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SBCA Magazine,

How temp agencies and placement services can bolster your hiring process.

Build the Team
Many component manufacturers (CMs) have used temporary agencies and placement services in a bid to augment their recruitment efforts. They have done this, in part, because an enormous amount of time spent interviewing, recruiting, doing background checks, and checking references can be pushed to a third-party, saving precious management labor time and company resources. This approach does differ from traditional hiring methods, so let’s explore how a few CMs have found success.

“I firmly believe in the temp agencies,” says Larry Northway, production manager with Engineered Building Design in Washington, Iowa. “There’s a lot of benefits. We save money on our worker’s comp rate. I don’t have to waste time doing a bunch of interviews. When you hire directly, right away you have overhead and there’s a bunch of paperwork. It’s really nice to have the temp agency take care of everything.”

Employee recruitment can be time-consuming for businesses. Sourcing and interviewing, and then onboarding and providing ongoing training are all critical steps. Staffing companies often offer employers temporary help during high-capacity times as well as temp-to-perm talent. They also potentially draw in a bigger pool of potential employees, creating the opportunity for a good fit when the individual may not have ever thought to pursue a position at the company otherwise.

Be Open; Be Clear
If you work with an agency, it is vitally important to clearly define what you really need. “We discuss that we’re looking for certain skills, good tape measure skilling, hammer experience, for example, or building houses in the field,” says Northway. “We have every candidate take a skills test first, and then we host a big meet-and-greet to review with the temp workers what we do and let them see all our employees in action.”

Northway says that he uses agencies to source talent from surrounding communities; he also hires directly. At a previous employer, he even worked with an employment agency that specialized in helping ex-prisoners not only find work and acquire skills, but to also reduce recidivism. “We were bringing in people that were getting useful lives again,” he says. “Rehabilitation while on probation was something we had good success with. There were good guys that worked until they were released. Can’t say I had even one experience not going well with the formerly incarcerated workers.”

The agency is also responsible for any disciplinary actions or other issues. “If you bring them in and realize they may not be a good fit, you have no obligation to keep them,” says Northway. “You call the agency, and say, ‘They aren’t working out, I’d like them to not work tomorrow.’ It gives you the opportunity to be more strategic in your hiring and really pick the cream of the crop.”

Shop Around
Shop around for a firm and interview them. Ask questions about everything from fees to the turnover rate of the staffing employees. Ideally, you want to work with staffing companies that understand your business, and check references from other firms that work with the agency you are considering. It can also be helpful to engage legal counsel to review all service agreements with third-party agencies.

You want to choose an employment agency that will serve as a trusted business partner. They need to understand your specific business requirements. “You want to find someone familiar with your industry,” says Sean Davies, plant superintendent with TrueHouse.

Davies says he really tries to make sure the staffing agency employees understand the expectations of the job prior to starting. “We ask about what they are interested in doing,” he says. “Do they understand we are in the open, so you are exposed to the weather? Heat in summer. Cold in winter. We ask about their work background experience, and listen to hear something that lines up with what we do. Ideally, for someone who has done warehouse or dealt with inventory and material handling.”

Have Flexible Onboarding
Be ready to approach training with a few different approaches. People learn in different ways and one-size-fits-all training doesn’t take this into account. This is particularly important for hard-to-fill positions.

“We do in-house training,” says Davies. “Our safety director does a full training program. When they get into the shop, safety training continues for the next week while learning the new position. The length of the training varies from person to person. Some people need additional training. Some folks that get it in the first day. Some take a week or more to understand it. If they aren’t going to get it. I say, ‘Let’s try another role,’” rather than just letting them go.”

For companies using behavioral and cognitive data, you can plan for better onboarding and training by understanding how different people learn, think, and process information. For example, if you have someone who behaviorally likes to learn through repetition and cognitively takes a longer period of time to absorb that learning, plan for training to last a couple of weeks.

Decades ago, economists and industry leaders started to sound the alarm that there would be a shortage of skilled labor in all areas in manufacturing, particularly as Boomers retire. Because there’s a “skills gap”, many companies have to take on a larger share of training new hires. That is creating a tight labor market in many areas on top of competition for talent from other similar industries.

Prior to its purchase by Builders FirstSource, California TrusFrame (CTF) used temp agencies, geofencing on social media advertising, and advertising in Spanish-language radio and newspapers to help solve this problem. They also employed a variety of assessments during pre-hire, as well as a rigorous interview process with all candidates. In their mind, just because they were temps didn’t mean they shouldn’t go through the interviewing process.

“We had our core values card and everyone who came in was given one. Mission statement, Vision, and the core values and what they mean,” said Jason Ward, former VP HR. “Everyone who was interviewed was asked, ‘What do these things mean to you and how does this apply in your life professional and personally?’”

While using temps may save on the direct costs of hiring a new worker, the business hiring the temp must pay the agency placing that worker at a job site. Those fees cover services rendered, along with taxes and other costs the agency is responsible for in terms of the employee.

CTF worked with two different temp agencies and considered it “test driving” potential future hires. “If someone was really good, it was ‘How soon can we hire them’ after how many hours they have to work in the temp capacity,” said Ward. “We’d save worker’s comp costs, but the markup is decent on the hourly rate. About anywhere from 10-40 percent over the hourly rate.” So CTF was motivated to directly hire those who were a good fit.

The agencies do safety training, but they also do site-specific safety training as well in addition to on-the-job task-specific training.
“In terms of success, it was only about a one percent rate; which was worth doing in a tight market,” said Ward. “We would do five or six interviews a week and maybe keep one. The temp agencies placements may only work a half day and then we’d never see them again because it’s not the work they expected. It’s not an easy job. It takes drive, which was one of our core values.”

If traditional hiring methods are not yielding the quantity and quality of employees you need, look into third-party temp agencies and placement services. Shop around for a good fit, clearly communicate your needs and expectations, and commit to using a flexible onboarding process. Done right, you may even find this approach works significantly better than anything you’ve tried in the past.

About the Author: Dolly Penland, President & CEO of Business Results, a PI® and CATIL Certified Partner and Talent Optimization consultancy, works with organizations to help them hire and manage their talent to their highest potential. She specializes in multiple areas including business sales growth, turnover reduction, and leadership development.