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3 reasons why your recruitment agency should consider temporary placement & contracting

Now, more than ever, recruitment agencies are combining permanent and temporary placements in Australia – and across the world.

There are many reasons for this global industry trend, but mainly it’s about keeping your workforce flexible (See Why the Demand for a Contingent Workforce).

Most importantly, recruitment agencies are benefiting from flexible work hours and conditions, and the demand for short-term, high-skilled labour.

Using both permanent and temporary placements means offering clients a wider range of services – something which is highly regarded in today’s competitive marketplace. Plus, presenting a choice between a contractor and permanent placements can lead to winning more business and the opportunity to expand into new areas within your industry.

While for temp employees it’s about remaining relevant, boosting experience, growing a portfolio, expanding a skill set and enjoying greater flexibility, to name a few reasons why we’ve seen this growth in casual employment.

To further explain the benefits, here are our top three reasons why combining permanent and contract placements works.

Combining permanent and temporary placements smoothes out your cash flow

There’s no doubt permanent placements can mean a lumpy cash flow – you can often be left with a gap between the available cash at the beginning of your accounting period and what’s left at the end of the period. But, if you allow for temporary contracts as well as permanent placements, you are more likely to enjoy a consistent income stream. The difficulty with permanent recruitment is that if you stop recruiting, your profits can dry up. However, by making some contract placements as well, your agency continues to make a profit every day the contractor works. What’s more, often the contracts can extend or lead to new prospects, which helps maintain steady cash flow.

Building value into your business

You probably already know that because permanent placements are more transactional, they are not considered to be an income stream you can rely on. So, by adding temp placements, you can build value into your business if there are ongoing contracts and a continuing income. Plus, if you intend on selling your recruitment agency in the future, having contractors on the books can increase the company’s value compared to only having permanent placements.

Spreading your risk

With the global demand for workers trending to non-permanent it’s important to be exposed – and open to – this change to help make sure your company is heading in the right direction long-term. Finally, combining the different employment types help spread your risk by covering off varying economic and employment conditions.

Don’t be turned off by the thought of administration and funding requirements for managing an agency of both permanent and temporary contracts. APositive makes improving your cash flow and back office easy with payroll and invoice finance so that you can grow your business the way you want to. Call 1800 276 748 to find out more.

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