In today’s temp agencies, there is more pressure on efficiency than ever before. The days of big margins and lifetime contracts are dwindling if you aren’t running a tight ship. Plus, clients desire to be ever more agile, easily applying external resources when and where they’re needed, treating their workforces more like a utility. But these trends shouldn’t be seen only as a threat. They also present a massive opportunity. To capitalise on this opportunity, temp agencies, whether new or old, must build their business and their workforce in a way to be as dynamic as possible. As with any business transformation, the changes needed will not necessarily be easy, nor should they be made in a vacuum. But you can do it and your business needs it.
For more than a generation, recruitment agencies, especially in the UK, have grown at a tremendous clip. Helped by generally favourable government regulation, broad macroeconomic developments, and an increased cultural acceptance, recruitment agencies across the spectrum have become core to the UK business community and that of much of western Europe. This has been especially true in the sectors within recruitment focused on permanent placements as well as those focused on long-term contracting. Those sectors have received the lion’s share of attention in the media which has left the temp side of the market to wither, with increased regulation and a variety of other factors causing margins to shrink. In addition, competition for workers and clients has increased dramatically with the explosion of worker marketplaces like Uber that are enabled by mobile and cloud technology.
But all is not lost. The move to an increasingly dynamic workforce means the opportunity continues to grow, even with increased competition and regulation. Temp agencies can and should fight for the opportunity. By adopting the same kinds of technology driving those marketplaces, and adjusting longstanding inefficient and ineffective processes, temp agencies can get back those margins and keep their staff engaged, happy, and profitable.
Poor performing agencies are riddled with dead weight. The dead weight is killing those agencies slowly. We’re talking about outdated, inefficient business processes, many of which have been developed in the face of completely ineffective technology. That’s what’s really holding back those sluggish temp agencies. We at Sirenum regularly discuss with our clients and prospects what causes the most headaches from a process perspective. Here’s a sample of their most common answers over the past couple of years:
Waiting by the phone first thing in the morning to confirm your workers’ arrival;
Using notepads to capture client or worker preferences;
Building schedules on whiteboards...or note pads;
Manually entering and checking payroll data;
Trying to identify and fix compliance violations on a post-hoc basis;
Double data entry of client and employee information.
These processes are killing efficiency in temp agencies, especially those that fall within the high-volume category of agencies. Operational efficiency is the name of the game for temp agencies so a good KPI to track is your ratio of field staff to operations team. In order to operate AND grow efficiently, agencies like ProActive work hard to improve their ratio. Many agencies are running as low as a 10:1 ratio. However, using the latest generation of workforce management technology ProActive can achieve ratios of 30:1 on a regular basis and even as high as 50:1.
Naturally, that ratio isn’t the only thing you should be thinking about. Data cleanliness, for example, is a huge efficiency lever. It impacts payroll, compliance, and client relationships. Developing a discipline around your operational technology doesn’t happen in a vacuum. The best time to revisit your data handling processes is alongside the adoption of new technology. That change management is crucial to your success. It’s particularly apparent in the compliance process. ProActive works in the transportation sector, and is very disciplined around keeping track of skills, certifications, and the credentials of temps. Adopting new technology while maintaining discipline around data accuracy mean the recruiter can give clients confidence that the right person with the right skills and licenses is
Back office work
Payroll is another great example. During the payroll process, temp agencies are buried in paperwork. While many other processes have become digitised in the last 5-10 years, payroll for temps is still reliant on capturing details on the schedule and worker time and attendance, usually by paper.
Before shifting to technology, ProActive needed to review thousands of shifts and timesheets every week if not every day. By switching to a model that allows management by exception, efficiency and productivity soared. In the new regime, instead of reviewing and approving every single shift on every single timesheet, ProActive leveraged the inherent accuracy of a mobile time and attendance solution unified with a scheduling and paysheet processes to just focus on those shifts missing data. In the new paradigm, as workers clocked in and out via mobile app, inaccuracies happened less and less often. When it did happen, they had the bandwidth to dig in and figure out what went wrong. Switching to this process not only saved time, it improved the quality of payroll data. The company estimates a saving of around 75 per cent off the previous payroll process.
To date, most technology aimed at temps has been focused on merely digitising previously manual processes. But that doesn’t take advantage of advances in cloud and mobile technology that can connect previously disparate parts of your technology infrastructure and your organisation at a fraction of the previous cost. And besides, innovative agencies need to be more concerned about transformation than mere digitisation. That starts with thinking of managing your temporary workforce as a lifecycle. From the start this process necessitates the design of a ‘no double entry’ policy – once information is input into the system, it should never need to be input again. Introducing information is a risky process, which exposes the data to errors, especially if the information is manually keyed in. It is also expensive and time-consuming. By leveraging advanced workforce management technology to remove the process silos, it is possible to eliminate double data entry entirely. For example, a request for time off due to sickness via the scheduling solution can be automatically fed into the employee record, which will monitor the number of sick days taken that year, and then will be sent to the payroll department to pay sick leave, to the operations department to alert on being short staffed and the safety department if relevant.
Technology can actually help with process discipline. Not only can technology help prevent human errors by introducing rules and checks throughout the process, but it can also refine existing management behaviour. Through their solution, ProActive was able to monitor the productivity of employees in real-time and receive warnings to alert when productivity dropped. It then decided to encourage the workforce to work from home more often, thus saving on office space. By layering analytics atop a cloud- and mobile-friendly infrastructure, actual management processes and policy could be changed.
Before reading this article, you may have thought that the most important function of a workforce management system was to automate as much of the manual processes required to manage your staff, freeing the workforce and their management to focus on higher-value tasks. For example, when scheduling shifts, managers typically pore through reams of historical data before arriving at the desired schedule. Modern scheduling solutions can perform most or all of these manual checks, saving time and brainpower. But it’s also important to realise that the best solutions still leverage existing institutional knowledge. They help drive the process change needed to make the most out of technology investment. We therefore believe the best solutions in this area should empower management to make more informed decisions but should fall short of fully automating those decisions. Combining that with change management around inefficient processes will enable your temp agency to properly evolve to meet the requirements of today’s dynamic workforce.
Some examples of advanced workforce management features to look for:
• Shift distribution automation, or Open Shifts, which allows agencies to quickly distribute available shifts to relevant workers with minimal intervention.
• Advanced shift confirmation, to enable workers to confirm their readiness and alert agencies to potential issues with shift coverage BEFORE they occur.
• Automated replacement tracking, so that operations teams can find the best resource for a shift with just a few clicks.
• Mobile apps for your temps, to communicate shift details, confirm employee commitment, capture time and attendance, and share pay information.
• Integration with recruitment, CRM, and payroll solutions, to minimise double data entry.