The main driver for many staffing agencies is a passion for sourcing and recruiting, yet most of them get saddled with ever increasing employment responsibilities on top of the work they already do. This represents a significant challenge for staffing agencies–smaller ones, in particular–who might feel as if they must take on the additional workload to stay competitive and deliver results for their clients.
It’s nonetheless important to understand why acting as the employer of record (EOR) for contract workers isn’t a sustainable practice for many agencies, and what those agencies can do about it.
When staffing agencies act as the EOR, their responsibilities include carrying necessary insurance policies, managing onboarding processes, and handling a bunch of back-office functions for managed service providers (MSP) and clients. For smaller agencies, this results in a significant administrative lift, as it requires adequate staffing to manage these tasks efficiently and on a regular basis.
This challenge becomes a barrier to entry for many agencies, and it hinders their ability to showcase recruiting expertise in specialized areas to their clients. Running an agency often involves enduring these challenges on an ongoing basis, and is perceived as one of the many costs of doing business in this industry.
When acting as EOR, staffing agencies often face a continued downward pressure on their rates while their costs tend to increase over time. This discrepancy between costs and rates can eventually become financially unsustainable for an agency if it continues to extend itself beyond its comfort zone.
This prompts questions over whether it is worthwhile to continue dedicating resources to stay in the good graces of strategic accounts. Additionally, the lack of integrated, end-to-end solutions for small agencies poses a significant challenge to scaling up efficiently.
With the right partner, staffing agencies can still thrive while focusing on their core interests. The HireArt Staffing Partner Network handles all EOR responsibilities, interview processes, onboarding, day-to-day HR, and compliance, leaving only sourcing and recruiting for its partner staffing agencies.
HireArt’s innovative model removes barriers to entry and offers competitive pricing by creating an ecosystem where staffing partners of all sizes access a marketplace of open jobs, identify candidates, and submit them to the jobs from a single platform. This not only enhances efficiency, but mitigates risk and creates an excellent and consistent worker experience.
For staffing agencies that would rather avoid the headache of taking on EOR-related responsibilities in favor of specializing in sourcing and recruiting, HireArt is a great option.
To learn more about how the Staffing Partner Network can empower your agency, schedule a discovery call today.
