Just because you’re a perm-only agency, you shouldn’t turn down contract business. In general terms, recruitment placements can be broken down into permanent placements and contract/temporary placements with some agencies specialising in providing one or the other to their clients. This can sometimes be dictated by the industry the agency are working in, the clients they are dealing with or the previous experience/training of the agency owner.
However, there are times when a client who normally requires permanent staff members, may require a contract worker for a limited time and will ask the agency if they can fill the role. This can sometimes leave the agency with a conundrum as to whether they should take on the role due to their lack of experience running contractors.
ADVANTAGES TO PERM-ONLY AGENCIES FILLING CONTRACT PLACEMENTS
- IMPROVES CLIENT RELATIONSHIPS
Recruitment agencies willing to offer the ability to be able to fill permanent and contract placements will often have a much better relationship with their clients and can open more doors to future possible placements. Once there are contractors on site working via the agency, they can be the eyes and ears for the agency on new projects occurring or new hiring managers on site.
- PROVIDES INCOME EVERY MONTH
Whereas a permanent placement will deliver a lump sum fee once the candidate is on-site, a contract placement will generate income every day the candidate works. Most contract placements will also be renewed at least twice which can often mean the profit generated is significantly higher than an equivalent permanent placement.
- DO NOT LOSE DEALS TO OTHER RECRUITMENT AGENCIES
If an agency says no to a client offering a contract placement, the client will have no alternative but to look to other agencies who can fill the role. this could lead to the other agency not only filling the contract roles but the permanent roles currently being offered.
- FUNDING IS EASILY ACCESSIBLE
HOW TO SECURE AN INVOICE FINANCE ARRANGEMENT FOR A NEW RECRUITMENT AGENCYThere are many ways of funding contract or temporary placements using either pay-and-bill solutions or invoice finance facilities. These are available to new start-up recruitment agencies or agencies just starting their journey into contract and sometimes include the back-office processes to manage the timesheet, invoicing and payment side of the placement.
- INCREASE COMPANY VALUE AND MULTIPLE
If a recruitment agency provides contract or temporary placements then when they look to sell their agency, the multiple used to calculate their company value could be more than double compared to owning a permanent only recruitment agency. This is due to the buyer potentially inheriting contract deals which will continue beyond the date of sale instead of based on when the last permanent placement was made.
MAYACHI Ltd works with permanent only recruitment agencies who have been offered contract/temporary placements by their clients. We’ve helped and advised on how to facilitate these placements regarding contracts, timesheets, invoicing, funding and compliance to ensure that these placements are fulfilled for the client and profitable for the agency. In most cases, this has led the agency to consider running a contract desk and increase their profitability and company value!
Is it time you reconsidered those contract placements? Book your free consultation call to discuss!
