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The majority of companies have a consistent process when it comes to outsourcing specific parts of their operations. Whether they need marketing services, website development, construction work, or a staffing business to supply temporary workers, they publish an RFP and wait for bids to come in. When evaluating the offers, they frequently select the one that best satisfies their needs while being the least expensive.

Although it may be appropriate for hiring maintenance contractors or construction firms, is that process the best method to hire people? The top three expenses for any business, including those engaged in logistics and storage, are labor costs. As a result, it makes sense for enterprises to think about cost-cutting measures. The problem, however, is that businesses simply take into account price rather than complete cost.

Issuing an RFP, selecting a staffing agency based on cost, and then completing the hiring process has become common practice. But is it the best approach?

Will you make immediate savings only to find that your future costs are far higher?

It’s time to reevaluate how your company choose a hiring company.

In the end, the question is: Could you use less if you had better workers? The majority of companies promptly respond “yes,” suggesting that they could cut their staff by 10% or even 30% if they had more qualified applicants. The company would experience significant financial benefits from a 30% reduction in labor costs. It only requires hiring top-notch employees.

So why does that happen?

It indicates that the department of procurement and operations must collaborate. It involves the managers and those who routinely supervise these contract workers. What is missing from them? What kinds of people and aptitudes are required to carry out the task efficiently and effectively?

If operations are not included in the purchase process, the markup paid by the staffing agency must be taken into account. But if the business has a 20% overstaffing problem, that markup won’t matter much.

The Solution

The solution is to reverse the process. Instead of soliciting bids, selecting the five lowest bidders, and hoping they can deliver, alter your way of thinking. Choose the top five staffing firms you think can best serve your company’s needs, and then work with them to come to an agreement and a price that works for both of you.

Yes, it is a distinct way of thinking. But this is a long-term strategy that will cut spending overall and stop companies from overstaffing the warehouse to cut labor costs.

If you need assistance solving your staffing issues, get in touch with us!