Did you know? The value of having contractors on your books could far outweigh your permanent placement income.
Permanent placement can be a great income earner and many recruitment companies who work in that space produce profitable returns. Month after month, however, these companies have to continue to produce new sales.
The beauty of contractors is that they keep generating income over and over again on a monthly and yearly basis. They not only add value to the company as a whole, but they keep recurring income coming in.
If you provide some form of added value to the contractor such as; insurances, superannuation advice or help with maximizing their net income through salary packaging – you may be able to keep them for life. Contractors become a great referral mechanism, and one of the most cost effective ways to attract new business.
Some recruitment companies might not offer on-hire services to their clients due to cash flow and consultant’s salaries. There are several ways, however, as they say, to skin a cat
If you are a recruitment company that does not currently run contractors for cash flow reasons it may be wise to think and look at it again. There are different cash flow options available in the marketplace that allow you to look after the contractor’s salary, and add value to your clients by being able to offer the choice of permanent or contract employment. This can be achieved all while adding to your income or commission, and bottom line. You could even set up a contract model to help the client to employ someone on a permanent basis (with annual salary, leave etc.) but with contract-based employment. This enables the client to have employment flexibility within their organisation. Remember: Anything you can do to make it easier for your clients to work with you has value.
For those who are already running contractors, look at the options available to maximize your profit. This can be achieved in different ways, but in this modern world you could use an outsourcing company to assist you to totally or partially run the contractors for you – saving you the on-costs but still retaining the profit. Look at the ways to keep the contractors happy to stay on your books forever. You might not have the time or the core skills to achieve that in-house, so look to partner with companies that can add that value on your behalf.
No matter what size your organisation is, you can still offer a total service to your clients and the value-add for your contractors if you look outside the box and talk to companies who can assist you with outsourced services. This could allow you to increase the size of your offering and increase your footprint in the market.
One way to maximize the potential of running contractors, if you have not done so before, is to work around the top end of the market. Look at the contractor market space in your industry specialisation, see what commands top dollar for contractors, and focus in those areas first. Look to work with companies that add value to your proposition to both the client and the candidate. This gives you the option to be rewarded well for your effort, as it takes the same amount of work to place a lower paid contractor as it does to place a higher paid one. In fact – in some cases, the higher paid contractor is less work for the total project; yet still allows you to obtain a commission throughout at the higher rate, adding greater value to your bottom line.
Some of the skill sets that are regarded as higher values are in engineering, accounting, CFO’s, IT – SAP, Oracle, telecoms engineers, senior management, project managers, sales and marketing management, media producers, advertising, public relations, and marketing specialists.
Don’t forget global talent that could be available to work in Australia. Overseas workers are excellent candidates for long-term contract work. There are on-hire sponsors available who can assist with the TSS/482 visa or even the permanent residency offering.
Contractors can provide value in more ways than just to the bottom line. Offering a range of value added services will help you stand out from your competition and increase your footprint in your particular industry.