3 Benefits of Contract Staffing for Recruiters

3 Benefits of Contract Staffing for Recruiters

1, 2, 3The benefits of permanent placement recruiting are well known. For skilled recruiters, the only risk is the potential of not getting paid. Yet recruiters who have been operating in the market for more than a few years recognize the limitations of focusing exclusively on permanent placement, in a world that is increasingly embracing a more flexible, employment model.

Whether you’re an independent recruiter or staffing firm, positioning yourself to serve clients’ contingent staffing needs—and especially their need for independent contractors —brings many benefits to the entrepreneurial recruiter. Here are three, unique benefits those willing to take the plunge into contract recruiting can look forward to.

 

1. A Secure, Recurring Revenue Stream


With demand for high-level professional contractors hitting an all-time high, the recruiters and firms that serve this market stand to generate a significant revenue stream. The key here is that the revenue is consistent and recurring. With a contingent workforce of even a few contract professionals—especially highly-paid, independent professionals—the annual contract revenue stream can match, or even exceed, the perm-placement stream.
 

2. More Security in Client Relationship


Business executives know that it is easier to unlock new revenue opportunities with existing customers than it is to acquire new customers. And yet, with permanent placement, a recruiter’s relationship with the client ends with each placement. By offering contract staffing, independent recruiters and firms can leverage those permanent placement relationships to generate a recurring, revenue stream.

On the other hand, if clients do not know you offer contingent staffing—or if they don’t have confidence in your ability to meet their short-term needs—then they will go elsewhere.

By investing the time to build the infrastructure for a healthy, contract-staffing division, you can block competitors from infiltrating your client base, and move ahead of other competitors that are slower to recognize the potential of contract staffing.
 

3. A Potential Exit Strategy


Ultimately, every business owner needs an exit strategy. For those recruiting-firm owners hoping to sell the business someday, a contract staffing division is one way to make that dream a reality.

Permanent-placement revenue provides a nice boost to the bottom line, but because it is not recurring, it will not be counted in a business valuation. After all, the true value of permanent placement lies in the skill of the recruiter—and if that recruiter is no longer a part of the business, the value of the business also disappears.

The recurring revenue generated by contract staffing, on the other hand, increases the company’s value and the owner’s chances of securing a healthy retirement income.

 
 
e-book CoverWith more than half of U.S. companies starting to use more part-time and contract arrangements, especially in high- skilled professions, it’s clear that the economy is becoming more gig-focused. Thinking about starting your own contract recruiting business, or just looking for more details about what the process entails? Make sure to check out our comprehensive eBook, “Contracting Decoded: Running A Successful Contract Recruiting Business,” for tips on how to run a successful placement business!