4 Benefits of Leveraging an Augmented Staffing Model

When it comes to establishing and maintaining a profitable business, business owners are responsible for making strategic decisions on a number of different fronts to minimize costs and amplify profits. From implementing more efficient workflows for increased output to reducing overhead costs and managing labor costs, successful companies are the ones consistently searching for cost-effective solutions that maximize ROI.

Among the many decisions business owners make to ensure their business is run successfully and profitably is whether or not to leverage an augmented staffing model. Take Google for example. Over the last few years, their contract workers have outnumbered direct employees. Why? Here’s a look at the benefits of building teams bolstered by staff augmentation.

The Financial Benefits of Using a Contract Staffing Model

Leveraging in-house resources for the recruiting and hiring process is incredibly costly. In 2019 alone, employers struggled to navigate the tight labor market, eagerly seeking innovative ways to attract candidates to the 7 million unfilled jobs across the U.S. Internal recruitment models are extremely costly due to direct advertising costs, time and resource allocation, the long-term implications of unforeseen turnover, ineffective hiring decisions, onboarding, and training requirements.

For many companies, recruitment initiatives fall into the hands of a small internal team or even a single employee. These individuals often have a comprehensive list of human resource-related responsibilities, requiring their time to be divided among many different tasks. In these scenarios, recruitment plans are often second priority to taking care of current staff HR needs. As a result, these time restraints can cause the hiring process to be less effective than desired.

Even for organizations with a larger recruitment team, there’s a distinct and negative impact associated with having unfilled seats. This includes:

Customer Impact – When there are vacancies in your staff, it not only creates a negative perception of your company among customers, vendors, and suppliers, but it also interrupts workflow and diminishes your employees’ ability to deliver the highest level of service possible to your clients.

Decreased Employee Morale - An understaffed organization means your current employees must do some heavy lifting in order to compensate for being understaffed. With the added workload, staff members will begin feeling overworked and burned out, leading to poor productivity, a higher degree of absences, and an increased turnover rate.

Inefficient Use of Manager Time – When there are openings on your team, it requires more time allocation from management to ensure workflow remains consistent and all projects are completed as scheduled. This time – on both the management and employee side - can be better utilized on high-value, revenue-generating activities rather than shouldering the burden of the extra workload.

Product/Service Development – An interruption in your production chain or development team can disrupt your speed to market and adversely affect revenue, new product launches, and customer retention.

Loss of Competitive Standing – Should your organization encounter multiple vacancies, it communicates to your competitors that your company is in a vulnerable position. Not only can they use this to their advantage by poaching employees and customers, but it poses the threat of disrupting mission critical business activities.

Calculating the Impact of Unfilled Seats

As with any business decision, there are lost opportunity costs associated with inaction. Here is a simple lost opportunity formula. Note that your specific business may have other factors to consider, however this is a solid basic formula and example:

ABC Company is a medical supply distributor with an annual revenue of $3 Billion. The organization currently employs 12,000 workers and has 140 open jobs. According to recent research provided by Workable, the average time to fill in the U.S. is 43 days. Inserting this data into the lost opportunity formula would result in the following:

  • Average Annual Revenue Generated per Employee = $3 Billion/12,000 employees = $250,000
  • Daily Revenue per Employee = $250,000/240 days = $1,041
  • Revenue Lost per Unfilled Job = $1,041 x 43 days = $44,791
  • Total Lost Opportunity Revenue for All Open Jobs = $44,791 x 140 =$6,270,833

By calculating this information, the subsequent data can be used the justify the importance of implementing a strong recruitment strategy.

Access to Expertise & Quality Talent Pool

Calling upon market-driven strategies, staff augmentation firms have the breadth of experience and expertise needed to support your internal human resources team. Professional staffing specialists are not only well-versed in employment trends and laws, but they have access to cutting-edge technology to implement innovative and strategic recruitment strategies.

For small to mid-cap businesses, it is extremely difficult to compete with the large corporations out there in terms of attracting talent and allocating budget towards advertising open positions. By partnering with a staffing firm, you will be able to effectively bridge that gap by leveraging the agency’s pre-vetted talent pool, reputation, and established brand equity. You can then divert your recruiting budget towards other endeavors, as staffing agencies already have access to these tools and resources.

Speed & Efficiency

The process of sourcing, screening, interviewing, and ultimately extending an offer to a prospective candidate is incredibly time-consuming. By delegating these responsibilities to a staffing expert, it will greatly minimize the expenses and time you spend engaged in the hiring process. You will enjoy a pipeline of quality pre-screened candidates for unexpected openings, so you can fill seats quicker and address your business needs as your organization grows. Plus, you will reduce overhead and minimize risk as staffing firms provide worker’s compensation, unemployment claims, and payroll taxes.

Leveraging augmented staff delivers value to business owners and managers with direct cost-savings, access to a pool of quality talent, a decrease in administrative burden, optimized existing HR team member time, and a better-engaged workforce. To learn more about how MercuryHub can help you with an augmented staffing solution, contact us today.

Benefits of Staff Augmentation Models

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