows clients to focus on their core competencies. The virtual accounting solution enables you to implement and scale the same process across your entire portfolio while maintaining quality control.