There are more than 1.5 million temporary workers in the UK, which makes up around 5.7 per cent of the country’s working population, according to the latest figures from the Office of National Statistics.
Although the number and proportion of temps around the country has varied little over the past decade or so, they are arguably more important now than they have ever been – and this is particularly the case among small and medium-sized businesses (SMBs).
So why is temporary recruitment so important to SMBs? Firstly, as Brexit approaches, the UK economy is potentially heading towards its biggest period of instability since the last recession. And second, a shrinking world driven by online technology means that competition – both in the UK and across the globe – continues to increase.
An uncertain economic environment means that companies need to be able to react rapidly to changing circumstances. If recession does bite, they need to be able to release staff as quickly as possible or take on more people to make the most of an upturn.
Temporary staff can provide this flexibility. Increasing competition, meanwhile, makes it vital for SMBs to respond swiftly to changes in customer demand to gain market share. Again, temporary staff can help to bring the agility to achieve this in the short term.
But hiring isn’t always that straightforward. TempRocket founder, Andrew Johnston, takes a look at issues that small businesses face and the rise of online recruitment.
The problem that smaller businesses have
The current temporary staff environment doesn’t make life particularly easy for SMBs. Although they probably don’t realise it, many are suffering financially when it comes to recruiting temporary staff through agencies when compared to larger enterprises.
This is because they get stung by bigger agency margins due to the fact that they don’t have the volume requirement of bigger businesses, resulting in less negotiating power. If you’re booking ten temps a year compared to ten temps a week, for example, it’s unlikely that you’re going to get as good a deal. This gives larger companies an immediate financial advantage over their smaller counterparts.
Another key factor is that the current set-up of the temporary recruitment sector makes it difficult for companies to find the right temps quickly and easily, particularly those firms like SMBs that don’t tend to use temporary staff that frequently, so lack experience in terms of knowing where to look. And as mentioned previously, temporary staff requirements usually tend to be quite urgent, either for quick expansion or to replace key personnel.
The problem is that the model is broken, with few ways for hirers to connect directly with contractors. This makes it difficult to avoid using a temp agency.
It isn’t wrong that many temporary recruitment agencies do not hold relationships with smaller companies within their geographic locations, it’s simply not within their required focus.
This dilemma often means SMBs register with several which can take a lot of time and effort – something most small businesses simply can’t afford.
So, as an SMB requiring a temporary staff member, the approach is very much about educating all the agencies you choose to call in terms of what you need, what you do and, more importantly, understanding your available budget.
After all, the consultant will be targeted on margin, which means that price is key to them – and in some cases, more so than the actual temp’s ability to carry out the work required.
The introduction of online temporary recruitment platforms has made things easier, bringing hirers, contractors and agencies together in one place.
SMBs can search for the type of contractor they need from a UK or even global database, or they can just search agencies if they prefer to go down that route. What’s more, some platforms offer an online bidding system, which means SMBs will get the best possible agency rate, reducing the chance of them being penalised because of their size.
Small businesses get to search personnel and rates prior to selecting an agency. This puts the onus on the agencies using the platform to make sure they have all of their temporary candidates listed for the hirer to find and book, ideally via a bid process, to ensure that not only are SMB budgets met, but also the right person is found to carry out the work.
Just bear in mind that you lose the personal touch with online platforms so if you want your temp agency to work face-to-face with candidates, it might be worth going with a traditional firm.
Nicola Millington, owner of FP Comms, says that she prefers to hire locally, but using online temporary recruitment firms helps to meet some of her company’s unique requirements.
One of the issues in growing an agency and bootstrapping your business is that sometimes you need to test the waters when it comes to increasing capacity and building your team.
There are times as a business owner you feel ready to expand; however, money, fear or uncertainty can often stop you taking those next steps. There are a number of online platforms we use to help find amazing resources and people to work with.
However, we do hold ourselves to a high standard and ensure that even if the staff is temporary, we pay them at the same rate of pay that we would to employ a full-time member of staff. I believe this is good practice as it helps you to see if your business can sustain that growth as well as the quality of the people you will attract and most importantly, provides you with a discipline.
There are no shortcuts when it comes to growing a successful business, so for us the value of people and fair pay is so important. Although we prefer to work with local talent, the benefits of using online resources is that you can source talent from across the globe.
We sometimes need specialists
We offer a service in PR which means that we are sometimes tackling obscure and unique stories. This means that you have to source a specific person for a unique position which is not a long-term role.
Small and growing businesses need the support of agencies like ours to support their transition and evolution. This means, that as an agency, we often have to take on the burden of long-term subscriptions for recruitment and specialist sites and divide the cost accordingly to our clients.