Welcome to The Fordyce Letter:

The Fordyce Letter

Straight Talk for the Recruiting Profession



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%.

Industry News, Staffing, The Business of Recruiting

Bullhorn Survey Offers Insights On Revenue, Placement Success, Comp

stay in business

Revenue by recruiter bullhorn 2013Bullhorn is out today with a survey of staffing and recruiting firms that is so full of useful and enlightening information it’s hard to know where to begin.

Here’s just a sample of what the 20 page report covers:

  • 77% of the 1,337 firms met or exceeded their revenue goals in 2013;
  • Revenue per recruiter at the smallest firms averaged $266,000; at the largest firms it was almost twice that;
  • Owners, CEOs, and partners of retained firms earned, on average, $230,000 last year. Those heading contingent firms averaged $149,000. Recruiters at retained search firms averaged $84,000. At retained firms, they averaged $84,000;
Contract Staffing, Staffing

Temp Billing Rates Predicted to Rise This Year After a Flat 2013

temp labor bill rates

temp labor bill ratesTemp labor reached new heights last year as employers ratcheted up the use of contract workers ending the year with 2.8 million temp employees, a 7.9% increase for the year.

Staffing firms added jobs at an average of 16,875 a month last year, the fastest pace since 2010, a turnaround year from the recession that began in 2007. Temp growth was slower in January, with 8,100 new jobs. However, too much shouldn’t read into the month, as January’s temp hiring is rarely useful to predict the rest of the year.

Even with the rapid growth in the use of temp labor, bill rates during the year were largely flat, according to a report from IQNavigator. The firm’s U.S. IQNdex 2013 Retrospective report said rates increased less than 1% during the year.

Fees, Jeff's On Call!, Staffing

Know These 3 Cs So You Get Your Temp Conversion Fee

Placements and the law logo

From its humble beginnings as an occasional accommodation to clients of temporary services, the temp-to-perm conversion has become a major source of revenue to the placement industry. Its popularity can be directly traced to permanent placement (“full-time”) services entering the temporary field. They don’t look at the conversion as the loss of an employee, but the gain of a placement fee. It’s a way to keep a qualified candidate “on ice” while giving the client the opportunity to “try before you buy.”

Unfortunately, three problems exist in enforcing conversion fees: Confusion, collusion and conspiracies. Understanding them will enable you to collect when the conversion occurs.


Where to Find Contracting Job Orders


One of the first questions recruiters have when they consider adding contract staffing to their business model is, “Which companies should I target?”

The first and easiest answer to this question is to target your existing client base. Gone are the days when contract staffing was limited mainly to the information technology sector (although that is still a hugely popular area for contract placements). Contractors are now utilized by nearly every industry for positions up to and including C-suite executives. Chances are at least some of your clients have utilized contractors or are considering using them.

Business Development, Staffing, Viewpoint

Five Pitches That Will Never Get You My Business (And One That Will)

Rejected stamp - free

Rejected stamp - freeAs a vice president running a growing manufacturing company, it’s not uncommon to have two or three staffing agencies stop by my office on a daily basis and perhaps one or two annoy the heck out of me by trying to slip in the back door with a cold call or lame generic email. I think our current record in one day is somewhere between six and eight.

Fortunately, I have a wonderfully patient receptionist to smile and take their information, occasionally blocking and tackling for me when I walk through the lobby and one of them is trying to throw cookies, brownies, or, worse, one of their company notepads at me.

After 22+ years in manufacturing, working with dozens of staffing agencies and hiring thousands of temps, I’ve outgrown the cookies wrapped up in a cute smile approach.

Staffing, The Business of Recruiting

Misclassifiying Workers Could Cost Your Clients — Or You — Even More

Independent contractor illustration-free

Independent contractor illustration-freeAs the Obama administration continues to crackdown on the misclassification of W-2 employees as 1099 independent contractors, the Affordable Care Act — Obamacare — is upping the ante on misclassification penalties.

Employers are often tempted to classify workers as independent contractors because they don’t have to pay the employer share of taxes or provide benefits to those workers. Obamacare’s upcoming employer mandate makes this type of arrangement even more tempting. Under the employer mandate, which goes into effect in 2015, employers with 50 or more full-time or full-time equivalent employees will have to provide healthcare insurance to at least 95% of their full-time workforce or face fines. Even if they provide coverage, they could be fined if that coverage does not meet the law’s standards.

Business Development, Staffing

Don’t Give Business to Your Competitors

Enthusiastic businessman - freedigital

Enthusiastic businessman - freedigitalIn any business, the key to rising above the competition is to differentiate yourself. Recruiting is no different. You have to show clients why your firm is the clear choice among a seemingly endless sea of recruiters.

One of the best ways to do that is to position yourself as a business partner who can solve all of your clients’ staffing needs. To do that, you must be able to offer contract staffing in addition to direct/perm hires.

This has never been more important than right now. Even though the recession has been over for almost four years, employers are still reluctant to commit to direct hires. There are a number of reasons for this, but they can be summed up with two words: Cost and Uncertainty.