Management of a staffing agency needs a lot of dedication and attention to detail. Even small mistakes can have big impact on business success. Especially the time sheet workflow from the Temp’s work at the facility to payroll, invoices and collections must be exact because each hour of work paid to the Temp must also translate into one hour paid by the client. Correct credentialing of the workforce is also highly important because it impacts the agency’s reputation with its clients and can also create a legal risk. Specialist software helps to maintain a high level of accuracy in business operations.
In addition to the need for accuracy the benefits of using staffing software become apparent early on when the staffing agency begins to grow. Business automation significantly reduces the time spent on day-to-day operation, increases quality and ultimately leads to higher revenues and lower cost. Software that supports business automation can for example be a database to manage the growing candidate pool and recruiting activities, applications to simplify scheduling or an integrated workflow systems to manage time sheets all the way through from work in the facility to payment of the invoice.
There is a long list of applications that was developed for the management of various tasks of a staffing agency. While many of these are quite generic and apply to a wide range of different industries, some have been developed for very specific settings. Each of these types of software has its pros and cons that should be understood before signing up to often costly subscriptions.
There are many applications that can improve staffing agency operations. This makes it difficult to select those that match best with business requirements. These can differ widely between agencies because of defining parameters such as strategy, industry the agency is in, size of the business, types of clients and so on. It is therefore important to understand the workflows in the agency and the principals of operation first, determine how software can improve each of these workflows and then begin with the screening of vendors. For example, if an agency pays Temps every week then the payroll management system should be able to support this. Principal departments where software can significantly improve workflows are:
- Sourcing & Recruiting
- Credential management
- Time sheet processing
- Invoices & collections
- Book keeping and reporting
Types of Software
With an understanding of the business processes the next step is to determine what kind of software is most appropriate. There are three general types:
2. Generic Staffing and
3. Industry Specific.
Generic software works for a wide variety of businesses across many industries. Very good examples are Quickbooks for accounting and Microsoft Outlook for e-mail. The advantage of working with generic software is that there usually is a large support community and it is relatively affordable. At the same time, since it is not specific to the industry the staffing agency is in, it may not be the most effective solution. For example, Quickbooks supports a time sheet management system. On first glance this is great for managing scheduling and payroll, but it is also error prone because there is very limited validation of user input.
Generic Staffing software is specific to the work of staffing agencies, but not to any industry. Many Applicant Tracking Systems for example work great for almost any type of staffing agency. Accordingly, there still is a wide variety of systems that support individual aspects of the agency to choose from. However, because they are not specific to any industry (e.g. health care, truck drivers or consultants) each application typically supports only one aspect of the best staffing process. The agency then needs to create interfaces between diverse applications in order to maintain a seamless information flow throughout the organization from candidate sourcing to invoice management.
Industry Specific staffing software usually comes as an integrated software package that covers virtually all aspects of business operations. It works only for one industry (e.g. healthcare) and offers the highest level of business automation. The advantages of using such software are obvious. But there is also the disadvantage of being locked in with one vendor. All data the staffing agency generates is accumulated in one system and the longer the agency keeps using the software the more difficult it will become to switch out the vendor down the road. In addition, since Industry Specific applications come with a workflow built in they are not as good in support proprietary staffing processes that otherwise could have been a competitive advantage for the agency.
The need for staffing software often arises from a need for business optimization or preparation for growth. It is recommended to identify those areas of the organization where software will have a maximum impact on profit and then focus there first. This can reduce the risk and cost that typically comes with a significant change of business operations. Once it is clear what type of software is needed a list of vendors can be compiled from basic Internet research. There typically is not much information about the inner details of such software to be found online, which is why the next step should be to sign up for a demo with each vendor. They usually are happy to accommodate such requests because it is a very good opportunity to sell their software. Working through all the demos can be time consuming but also is a rewarding process. Not only is it possible to judge how the application will support the agency’s business processes, but there is also learning involved, which can translate into improvements of business operations beyond the software. During a demonstration it is important to ask questions and take notes of the pros and cons and also tick the boxes for the list of specific requirements the software must meet. This will be of great help when it is time to make a decision.
Only after all different vendors were reviewed a decision should be made. The time is well invested because it is certain that the best software for the business is selected, which can result in significant savings or additional revenues. Remember, that this kind of software should be used for a long period of time.
When he started his healthcare staffing agency he had the vision to be able to manage it from anywhere in the world and ideally turn it into a source of passive income one day. Christian shares his experiences and learnings about starting and growing a staffing agency through his blog.