Temporary Staffing: Statistics
Temporary staffing agencies are a vital contributor to the U.S. economy, providing employment for roughly 15 million employees each year. The Bureau for Labor Statistics predicts that staffing will be the number one growth sector over the next ten years.
Currently, three percent of U.S. workers are employed by a staffing agency, and the vast majority views their employment relationship favorably. Most (76 percent) of temporary staffers work full-time, and half (49 percent) say taking a temporary position is a good way to secure a permanent job. Ninety percent of temporary workers say their work makes them more employable. One-third of temporary workers on assignment were offered a permanent job by their clients, and two-thirds of those accepted offers of permanent employment.
Effects of the Recession
During the most recent recession, businesses relied heavily on temporary staffing firms to fill both low- and highly-skilled positions. Rather than risk adding permanent staff, companies balanced their financial obligations by laying off permanent workers, and hired qualified temporary staff in order to reduce overall employment costs.
Staffing agencies have made it a point to change with the economic times, adapting to meet the needs of the cautiously optimistic employers in a growing economy.
Businesses taking a “try-before-you-buy” approach to permanent hires report using temporary staffing agencies to assess the skills and fit of contract employees before making a decision to hire them full time, helping to minimize costly employee turnover. Using temporary workers also helps companies attracts employees seeking flexible or part-time work in harder to fill, vacant positions (i.e. in high-tech, hard-to-fill positions).
Temporary staffing employees work in the following sectors:
• 37% Industrial
• 28% Office-Clerical and Administrative
• 13% Professional-Managerial
• 13% Engineering, Information, and Technology, Scientific
• 9% Health Care
Financial Challenges of Being a Staffing Agency
Although the demand for temporary staffing agencies is high and shows no signs of decelerating, agencies often face hurdles when it comes to securing enough capital to operate efficiently. Regardless of the industries they serve, temporary employment firms require considerable resources to finance their operations. When they don’t have ready access to flexible lines of credit, the logistics of financing can slow down or even stop business altogether.
Unlike other vendors, temporary staffing firms don’t have the luxury of being even a day or two late on payroll (e.g. receivables). Their success and ultimately, their reputation depends on their ability to meet their funding obligations on time, every time.
Agencies that don’t meet payroll deadlines face serious penalties. They can be sued by workers, penalized by the US Department of Labor, or fined by the IRS. Any of those outcomes are not only costly, they can destroy a temporary staffing business.
To help avoid shortfalls, staffing agencies often turn to factors to cover expenses including: marketing, advertising, recruiting, healthcare and benefits, rent, operational costs, late fees, etc.
How Factors Can Help
Staffing agencies turn to factors for a reliable, steady source of capital to covers operational expenses. Factors are also an excellent match when staffing firms are ready to invest additional capital to grow their businesses. Traditional lenders often take weeks to process loan applications, and this simply isn’t a good fit for staffing agencies who need quick funding in order to cover payroll and meet operational expenses. The need to hire additional staff can happen quickly, and the factors that respond with a diverse set of lending solutions are in the best position to meet the needs of their staffing clients.
About Hitachi Business Finance
Hitachi Business Finance builds relationships based on mutual trust, helping clients find working capital solutions to meet their specific needs. We look forward to helping your company grow, giving you access to our full complement of financial solutions.
Hitachi Business Finance provides business cash flow solutions to support a company’s continued growth and success. A division of Hitachi Capital America Corp., we offer commercial and government A/R financing and lines of credit. Based in Rochester, Michigan, with an office in Atlanta, we provide easy and flexible financing to companies of all sizes across the United States. Learn more by visiting www.hitachibusinessfinance.com or calling (248) 658-1100.