5 Benefits of Contract Staffing Income for Recruiters

There’s nothing quite like getting a large direct hire placement fee check.  But have you ever stressed out about the chance of a fall-off?  Have you lost sleep worrying whether your candidate will accept a job offer that will give you a much-needed placement fee?  If so, you know the stress that comes along with running a direct hire desk exclusively.

You have probably accepted this stress as part of the job, but it doesn’t have to be that way.  By simply adding contract staffing to your business model, you can generate consistent income to sustain you in between the inevitable direct hire dry spells.

With contract staffing, you are paid for every hour your contractors work.  Rather than receiving payment in one lump sum check like you do with direct placements, you are paid on a weekly or monthly basis over the course of the contract assignment.  Consistent contract staffing income can improve your business AND your personal life in a number of ways, including the following:

#1—Provide peace of mind.

If you don’t know when your next direct hire check is coming, it can negatively impact every facet of your life.  The worry invades the time you spend with friends and family.  No matter how many placements you made the previous month, you always start the next month back at square one.  When you have contracting in your back pocket, you have peace of mind knowing you will have the money to cover your overhead.  Since you don’t have to worry so much about when the direct hire placements are coming, you can enjoy your work and life again.

#2—Make your business more recession-proof.

Stress hits its peak for most recruiters during recessions, when direct hire placements typically take a dive.  During these times, contract staffing income can truly be your lifeline.  Contract assignments often increase during recessions because companies still need to get work done.  Your contract income can give you enough to at least cover your overhead.  You may even be able to completely make up lost direct hire placement income by taking on more contract placements.  In fact, many recruiters have told us that contract staffing income kept them from closing their doors during the last recession.

#3—REALLY take time off.

Work-life balance isn’t just for your candidates.  You have a life outside work, too . . .  or at least you would like to have one.  If you are like a lot of recruiters, you “time off” comes with a ball (your laptop) and chain (your cell phone) because you can’t afford to not be working on direct hire deals.  With contract staffing, you can leave that ball and chain behind.  You can take a day off in the middle of the week.  You could even take a REAL vacation.  Clients and candidates love contract staffing because it provides flexibility.  Contract staffing can do the same for you.

#4—Be selective about clients.

Many recruiters we work with pride themselves on maintaining a select group of clients and only working job orders that they know are good business.  How can they afford to be so picky?  Because they know they will still have money coming in from their contractors even if they don’t make direct hire placements.

#5—Create an exit strategy.

Whether you want to switch careers in five years or you’re planning to recruit until you are 80, at some point you may want to sell your firm.  The consistent income your contractors generate for your firm makes it much more attractive to buyers than a firm that only has a name and a list of direct hire clients to sell.

The best part is that creating this consistent revenue source is EASY.  If you utilize a contract staffing back-office service to handle the employment of the contractors, your process for placing contractors is essentially the same as it is for direct hires: You get the job order, you recruit the candidate, and you negotiate the rates.

There is no upfront financial investment, no additional overhead, and no ramp-up time.  When you utilize a full-service contract staffing back-office, they should handle ALL of the legal, financial, and administrative aspects of the contract placements.  You can start accepting contract staffing job orders immediately.  All you have to do is let your current clients know that you have the ability to place contractors.

You don’t have to lose sleep over your direct hire placements.  Contract staffing income can help you reap the rewards of recruiting without the stress.