Reasons Staffing Agencies Fail (And How to Prevent Them)

25. May 2020 Tempest Team

Reasons Staffing Agencies Fail (And How to Prevent Them)

We’ve talked much about the keys to success in the staffing industry. They’re varied and manifold, but ultimately attainable to anyone who puts in the time and effort. In other words, they’re something that can easily identified and worked for.

The factors that can contribute to the failure of a staffing firm, however, are a different sort of beast. They’re beyond varied and manifold – they’re virtually infinite. Yet, they still require identification, as much as an uphill battle that might seem. And they must be fought against. 

Fight for success in the staffing industry typically requires following simple, tried, tested and true formulas or methods. Fight against the forces that could lead to failure – well, that requires some nonlinear thinking and a healthy dose of foresight.

To get you started, let’s look at some reasons staffing agencies fail, and some ideas for preventing them.

A shrinking labour pool and shortage of temporary workers

Sometimes this can be out of your control. Perhaps new regulations have come into place, thereby put legal roadblocks up to profitably hiring temps or preventing new temps from entering the market. Perhaps a skill shortage is sucking up all available labour. 

The best countermeasure here isn’t actually a countermeasure. It’s something you should be doing from the very beginning: building and maintaining a pipeline. Using your current temp workers to aid you in this by incentivising them doing the recruitment on your behalf through a paid referral programme is one way of establishing this pipeline. 

An undifferentiated brand

In the digital age, a brand without a recognisable image is a brand that will be consigned to the waste bin of staffing history. 

It’s vital to make sure your brand has a strong identity, a robust presence on the internet and social media AND caters to a specific, defined niche in which it has (or can) distinguished itself as an expert. 

Payroll hassle and time sheet chaos

Getting an employee to hand in timesheets and while keeping track of each one yourself for payroll purposes can be time-consuming and a headache best. At worst, it can lead to chaos and a breakdown in a firm. Using staffing and scheduling apps can eliminate the need for such antiquated forms of paywork by tracking and calculating everything for you (and the employee).

An unstable base of clients

If there were truly one factor that could lead to the failure of a staffing firm, it’d boil down to an unstable base of clients. After all, that’s where we get paid. And success or failure is all about money, isn’t it?

That’s why, in order to avoid failure, you must not only 1.) retain your current clients but also 2.) make sure your client base grows with time.

You should be reaching out to your current clients on a regular basis, meeting with them personally and checking up over the phone. Discuss the current situation as well as forecasting trends in the market and industry. Show them you care. This is the key to keeping them happy and loyal and accomplishing goal 1.

At the same time, to accomplish goal 2, implement a client referral system in order to make sure your base continues to expand at a sustainable rate.

Temp worker inconsistency 

No-shows and cancellations can do serious harm to our reputation, thereby putting our contracts with our clients in jeopardy as well as hampering our effort to attract new clients. 

Again, staffing and scheduling apps can help to eliminate this perennial problem, by allowing you to select the most dedicated, trustworthy workers who demonstrate the highest probability of showing up. And because it’s self-selecting, meaning the worker must actively agree to a shift and want it, this further reduces the risk of a no-show. Moreover, in the rare event of a cancellation, you easily procure the most conveniently located talent at a moment’s notice. 

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