An Unexpected (Positive!) Impact of the Recession

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It’s been said that when times get tough, you find out who your true friends are. They’re the ones that stick by you and do what they can to see you through. You quickly learn whom you can rely on, and who’s just in it for convenience or selfish reasons of their own.

The same can be said in business.

While business isn’t about making friends, it is about forming lasting partnerships. And if this recession has taught us anything, it’s brought to the forefront the value of relationships.

The staffing industry has faced its own unique challenges during these tough times. The tightening credit market has hit some companies especially hard. But it’s also had an unexpected (and I think also a positive) outcome.

As I speak with staffing company owners across the country, they’re consistently telling me the same thing: as they discover who their true partners are, they’re beginning to place a higher value on service and relationships.

This is especially true of their financial relationships with funding providers. A cheap daily rate isn’t necessarily the best solution anymore—especially when a price comes with hidden fees, poor (or nonexistent) service and restrictive guidelines.

Instead, we’re hearing that these five considerations are becoming increasingly important as we begin to come out of the recession:

1. Honesty about true costs.

A low daily rate may make you feel like you’ve won the lottery, but buyers beware: there are often incremental fees that can greatly inflate your true costs. Additional costs that can quickly add up include items such as clearance delays, fund transfer fees, overnight fees, credit reporting fees, UCC fees, document fees and administrative fees. Bank lines of credit come with their own unique set of fees including: line usage fees, loan fees, line of credit increase fees, lock box fees and initial application costs. A true partner is upfront about your complete funding costs. They won’t just waive a low rate in front of you, while burying additional fees in the small print of the contract.

2. Open dialogue.

“I want to feel like I’m being heard.” I hear this time and again from staffing company owners who are frustrated with the lack of open dialogue with their current funding providers. Isn’t communication at the core of any good relationship? It should be. A company that recognizes this and puts an emphasis on open, honest dialogue with their clients is one that’s focused on building a partnership, not just selling a product or service. They correct errors quickly and put measures in place to ensure they don’t happen again. They respond to you in a timely manner and speak directly to your comments or questions. Clients want to be treated like people—not like formulas, statistics or accounts.

3. Reaction time.

The recession has brought new caution and deliberation to business decisions. While being prudent can be a good thing, being just plain slow to react when your staffing company has an immediate need can be devastating. If your funding provider is reducing your line of credit when now is the time for an increase, it can mean the difference between landing a new, profitable customer, and seeing opportunities pass you by. This can impact your day to day operations as well. Do they return phone calls? Do they have the information you need when you ask for it? A true partner understands these needs and works to meet your time frame, not theirs.

4. Industry knowledge.

The staffing industry has unique characteristics that make its needs different from that of other industries. Staffing is typically one of the first industries to feel changes in the economy. So as the economy begins to pick up, staffing is already ahead of the curve. But, if you’re working with a funding provider that’s not familiar with the staffing industry, their lending guidelines are probably still stuck in the here and now—meaning it can be harder to receive the flexible funding options you need to grow.

When you work with a financial partner who is not familiar with the staffing industry, they also lack the knowledge to act as a trusted resource. Can they help you make strategic business decisions? Or do they try to place you in one of their “boxed” solutions that may or may not fit your particular needs?

5. Relationships.

Do you feel like you’re just another loan on the books, or do you have a true financial partner who acts like a partner? Do they look out for what’s best for you? Do you feel like they really “have your back”? This is what relationships are about. Sometimes this trust can take some time to develop. In other instances, the relationship “clicks” more quickly. This level of dedication is usually felt throughout the ranks of the company—from the person who answers the phone, to the team that processes your payroll. When times get tough, it’s these relationships that become important and help you get through.

The recession presented new challenges that tested not only every staffing company, but each of their business relationships, as well. Many staffing company owners discovered who their true partners are, which has created a renewed focus on service and relationships. In the end, this can only help to make the staffing industry better.

It’s the Most Wonderful Time of the Year – For Strategic Planning

By: Julie Ann Blazei, President / CEO , Tricom Funding

In Wisconsin, the snow has already started to fall, signaling the end of another year. For many of us, it’s the time of the year when we are busy wrapping up all the loose ends of the current year and looking over what still needs to be accomplished in 2011 — next year is still a distant month away. Others may already be deep in the trenches with budget planning for the New Year.

Regardless of where you’re at in the process, as 2011 comes to an end, I encourage you to take a few hours this month to review the successes and failures of the current year and do some strategic planning for the new year with a group of your staff

Not sure where to start? Has your current strategic planning process not been as impactful as you had hoped in the past?

2011 Year End Update

Take the stress out of December and preparing for Year End by using Tricom’s Year End Bulletin to stay on top of legislative changes that are important to the staffing industry.

We’ve collected all the relevant, timely and necessary information you need to ensure your staffing company is staying up-to-date with changes that directly impact your business.

Insurance For Temporary Staffing Agencies: What You Don’t Know Can Hurt You

By: Kerri Quigley, CPCU, ARM, AU

Given the nature of your business, owners and risk managers of temporary staffing agencies must address a number of unique liability exposures that frequently are not covered by standard insurance policies. While an agency retains liability for the actions of its employees, those employees are primarily supervised at off-site locations by the agency’s clients. This arrangement can create gaps in insurance coverage that are not always evident without a thorough examination of the policy by an expert in temporary staffing insurance. Often, such gaps are not noticed until an uncovered claim forces the staffing agency to pay full damages out of its own pocket. The following scenarios illustrate this point by examining two plausible situations that may not be covered by a traditional policy.

Has the Weather Ever Delayed Your Payroll Checks

It’s that time of year. The leaves are turning, the air is starting to have that hint of a chill and stores are beginning to display their holiday wares. Not far behind is winter. And along with winter comes the winter storms. Even though you may not live in a climate where blizzards are the norm, that doesn’t mean a nasty winter storm in another region can’t impact your business — especially your payroll.

Bad weather and natural disasters are an unfortunate fact of life. But they don’t have to derail your payroll schedule or keep your employees from receiving their pay in a timely manner. Paid employees are happy employees. That’s why more and more staffing companies are turning to direct deposit and paycards instead of payroll checks. One paycard company estimates that by next year, more than $550 billion of wages will be disbursed through paycards. Plus, this year over 600,000 Americans received their tax refunds via their paycard.

You can’t control the weather or any natural disaster, but you can control when your employees receive their pay with the use of direct deposit or paycards.

Is Self Funding Really In Your Best Interest?

Every once in a while as I speak with staffing company owners, I’ll meet someone who doesn’t use any source of outside payroll funding assistance.

While I respect anyone’s decision on how he or she chooses to run his or her business, I’m always curious as to why they choose this path. So I tend to ask a few questions and learn more about their business.

What I’ve found is interesting. The same types of comments keep coming up in my conversations. “It’s irresponsible.” “It’s not how I do business.” “I’ll lose control of my financial well being.”

In speaking with self-funded staffing company owners, I’ve found they tend to fall into three schools of thought.

Beyond The Numbers: Special Edition - NY Wage Theft Prevention Act

Download the PDF version here

The Wage Theft Prevention Act, effective April 9, 2011, applies to all New York employers. It modifies current new hire notification requirements that have been in effect since late 2009, imposes an annual notification requirement and modifies the information required to be included on pay stubs.

Integrity: How does your funding provider measure up?

Integrity.

It’s something you’d naturally expect from any company you work with. Unfortunately, being forthright, professional and honest isn’t always standard operating procedure these days.

When you’re dealing with something so critical to your staffing company as funding, it’s imperative that you know your dealings with that company will be professional and honest.

Flexibility in a Funding Partner

“It’s very important to have flexibility in a funding partner.”

“And if in fact it was a major chore for us to be able to flex our credit line and so on, then we would probably have to look for a different funding partner.” — Karl McCoy, President & Founder, ProTech Search

After some trying years, the staffing industry is starting to see the light at the end of the recession. Many staffing companies are experiencing opportunities for solid sales and strong growth. These are the start of some exciting times.

2011 Executive Forum

There’s still time to make your plans to head to Miami at the end of February.

The 20th Annual Staffing Industry Analysts Executive Forum is this February 28th – March 3rd at the Fontainebleau Resort in Miami Beach, Florida.

Executive Forum is a great opportunity for staffing company executives from around the country to gather and learn about strategic issues, developing trends, future opportunities and current challenges in the staffing industry.

Looking Beyond The Bank Line of Credit

Looking Beyond The Bank Line of Credit:
The Truth About Asset Based Lending For Growing Staffing Companies

Economists have declared the recession over.

Tell that to small business owners throughout the country still struggling to receive the credit they need to grow their businesses.

A recent article in Crain’s New York Business entitled “Why can’t these companies get a bank loan?” revealed that access to capital is the number one business issue for half of the private companies nationwide. They found that banks are still being extremely cautious with their credit for small businesses, approving only 20 to 30 percent of small business credit applications.

For example, at Wells Fargo, loan decisions are generally based on cash flow plus collateral. Most small businesses’ cash flow has declined, and real estate values have dropped significantly.

2010 Year End Bulletin

ARE ALL OF YOUR EMPLOYEES CURRENT WITH THEIR FORM W-4??

Employees Exempt from Withholding: An employee who certified to his employer on Form W-4, Employee’s Withholding Allowance Certificate, that he had no income tax liability for 2009 and anticipated no income tax liability for 2010 was entitled to an exemption from withholding for 2010. If the employee expects to incur income tax liability in 2010, a new Form W-4 must be given to the employer by February 15, 2011.

Change in Exemptions: If an employee loses an exemption at the beginning of the New Year for any reason, they should also file a new Form W-4 for 2011. An employee who wishes to make changes to their current withholding should also file a new Form W-4.