Welcome to The Fordyce Letter:

The Fordyce Letter

Straight Talk for the Recruiting Profession


Fees, Staffing

Are You Leaving Money On the Table When Your Temp Goes Perm?

Sales shopping global - free

Sales shopping global - freeHaving trained or consulted with hundreds of temporary staffing services and contract staffing firms around this country, I am continually amazed by the variety of approaches utilized to handle the transfer of an employee from the staffing services payroll to the payroll of the client’s organization. The term most commonly used to describe this process is “Temp-to-Hire”.

My purpose here is not to discuss whether or not you should charge your client a conversion fee for the temp-to-hire process. Rather it is to provide you with a conceptual foundation on which to make that determination. Consider the following two realities.

Industry News, Staffing

Are You Ready For the Affordable Care Act?

ACA illustration

ACA illustrationIn less than two months, businesses with 100 or more workers will be required to provide some sort of healthcare coverage for their employees.

This includes staffing companies who are employers of record. And it has potential consequences for those who use back office providers who serve as the W2 employer of record.

The rules of the Affordable Care Act can be complicated. For instance, the health plan must provide “minimum value” and it must be “affordable.” Even the rules for determining how many employees you have is not nearly as simple as counting up the number of paychecks you issue. The formula includes your FTEs, which are calculated by adding regular hours, holiday hours, paid time off, and overtime and dividing by 120.


The Cream of the Crop Is Choosing to Work Contract

Randstad contract manager graphic

Randstad contract manager graphicThere is a common misconception that contract workers are lower-level or not the “cream of the crop.” This misconception stems from the picture many people have in their minds of the clerical or blue collar temps of the past who mostly took temporary work when they couldn’t find a traditional job.

But today’s contractors can be found in nearly every industry and in positions up to and including the C-suite. Companies can truly find cream of the crop contract candidates, particularly in the technical, professional, and healthcare arenas. For many candidates, contract staffing is no longer a last resort or simply a path to direct employment, it is a chosen lifestyle.

Industry News, Staffing

With Temp Hiring Growing, Bullhorn Acquires VMS Vendor

Art Papas

VMS Access logoLarge employers with high seasonal and temp hiring needs used to be the primary users of VMS and MSP services. That began to change more than a decade ago, as companies, witnessing the explosion of contract developers and others by the tech industry, saw the strategic value of bringing on temporary workers.

Ironically, the Great Recession accelerated the process. During the first difficult years, companies laid off their contingent workers before their full-timers, discovering what the seasonal hirers already knew: A contingent workforce can be RIFed quickly without paying unemployment (unless they were the employer of record), severance, or risking the negative publicity that comes with wholesale layoffs.

Betting on the continued growth of the contingent labor market, Bullhorn today announced it acquired its VMS tech partner The Code Works, and its primary product, VMS Access. No purchase price was disclosed.

Contract Staffing, Staffing

Outsourcing: The Fastest Way to Get Your Temp Business Started

Backoffice provider services chart

Backoffice provider services chartSo you’ve decided to add contract staffing to your business model. That’s great!  By doing so, you will become a sole-source provider who is able to solve ALL of your clients of their staffing issues.

But before you start taking contract staffing job orders, you have an important decision to make: are you going to run your own back-office, which entails becoming the employer of your contractors and handling all the employment tasks, or are you going to outsource that responsibility to a contract staffing back-office?

Jeff's On Call!, Staffing

Can I Protect Myself From Being Temp-Napped?


Hi Jeff,

Thanks for providing such a great site.

I have a question regarding the validity of buyout clauses in temporary employment contracts. I own a small contingency staffing business in CA. I’m wondering whether a staffing firm can legally defend a buyout clause in their W2 offer letters or 1099 independent contractor contracts to prevent a candidate simply approaching a different supplier for the same client and engaging with them for their services in the same role?

We’ve had issues where the candidates once placed, negotiated a better deal with a competing agency, and simply switched to their employ instead. This is done with the blessing of clients who don’t seem to care that we were the ones who recruited the consultant in the first place. In general, client contracts are biased to favor the client, in that there is no restriction about receiving the same candidate from a different vendor.

If so, is there a specific form the buyout clause needs to take, i.e. specific wording that it should include, preclude?

How-To, Staffing

5 Ways to Overcome the ‘Perfect Candidate’ Syndrome


org chart for sourcingDoes it seem like your clients are dragging their feet when it comes to hiring? It’s not your imagination. According to The New York Times, it is taking companies an average of 23 business days to fill vacancies compared with just 15 days in 2009, and the duration of the interview process at major companies like Starbucks, General Mills, and Southwest Airlines has nearly doubled since 2010.

Many employers blame it on a lack of skilled labor. While that may be true in some sectors, it appears that the real problem is that many companies don’t really want to hire in this uncertain economy, so if they have to hire, they will only settle for the “perfect candidate.”


The Pros and Cons of Funding Your Staffing Payroll

Payroll image - free

Payroll image - freeOne of the biggest obstacles recruiting firms encounter when establishing contract staffing services is funding the payroll.

While the contractors expect to be paid weekly or at least every other week, it can take up to 90 days for a client to pay you for that contractor’s services. That means you may pay your contractors several times before you see even one dollar from the client. You could have several thousand dollars outstanding at any one time for just one contractor. This is compounded by the number of contract placements you have.

Fortunately, there are several options when it comes to handling the payroll funding aspect of your contract staffing business:


The Office Temps You Tell to “Break a Leg”

Addison temp Andy Planck portrays Trevor Graydon, performing  in Thoroughly Modern Millie.
Addison temp Andy Planck portrays Trevor Graydon, performing  in Thoroughly Modern Millie.

Addison temp Andy Planck portrays Trevor Graydon, performing in Thoroughly Modern Millie.

If you’re looking for office temps you can place in any environment and know they’ll fit in, who won’t quit on you the instant they get offered a full time job, and who want the flexibility you’re offering, hold a casting call.

Chicago’s Addison Group, discovered a few years ago that performers make great office workers, and today, the staffing firm has over 100 theatrical workers in its database. As much as 35% of Addison’s contract admin placements are actors, actresses, directors, writers, and others who work behind the scenes.

What they have in common, and what makes them so desirable, says Ed Kavanagh, president of Addison’s administrative division, is their ability to fit into so many different environments.

“Typically, actors are very comfortable in different roles,” Kavanagh says. Many have improv experience, which requires them to respond to situations and people with no prior planning. “Actors, actresses really do a good job reading people and they fit in very well. They are very adaptable.”

Temping also fits their lifestyle. It gives them the flexibility to make it to tryouts and casting calls, while still having a source of income. Should they land a role, they can they can cut back on their temp work.

Industry News, Staffing

Temping Grew Strongly In February As Economy Added 175K Jobs

February 2014 econ indicators

February 2014 econ indicatorsNew temp jobs helped boost February’s employment to the highest in three months, as the U.S. economy added 175,000 jobs despite the month’s nasty winter weather.

This morning employment numbers from the U.S.Department of Labor said temp agencies added 24,400 jobs during the month, more than any other single sector, surpassing even the typically strong healthcare industry, which added only 9,500 new jobs.

February’s report came in well above the 150,000 jobs that most surveys showed economists were expecting. Unemployment ticked up to 6.7% from January’s 6.6%.